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Copy of Case Study: Orchid Ecotel Hotel

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on 25 May 2013

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Transcript of Copy of Case Study: Orchid Ecotel Hotel

ORCHID ECOTEL: LEVERAGING GREEN HOTELING AS CORE COMPETENCY Richard Ivey School of Business A Case Study on by Rama Deshmukh and Atanu Adhikari Presented by: Ambuj Baidya Ashik Man Shrestha Sonali Giri Tripti Mundara MUMBAI Kamat Hotels Ltd. Starting point: Satkar, a small hotel established by Venkatesh Kamat in 1986 A.D
Well-known for quality of food served
Six new establishments + partnership with Asiatic Department Store
Established 5 business verticals in barely nine years (1986-1994)
Strategically located with reputation of serving quality food
Expansion of its wings throughout the world United States Belgium Dubai Japan Singapore United Kingdom India THE ORCHID ECOTEL HOTEL Add value by providing eco-friendly and organic food and service: Core competency
Collaboration with international firm, HVS Eco Services
Environmental programs for lower operational costs, increased revenue and evaluate environmental performance
Training workshops for its employees
"ECOTEL" certification: first in India to receive this certification
Environmentally friendly activities Major initiatives at the time of construction/ renovation The plan configuration
Natural lighting in the atrium
Roof top
QED (quite easily done)
Aerators/ flow restrictors
Cisterns and flushes Rubber wood
Medium density fibre
Triple-glazed windows
PL lamps/ fluorescent tubes
Air-conditioning "Initial high costs always pays off" -Anil Paranjpee Replacing incandescent lamp with CFL: 84,753 kWh saved per year
Replaced 55W light with 36W tube light: 4993.2 kWh saved per year
Replacing 18W lamps with 10W CFL lamps: 22608.10 kWh saved per year
Replacing 100W street lights with 23W CFL lights: 12,478.6 kWh saved per year
Using a dimmer: INR. 3,153,600 saved per year
Energy saving by using solar light: INR. 9,194.4 per year Guest participation program Newspaper on request
Eco Button
Linen reuse program
Giving away cards with seeds inside while customer's departure: 60 lakhs trees planted ecological-economic win-win situation Research by the Federation of Hotel & Restaurant Association of India: key points Electricity consumption most monitored, followed by water consumption
Solid waste production least monitored environmental issue
Staff training in environmental issues increased to 56.8 from 48.3 %
Energy expenses accounted for 8.9 % of total revenue in 2004-05 against 10.5% of total revenue in 2003-04 Introduction March 21, 1986, Kamat Hotels (India) Ltd. became publicly listed company
Kamat Plaza, the first 4-star hotel
September, 1995, Kamat Plaza upgraded and reopened as a 5-star hotel, The Orchid
3 hotels under the Orchid Brand: Mumbai, Pune, Jalandar
The branding of "ecotel" restricted to the Orchid Kamat Hotels worldwide Building core competency Paranjapee – core competency by integrating physical infrastructures and human resources
environmental initiatives taken by the green team
Best eco green employee award according to Akshay Gavai, the environmental manager of the Orchid
How economic downturn affected the hotel’s goal Marketing strategy Positioning and marketing as critical aspects
Changing the brand of the Orchid into green hotel
87% of the international travelers patronized green hotels
Made people aware of environmental initiatives Marketing strategies used It included various promotions and offers. In order to maintain long term association with the customers, it provided discount on -Food and beverages -Free accommodation -Membership referral program
Orchid gold card The University of Western Ontario THANK YOU! Business verticals of Kamat Hotels Kamat has four other running verticals
The average room revenue was soaring
Need to introduce budget rooms
Demand of budget hotel compared to the approved category of hotels Other business verticals Expand by purchasing within Maharashtra
Franchising for places outside Maharashtra
Backward integration is another alternative Alternative for expansion Every aspect have to be pre-planned for ecotel
These hotel include heritage property where certain changes are not possible
Back-end planning has to be perfect to compliment the front-end planning
Luxury should be associated with value or unique offering Strategic dilemma One of the verticals of Kamat Hotels India Limited
Ecologically sustainable hotel (ecoteling) chain--core competency
Pioneered the ecoteling in India
Set itself apart from the then competitive luxury hotel segment Introduction to the Orchid Hotel name of the company from Kamat Hotels India Ltd. to Orchid Hotels India Ltd
enable them to leverage their core competency in other verticals
the other verticals could use the competency
well-accepted concept and had an assured customer demand A decision basic infrastructure
capital expenditures
Other verticals had their own brand personality and targeted different customer segments
operational strategies for each vertical were quite different from one another Limitations SCALE versus VALUES
Shareholders –passion and commitment for eco-friendly service
Competitors - Kamat’s sustainability values might have strengthened The Orchid brand, but it had restrained the growth of the company in its other verticals. Challenge for sustainability Luxury Hotels such as Oberoi, Taj, Hyatt
Promoted luxury and consumption experience
eco-friendly nature of their service on various occasions while interacting with customers Competitors "If you promote eco-friendly service as the only competitive advantage you can boast of, you will be serving a handful of customers. There are business travellers, luxury seekers and short-term tourists who may not be readily inclined to pay extra bucks for an eco- friendly room” Uppal’s Orchid (New Delhi), Rodas (Mumbai) and Lotus Suites (Mumbai)
Prathima Vasan, spokesperson for ITC Hotel- “ Each hotel has its own program, encompassing local participation, creating awareness among employees and internal conservation through energy-saving gadgets and environment-friendly material” New entrants in the ecotel industry Divided into four segments
tourist flow of domestic and international traffic was seasonal in nature
Cyclical in nature
global economic slowdown, Sept 2008
Mumbai terrorist attacks, Nov 2008
End of summer 2009 appeared to be the bottom
Predicted an annual growth rate of the branded hotel 15 per cent HOTEL INDUSTRY-INDIA Operations Departments that need to adopt environmentally sustainable solutions The Orchid Hotel Atrium
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