BUSINESS DEVELOPMENT AND CORPORATE SALES

SUMMER INTERNSHIP PROJECT REPORT

SUBMITTED TOWARDS PARTIAL FULFILLMENT OF
POST GRADUATE DIPLOMA IN MANAGEMENT
(Approved by AICTE)

ACADEMIC SESSION
2018-20

Submitted by
Student Name: Ashish Kumar
Roll No: 18PGDM009
Batch: 2018-20

Company Guide Faculty Guide

Name: Shashank Chaturvedi Name: Prof. Boudhayan Ganguly

Designation: Corporate Sales Manager Designation: Associate Professor

Name of Company: Fabhotels IMI KOLKATA

INTERNATIONAL MANAGEMENT INSTITUTE KOLKATA

2/4C, JUDGES COURT ROAD, ALIPORE
KOLKATA 700027
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 CERTIFICATE FROM FACULTY GUIDE

This is to certify that the project work entitled “Business Development and
Corporate Sales” is a bonafide work carried out by Ashish Kumar, a candidate of
the PGDM 2018-20, IMI-Kolkata. The report is based on this work and is submitted
to IMI Kolkata on completion of Summer Internship Project in Fabhotels.

Signature

Prof. Boudhayan Ganguly

IMI KOLKATA

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 ACKNOWLEDGEMENT

The internship opportunity I had with FabHotels was a great chance for learning and professional
development. Therefore, I consider myself as a fortunate individual as I was provided with an
opportunity to be a part of it. I am also grateful for having a chance to meet so many wonderful
people and professionals who led me though this internship tenure.

I would like to take this opportunity to express my deepest gratitude and special thanks to Mr.
Shashank Chaturvedi, Corporate Sales Manager at FabHotels, who in spite of being extraordinarily
busy with his duties, took out his time to hear, guide, motivate and keep me on the right path
during the whole span of my internship in the esteemed organization.

I express my deepest thanks to Prof. Boudhayan Ganguly, Faculty at IMI Kolkata, for taking part
in useful decision making & giving necessary advices and guidance during different phases of my
summer internship program.

It is my radiant sentiment to place on record my best regards, deepest sense of gratitude to

Mr. Vikas Mathur (Senior Sales Manager) and Mr. Deepak Arora (Senior Manager) for their
careful and precious guidance which were extremely valuable for my study both theoretically and
practically.

I perceive as this opportunity as a big milestone in my career development. I will strive to use
gained skills and knowledge in the best possible way, and I will continue to work on their
improvement, in order to attain desired career objectives.

Ashish Kumar

18PGDM009

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 EXECUTIVE SUMMARY

Fabhotels (CASA2STAYS PVT. LTD.) is a 3-star budget chain of hotels, headquartered in

Gurugram, India. It was founded in 2014 by Vaibhav Agarwal and Adarsh Manpuria with an aim
to become largest budget hotel chain in India. Currently Fabhotels operates in 45+ cities with more
than 500+ properties under it. It is present in all major cities and aims to expand its operation to
15+ cities by the end of 2019. Also, Fabhotels is trying to enter the tier 2 and tier 3 cities so as to
attract more customers and increase their market share.

The very first objective was to identify the potential sectors from which the business may come
and to gain knowledge about how the hotel industry convince the corporates to onboard with them.
Another objective was to discover the parameters and drivers that are influencing the decision
making of the clients in selection of the hotels they choose for the corporate stay. It was intended
to identify a pattern of different sectors and their requirement of the similar kind of services and
to recognize the variation of drivers influencing the decision making from sector to sector.
Another objective is to find the conversion rates of different sectors by implementing AIDA and
funneling theory.

I did my internship under the Business Development & Corporate Sales Department. This
department at FabHotels is a dedicated team focused at generating revenue through stays by
corporate clients and on-boarding such accounts with FabHotels. My tasks and duties in the
company were as follows:
i. Finding out ideal corporate through cold calling on data retrieved from internet or while
mapping area.
ii. Follow up with the corporate to know their potential.
iii. Sending proposal mails as per their requirement.
iv. Fixing up meeting with the concern person in corporate. Meeting accompanied by the
aligned manager.
v. Wind up meeting with property visit or pilot booking confirmation and feedback.
vi. As per their feedback, we propose them appropriate solution and on-board the corporate.

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Methodology Used:

The methodology used to fulfill the objective of the company was qualitative technique. These
techniques are mentioned below:

We segregated the companies into their respective sectors via Quota Sampling. Afterwards, we
chose, on an average, 80 companies from each sector via Convenient Sampling which is random
in nature. After generating data, we did in-depth interviews using Laddering Technique with the
admins of the corporate offices in order to understand their requirement via meeting or via cold
call. Later, a proposal mail is sent via e-mail that contain all the details including the corporate
presentation and PAN India FabHotels List. And lastly it was very important to continuously
follow up the account so that the company builds a relationship with the admin or the concerned
person of the organization and it becomes relatively easier to generate business from them. The
results obtained from such qualitative technique can serve as an input for quantitative analysis on
a large scale which will help to gain a better understanding of the results acquired.

Findings & Conclusion:

One of the fastest increasing industries is the hospitality industry. Many players enter this sector
as it is one of the most appealing and seemingly increasing sectors. In 2014, Fabhotels joined this
sector and began operating using a model of franchise. The strategy it used was distinct and it went
into this sector with the objective of becoming the sector leader in hotels in the budget category.

I acquired understanding during my internship at Fabhotels about how the business is persuading
the companies to join them and what proposals they are offering to their customers. While
attempting to embark on various Fabhotels corporations. I also learned about the various main
drivers influencing the company's choice to book hotels and learned that these drivers differ across
sectors.

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The budget hotel market in the Delhi-NCR region was saturated, so it was very difficult to board
corporations as corporate offices are not prepared to embark for several reasons. The reason may
be that they are either already on board with some other hotels or they don't have to associate with
Fabhotels or they don't have a budget hotel necessity.

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 TABLE OF CONTENT

S. No. Contents Page No.

1 Introduction 9-10
1.1 Background of the problem task undertaken
1.2 Objective

1.3 Scope of the project

1.4 Salient Contributions of the project

2 Industry / Company overview 11-25
2.1 Industry Profile
2.2 Industry Characteristics
2.3 Trends in Hospitality Industry
2.4 Porter's five forces model on hotel industry
2.5 Company's profile- fabHotels

3 Review of Literature/ Theoretical Background 26-29

4 Research Methodology 30-31
4.1 Qualitative Analysis
4.2 Techniques and methods used

5 Data Analysis and Findings 32-44

5.1 Data Classification
5.2 Getting Started
5.3 Key Drivers
5.4 Variation of key drivers across industries
5.5 Conversion Rates
5.6 Interpretation of findings

6 Conclusions 45
7 Limitations of the project 46
8 Recommendations 47

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 LIST OF TABLES

TABLES

Table 1 Total Funding of Fabhotels

Table 2 Competitors of Fabhotels

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 LIST OF FIGURES

FIGURES

Fig 1 Hotel occupancy rate for last 5 years

Fig 2 Porter's five force ls model on hotel industry
Fig 3 Advertisement snap of FabHotels
Fig 4 Operating tree of FabHotels
Fig 5 Sample DSR
Fig 6 Entry through color coding
Fig 7 Entry through color coding
Fig 8 Classification of sectors via Quota sampling
Fig 9 Sector-wise maintained DSR - FMCG and Agriculture
Fig 10 Sector-wise maintained DSR - Pharmaceuticals

Fig 11 Sector-wise maintained DSR - IT

Fig 12 Proposal Mail

Fig 13 Analysis of lead generation through drivers
Fig 14 Dominating Driver in Pharmaceuticals

Fig 15 Dominating Driver in IT

Fig 16 Dominating Driver in Capital Goods and Machines

Fig 17 Dominating Driver in Media and Advertising

Fig 18 Dominating Driver in Government Ministries and Organizations

Fig 19 Dominating Driver in FMCG and Agriculture

Fig 20 Funneling and AIDA
Fig 21 1st stage conversion
Fig 22 2nd stage conversion
Fig 23 3rd stage conversion
Fig 24 NET CONVERSION

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1. INTRODUCTION

1.1Background of the problem task undertaken:

Fabhotels started its operation in 2014, just a year later after Oyo who started its operation in
2013. Within such a small span of time Oyo captured a huge market share and expanded
extensively and today it is present in almost all cities, even in tier2 and tier 3 cities. Treebo
being another big competitor for Fabhotels is still expanding and therefore it is very important
for Fabhotels to establish itself and surpass Oyo and Treebo by expanding its operation.
Unless its competitors, Fabhotels operate on a franchise model and its main target customer
are the corporates. The primary issue that exists was that the corporate conversion rate is much
lower. In order to increase the conversion rate, I was provided the job of talking to as many
businesses as possible, briefing them on the business and trying to embark on them and create
revenues. This also required an understanding of several factors influencing corporate hotel
reservations decision. Besides these, a very significant job was to track fresh and old accounts
in order to get company from them.

1.2 Objective:

The very first objective was to identify the potential sectors from which the business may
come and to gain knowledge about how the hotel industry convince the corporates to onboard
with them. Another objective was to discover the parameters and drivers that are influencing
the decision making of the clients in selection of the hotels they choose for the corporate stay.
It was intended to identify a pattern of different sectors and their requirement of the similar
kind of services and to recognize the variation of drivers influencing the decision making from
sector to sector.

1.3 Scope of the project:

o This project report is based on the summer internship that I had done for two months I.e,
April-May 2019 at Fabhotels.

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 o The internship location that I was offered was Gurugram where the company has its
headquarter.
o The profile which I was offered was Business Development and Corporate Sales where I
was expected to generate corporate leads, on board them and generate sales from them.
o For achieving the same, I had done cold calls and cold visits to the corporates, fixed
meeting with them and then tried to convince them to on board with Fabhotels.

1.4 Salient Contributions of the project

The job was to take the clients onboard with Fabhotels by coming into a corporate tie-up
wherein the bookings will be done by the single point of contact (POC) assigned to the
company by Fabhotels. My job was to find the potential clients and generate leads for my
manager. I attended meetings with my manager accompanying me for the conversion of the
leads. Cold calling on the other hand generated leads, but more importantly, it played the vital
role in spreading the awareness about the company as many Corporates did not know about
Fabhotels. I also designed a pitch which was flexible enough to be molded according to the
client I was talking to. During the tenure of my internship, I generated number of leads and
onboarded clients, some of the major corporates are as follows:

1- Liugong India Pvt. Ltd.

2- Saregama India Ltd.
3- Compunnel Technology India Pvt Ltd
4- COWI India Pvt Ltd
5- All India Glass Manufactures Federation
6- Sterling agro industries limited (Nova)
7- Bindal Paper Mills Ltd
8- TPS Infrastructure Ltd.
9- AOV International
10- Bharat Bricks Co.
11- Himalaya Corporation Limited
12- Il & FS Skills Development Corporation Limited

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2. INDUSTRY/COMPANY OVERVIEW

2.1 Industry Profile – Hospitality & Tourism Industry

The Indian hospitality industry has emerged as one of India's main service sector. It has developed
into an industry sensitive to people's requirements and wishes. The hospitality industry's fortunes
have always been related to the tourism industry's opportunities, and tourism is the industry's
primary demand driver. The Indian hospitality industry has recorded healthy growth fueled by
robust inflow of foreign tourists as well as increased tourist movement within the country and it
has become one of the leading players in the global industry.

2.2 Industry characteristics

Major characteristics of the Indian hospitality industry are:

1. High seasonality: The Indian hotel industry normally experiences high demand during
October – April, followed which the monsoon months entail low demand. Usually the
December and March quarters bring in 60% of the year’s turnover for India’s hoteliers.
However, this trend is seeing a change over the recent few years. Hotels have introduced
various offerings to improve performance (occupancy) during the lean months. These
include targeting the conferencing segment and offering lucrative packages during the
lean period.

2. Labour intensive: Quality of manpower is important in the hospitality industry. The

industry provides employment to skilled, semi-skilled, and unskilled labour directly and
indirectly. Hotel owners in India tend to “over - spec” their hotels, leading to higher
manpower requirement. With the entry of branded International hotels in the Indian

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 industry across different categories, Indian hotel companies need to become more
manpower efficient and reconsider their staffing requirements.

2.3 Trends in Hospitality Industry

Not only the culture and landmarks attract individuals to the Indian hotel sector and
possibilities for tourism. This sector encourages everyone to experience the country's natural
wonders with an impressive level of customer service, regardless of their socioeconomic status.
It is an essential component of the economy of the country, with growing popularity of home-
stay and rural tourism possibilities.

According to the market reports Indian hotel industry was able to overthrow the 65%
occupancy rates threshold last year (2017). The yearly report titled ‘Hotels in India Trends &
Opportunities’ by the global hospitality consulting firm HVS suggests that branded hotels in
India touched the occupancy rate of 65.6 per cent in financial year 2017, as against 63.3 per
cent in the previous year.

Fig. 1

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2019 will observe an increase in travellers that combine business and leisure travel into one trip.
According to reports 55% of millennials extend business trips for extra leisure time. Driven by the
blurring lines between work and leisure along with the need to have a comprehensive travel
experience, corporate and leisure travel is expected to see an uptake. It is compelling to match up
to the needs of today’s business traveller whose constantly on-the-go lifestyle requires simple,
mobile, local and inclusive experiences.

2.4 Porter’s 5 forces model on Hotel Industry

Fig. 2

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Competition in the Industry: The competition in the hotel sector is intense because the cost of
differentiating item and the cost of switching is small. And the company development needed is
higher than the growth rate of the company. In an sector like this where there are high capital
expenses, there is a strong pressure to sell the ability by cutting prices (except on weekends and
holidays) and there is an intense competition.

Potential of New Entrants into the Industry: Globally, the hotel sector is defined by elevated
capital expenses, i.e. the complete cost of projecting a commercially operable status. The hotel
must ensure that the elevated price of capital in the form of production is gaining its value and that
the resources are being used to maximize its capacity. The current as far away is concerned with
the picture of the brand and customer loyalty.
The fresh entrants must be aware of the target market and the service of quality. As the hotels are
running on product differentiation, the entrants must invest in the development of the customers '
services. Tariffs are based on place, management and guest ratios differentiation. The fresh
entrants will be at a disadvantage because in the metropolitan towns the best places are restricted

Power of Suppliers: Suppliers have comparatively low authority over the hotel sector. The hotel
sector is only subjected to the strength of the workforce, qualified employees and employees, and
they are in great demand from the sector. Hotels are not subject to suppliers ' negotiating power
and their competitiveness is under direct and indirect pressure. A hotel must retain a price benefit
over its competitors in order to be in the leading league and be innovative in differentiating itself
into its own strategic group.

Power of Buyers: If the buyers ' concentration is greater than the players on the market then the
sector is subject to buyers ' high authority. This is the case in the hotel sector. When buying hotel
rooms in bulk is needed, certain groups of consumers exercise authority over the hotel sector.
These organizations include tour operators, airlines at home and abroad, and standard organizers
and participants.

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Where business travellers are concerned the differentiation becomes significant and the hotels are
under pressure to keep their brand unique. On the other hand, when leisure travellers and tourists
are taken into consideration, the hotels have to compete in prices.

Threat of Substitute Products: The threat of the substitutes in hotel industry is relatively low.
Except in the times of recession the hotel industry can thrive without the threat. However, people
looking for cheap accommodation can easily opt to live in hostels, motels or with relatives. This
market is price sensitive and the hotel’s target audience becomes the cost-conscious people.
However, in case of accommodating large group of people like travelling groups and business
travellers. The hotel doesn’t face a threat of substitute however it faces competition of
differentiation.

The two things the hotel industry thrives on is the ability to differentiate themselves and quality
of service. The quality of service is dependent on the trained staff and personnel as well as good
management. The hotel industry can expand their business by selling their products like foods
and beverages, by organizing entertainment shows and exhibitions and conventional events.
In case of the economic recession, the hotel industry should be more durable than the tourist
market because of the fluctuation in the tourist industry. However, considering the less threat of
substitutes and low power of suppliers over the industry, the hotel industry has very few
hindrances in successful market growth.

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2.5 Company Profile – FabHotels

FabHotels is a network of 3-star budget hotels in India, having its headquarters in Gurugram. It
currently operates in more than 50+ cities of India with 450+ Hotels, including major cities
like Mumbai, New Delhi, Chennai, Bangalore, Hyderabad, and Coimbatore.

FabHotels was founded in 2014 by Vaibhav Aggarwal, an alumnus of IIT Guwahati and Wharton
School of the University of Pennsylvania and Adarsh Manpuria, also alumnus of Wharton School
of the University of Pennsylvania.

Fab Hotels work on a 100% exclusive franchisee model with long-term contracts. FabHotels have
more than 100 locations in the top 15 Indian cities varying from New Delhi to Bangalore to
Chennai. They handle more than 2,500 rooms and are able to generate 85 percent occupancy per
month. Fab Hotels are observing strong incoming interest from hoteliers across India. This budget
initially hotels operate at 50-55 percent capacity. They are increasing capacity and also provide
operational support that is the reason Fab Hotels are highly valued by their franchisee partners.
India is a unique hospitality market. It's a multi-billion-dollar segment but it's majorly unorganized.
More than 85 percent of the room availability is within the budget segment but there isn't much of
a brand essence.

Fig. 3
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Fab Hotels are doing differently is solving problems on the hotel operations side. They are
basically building customized technology for managing real-time inventory, room-pricing and
guest experience. Fab Hotels are not using off-the-shelf hotel technology which is best suited and
apt for larger hotels with more than a hundred rooms.

2.6 Funding

In 2016, FabHotels raised a funding of $8 million from Accel Partners, RB Investments, Mohandas
Pai’s Aarin Capital and Qualcomm Ventures.

In 2017, FabHotels received a funding of $25 million in a Series B funding from Goldman Sachs.
Accel Partners also participated in this round.

Table 01

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Budget hotel chain FabHotels raised about $7.8 million (Rs 54.34 crore) from its existing investors
in its Series B1 round that was led by Goldman Sachs and participated by Accel partners and
Qualcomm.

FabHotels issued a total of 2,23,462 Series B1 CCPS (cumulative convertible preference shares)
having a face value of Rs 10, but issued at a premium of Rs 2,422.10 each.

2.7 Key Functions

• Network Expansion
- Shape the footprint for the growth of our brand
- Identify, attract & onboard best quality hotels across India.

 Technology
- Uses data and technology to drive growth & margins.
- Being a tech driven company, it believes in the optimum utilization of tech resources
for advanced and precise output.

 Revenue & Pricing

- Take ownership of region-wise P&L
- Empower management with impactful & effective analysis

• Business Development
- Geographical Mapping and Competitive Mapping for generation of Business Leads
- Building Channels of Sales for deriving the leads.

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2.8 How does FabHotels operates?

LEASING
MODEL

SUPPLY DEMAND
TEAM TEAM

SOURCING QUALITY CORPORATE TRAVEL KEY

OF HOTELS MAINTENANCE SALES AGENT ACCOUNTS

Fig. 4

2.9 SWOT Analysis

STRENGTHS:

I. Exceptional hospitality services, delivering unforgettable experience.

II. All properties are located in the prime locations, i.e., near Airport, Central market etc.
III. SPOC- Single Point of Contact
IV. Standardization & reliability
V. The founders of FabHotels, Vaibhav Aggarwal and Adarsh Manpuria, are a youngster
who have won a lot of accolades and besides entrepreneurship, caters to a wide range of
interests also employs a majority of young professionals. This is reflective of every
strategy that FabHotels adopts since there is a freshness to the approach taken which is
one strong reason for its instant success.

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WEAKNESS:

I. Being a start-up company, it is still in development process.

II. Hotels that are on a tie-up with FabHotels, can also loop in other agents for which
FabHotels cannot do anything much to circumvent. In this context, the model thrives
solely on how well the margins they provide for their hotels are which can be risky in the
long run.

OPPORTUNITIES:

I. Earlier the trend was more biased towards luxury and boutique hotels but not anymore.
People are trying to minimize spending and focus on saving and thus budget hotels that
can provide decent boarding and lodging facilities are on a high demand today.
II. The number of people who travel on business from both genders has grown profusely in
emerging economies. This has resulted in a demand for budget stays.

THREATS:

I. New entrants are always the threat to any kind of business or industry as it can acquire
your share of market by its effective functioning.
II. Another threat to the hotel is the threat from its competitors prevailing in the market as
there are various other budget which functions at their best. (e.g.- Oyo, Treebo)
III. Another threat which is prevailing in the market is the various government policies which
are very dynamic in nature and can be changed in any period of time.
IV. Today there is negative imagery of unsafe stays and the number of cases of harassment is
on an increase.

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2.10 Competitors

Table 2

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2.11 On the Job Training & Activities Performed

First week of the internship was dedicated to induction and training.

Training was a continuous procedure throughout the internship.

Objective of training:
The main purpose of this project was to seek about company's profile and market
information, interested organizations, approached investors and in order to build upon sales
and marketing skills necessary for the functioning of hospitality industry.
• Learn how the hospitality industry utilizes sales and marketing skills.
• How to pitch deals
• How to send proposals
• How to bring business to the company

Activities Performed:

1. Induction: Documentation and brief about company and its code of conduct.
2. Training: Followed by the company’s working module by the Head HR.

Later we were given training about the work by our second line Manager
Mr. Deepak Arora. It included the details about the complete sales process and activities
as given below:

o Mapping
o Calling
o Sending proposal mail
o Fixing appointment
o Closing Deal

3. Data: I had to generate data on my own of potential companies through internet or by

mapping areas. I was also provided some potential data from the company.

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4. Calling: On the provided data, I used to make calls to pitch them our services followed by
sending proposal mails to the interested companies and follow up to fix up meetings.
5. Mapping: In this activity I was supposed to cover a particular area and collect the contact
details from all the organizations of that area in order to make proposal calls. After
collecting data, I was expected to fix up a meeting with those organizations.
6. Proposal Mail: I had to design and send out proposal mails to the interested clients
according to the company’s specifications and requirements.
7. Meeting: I had to set up and accompany my aligned manager in meetings with the clients
to pitch them our services and to know more about their requirement and how they manage
the bookings. The objective is to convince the client and close the meeting by sharing the
quotation in their area of requirement.
8. Follow – ups: After a successful meeting, I had to follow-up with the client to close their
query and on-board the client with FabHotels.
9. Manage/Amend Bookings: On receiving the query from the corporate, I filter out hotel
properties according to the client’s requirement based on several factors such as – location,
budget, occupancy etc. and suggest the shortlisted properties to the clients. On confirmation
and receiving the guest details I initiate the booking and share the confirmation vouchers
with the client over the mail.
10. Feedback: After a stay is completed, I was supposed to take feedback from my on-boarded
clients.

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2.12 Sample DSR

We have to maintain a DSR (Daily Sales Report) on Google Sheets which was also shared with
my mentor and seniors for supervision.

Fig. 5

2.13 Data Generated

During the course of my summer internship program, I generated a data of potential corporates
through calling and mapping areas as shown in the figure.

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Color Coding:

Green: It denotes the clients who were interested and got converted or will be converted in
future.
Red: It denotes the clients who were not interested or does not have requirement.
Yellow: It denotes other clients that require follow-up to get more information.

Fig. 6 Fig. 7

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3. Literature Review

ANALYZING CUSTOMERS' PREFERENCES IN SELECTING HOTEL SEGMENT:

AN EMPIRICAL CASE STUDY.
Bikrant Kesari, Pryas Jain- August, 2013

The continual transition has made the hotel sector in India more functional and practical and has
achieved a worldwide level of recognition. Over the past decade, the standards of equipment and
services provided have developed towards widespread use of technology, environmentally friendly
services, pricing, market segmentation, regional preferences, etc. The Indian hotel sector has seen
important development in the inventory of rooms across categories from upscale luxury to
restricted facilities, boutique hotels and budget hotels. In both the business and recreation
segments, occupancy and room prices have seen ongoing gains from both national and
international travelers. This paper explores hotel sector segmentation to provide better client
service in distinct classes. This research empirically examines the customer's most significant
factor in selecting hotels for convenience accommodation. Sample of 39 visitors coming to Bhopal
City for distinct purposes were randomly chosen for the research, as well as focusing on significant
dimensions that attract customers in selecting the best and suitable section of hotels. The research
concludes that customers make internet website selection on the hotels, suggestion of taxi driver
and recommendation of some previous customers also affecting the hotel segment selection.

EVALUATION OF BESTPRICE CLAUSES IN HOTEL BOOKINGS

Matthias Hunold, Reinhold Kesler, Ulrich Laitenberger, Frank Schlütter- November,2018

We use meta-search price information from nearly 30,000 hotels in distinct nations to evaluate
the best cost price clauses (BPCs) of online travel agents (OTAs). We discover that BPCs affect
hotel room pricing and accessibility across internet channels of sales. In specific, when the OTA
does not use the tight BPC, hotels publish their deals more frequently on Booking.com, and also
tend to actively encourage the immediate internet channel. In addition, the abolition of the tight

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BPC of Booking.com is connected more frequently with the direct channel of chain hotels with
the strictly smallest cost.

CO-CREATING VALUE WITH CUSTOMERS- A STUDY OF MOBILE HOTEL

BOOKINGS
International Journal of Contemporary Hospitality Management, 2018, Vol. 30- Issue 4

Purpose This research seeks to create a structure to explain the reciprocity of the value co-creation
process in the context of mobile hotel booking and to clarify client and provider values. Design /
methodology / approach A study framework was created to derive insights into the value co-
creation system based on the prior literature. Mobile hotel bookers in China performed online
surveys. The suggested framework was tested using confirmatory factor assessment and structural
equation modeling. Findings The results proposed that providers should enhance client values
(functionality, usability and perceived value) in order to attain results- Customer Lifetime Value
(CLV), Customer Knowledge Value (CKV), Customer Reference Value (CRV) and Customer
Influencer Value (CIV)] for themselves. The CIV moderated the relationship between satisfaction
and CLV from other clients. Practical implications Providers should increase client value from
functionality, usability and perceived value elements in order to gain a competitive advantage. In
addition to economic value for development, non-transactional values such as other CIV play an
increasingly critical role for providers. Originality / value This study not only added empirical
value co-creation analysis in m-Tourism but also expanded the current literature by validating a
research model that integrates website evaluation research with the value structure of customer
engagement. Mobile app was seen as one of the indispensable actors engaged in value co-creation
instead of serving as a mediator.

ANALYZING CONVERSION RATES IN ONLINE HOTEL BOOKINGS

International Journal of Contemporary Hospitality Management, 2016, Vol. 28- Issue 2

The purpose of this article is to examine the effect of three major techniques on turning browsers
into clients: effect of review rating (location rating and service rating), recommendations, and

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listings of searches. Design / methodology / approach–This article uses a quasi-likelihood
technique with the Bernoulli log-likelihood function and the beta-based parametric regression
model to estimate conversion rate model parameters.

The findings indicate that a high rank in search listings, a large amount of suggestions and location
ratings have a important and positive effect on conversion rates. Service rating and star rating,
however, do not affect the conversion rate significantly. In addition, the conversion rate is
negatively correlated with room cost and hotel size. It was also discovered that a high search listing
rank, a large amount of suggestions and location ranking are increasing online hotel reservations.
In addition, a large amount of suggestions has been discovered to boost the conversion rate of low-
ranking hotels.

The results indicate that location ratings of hotels are more essential for the transformation of
tourists into clients than both star ratings and service ratings. Higher prices can therefore be
charged for hotels situated in convenient places. The results may also help entrepreneurs who are
planning to open new hotels to forecast the conversion rates and demand for specific locations. A
large amount of suggestions has been discovered to assist boost the conversion rate of low-ranked
hotels. This result suggests that a high number of recommendations mitigate the adverse effect of
a low rank in search listings on the conversion rate. This article adds to understanding the drivers
of internet channels conversion rates for effective hotel marketing execution.

DO DOMESTIC AND INTERNATIONAL CUSTOMERS BEHAVE ALIKE IN ONLINE

HOTEL BOOKING?
Journal of Electronic Commerce Research, 2014, Vol. 15 -Issue 3

The purpose of this study is to investigate national and global customer behaviors of internet hotel
booking. We examine the effect on the percentage of internet national reservations of the review
rating (place rating and service rating), review volume and hotel features. We assess a range of
models using information from London and Paris hotels to explain fractional dependent variables.
Our findings indicate that cost, quantity of review and place rating have a substantial and negative

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effect while service and star rating have a substantial and positive effect on the percentage of
national reservations. However, if the hotel belongs to a chain group, the percentage of global
bookings will not improve. In addition, national clients are more vulnerable to price and service
rating modifications, while global clients are more responsive to place rating changes. The findings
indicate that behaviors of internet hotel booking by national and foreign clients demonstrate
important distinctions.

HOW WORD-OF-MOUTH MODERATES ROOM PRICE AND HOTEL STARS FOR

ONLINE HOTEL BOOKING AN EMPIRICAL INVESTIGATION WITH EXPEDIA
DATA.
Journal of Electronic Commerce Research, 2015, Vol. 16 -Issue 1

Product information has an impact on consumer purchase choices. Online review can improve
consumer communication by raising understanding and decreasing uncertainty while influencing
consumer perception. However, little is known about how Word-of-Mouth (WOM) and data
indications communicate, particularly about experienced goods such as hotel rooms. We evaluate
information gathered from Expeida.com to bridge this gap and use real reservation figures to
evaluate sales efficiency rather than proxy methods used by prior research. This study explores
WOM's adverse impact on the results of internet hotel sales on data signals, namely room price
and hotel star rating. In addition, we confirm that, respectively, room price and hotel star rating
may have adverse and beneficial effects on hotel reservations online. If hotels receive favorable
WOM, they are less likely to be affected by room cost and star rating for their internet sales
performance. However, their internet sales performance is more probable to be affected by room
cost and star rating for hotels that receive adverse WOM. These results will assist scientists and
industry professionals in the context of electronic commerce to better comprehend the effect of
internet WOM.

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4. RESEARCH METHODOLOGY

4.1 The idea was to collect data so the qualitative analysis can be done. To find the trends in
different sectors and to co-relate data with our basic understanding, we used various qualitative
techniques and different types of sampling techniques.
To create the methodology, the activities that were undertaken are as follows:

o Calling companies to inform them about the business and their budget category hotel
requirements

o Mapping or making cold visit to a particular area where there are many corporate offices
and collect the contact details of the admin/concerned person from all these corporate
offices in order to make proposal calls

o Sending proposals via mail to the admins of the organization that have the requirements.

o Setting up meetings with the concerned person of the organization that have good
requirements of budget category hotels

o Once meeting is set, a Calendar Request is sent to the admin mentioning the date, place
and time when the meeting is supposed to take place

o After the meeting is done, a Minutes of Meeting was sent to the admin

o Following up with current accounts for getting business

o Following up with accounts that got closed due to some escalations and trying getting
them back onboard.
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4.2 The techniques that were used for the selection of the corporates to be called was not pre-
decided. Firstly, the segregation of the companies was done according to the sectors they belong
to and then, on an average, the first 80 companies were called. The questions that were asked about
their requirements were also probing in nature but not leading.
The whole process was done by using the techniques that can be summarized as follows:

o Quota Sampling: A sampling method of gathering representative data from a group. As

opposed to random sampling, quota sampling requires that representative individuals are
chosen out of a specific subgroup.
In our case, the sectors were segregated on the basis of Quota Sampling, where the sectors
are the specific sub-groups.

o Convenience Sampling: A convenience sample is a type of non-probability sampling

method where the sample is taken from a group which is easy to reach or close to hands.
This technique relies on data collection from population members who are conveniently
available to participate.
In our case, the companies under each sector are selected on the basis of Convenience
Sampling, which is a type of Random Sampling only.

o In-depth Interviews: It is a qualitative research technique where, intensive individual

conversations are conducted. It is very helpful to explore the possibilities of a certain
activity to happen which is backed up by the data provided by the real-time customers. In
these interviews, we use Laddering Technique for the questionnaire.
 Laddering Technique: It is a technique to find out what people value. A ladder
allows us to reach at a point which is otherwise unreachable, in a similar way,
laddering as applied to structured questioning is a technique designed to acquire
nuggets of information which are otherwise very difficult to get at. It involves
probing but not leading.
In our case, we talked to the admin department officials of various companies and
asked open ended questions, collecting their answers and generated a data for a
qualitative analysis.
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 5. DATA ANALYSIS AND FINDINGS

5.1 Data Classification: We generated a list of the potential sectors for the business. After
exploring various possibilities, we came up with a finalized list of sectors to be aimed. We used
Quota Sampling for the same. After that, we created a list of, on an average, 80 to 100 companies,
under every sector we aimed. For this, we used Convenience Sampling. All the data of the
companies was classified in accordance with the sectors and companies were chosen which were
close by hand. The data contains the companies of the whole NCR region.

Cluster of sectors

IT Agriculture Automobiles Pharmaceuticals Media

First 100 First 100 First 100 First 100

First 100 Corporates
Corporates Corporates Corporates
Corporates

Fig. 8

Fig. 9

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Fig. 10

Fig. 11

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5.2 Getting Started: The very first lesson of how to create a good start included a creative and
flexible sales pitch which was used during cold-calling as well as visiting a corporate. We also
designed a mail that included a greeting as well a short intro of the company which we used to
email while sending the company proposal. Getting a good start matters the most when you have
to convince someone or to simply sell.

Cold calling is considered a type of marketing which is of “Push” in nature, and thus to compensate
the push, we thought of making our pitch to be as creative and interesting as possible. And it took
almost 2 days to come up with a pitch which was flexible and interesting, short and crisp at the
same time. We also noticed the prospect getting uncomfortable with the English language. To
solve this problem, we need to focus and realize the type of prospect we are handling, and it all
can be sensed right at the point when we greeted each other on the phone, and if needed, we used
to switch our language to Hindi for the comfort of our prospect.

Fig. 12

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5.3 Key Drivers: After the classification, we started cold-calling on the collected data. Some
prospects directly denied for any conversation saying that services are not required, some asked to
send the proposal mail so that if there may be any requirement in the future, they might contact us.
But the prospects who were interested in a conversation were probed using Laddering technique
and certain parameters and drivers were discovered during the conversation that influenced the
decision making of the hotel bookings for the corporates. Some of the crucial drivers are as
follows:
o Location: Location preferences were made by the clients such as the property should be
near the Airport or Railway Station, in vicinity to the work area or simply at a posh location.
o Price: Big companies did not have a budget problem while small organizations and start-
ups seeks budget friendly properties. It can be a major influencing factor in the decision
making.
o Comfort: This driver comes into picture when CXOs of the company, or any delegate of
the company travels. They seek comfort and exceptional facilities.
o Space: Clients travelling for leisure purposes seek space and comfort. They also seek for
extra facilities such as gymnasium, swimming pool, in-house restaurant & bar etc.
o BTC- Bill to Company: Credit period is given to the company and the client do not have
to pay anything at the time of the check-out. This facility was also acted as a driver for a
company to opt a particular company’s services.

During the internship period, we collected a data of 100 respondents from our DSR (Daily Sales
Report) who were asked to tell their driver on top priority for the hotel room bookings, and the
result was surprising. The result was scattered in nature and one really cannot decide which driver
is more important over the others. But, most of the suspects pressed upon location and pricing.

Given below is the distribution on pie chart of the companies that required room nights in
accordance with one of the key drivers and we can see that Location topped the list with 35 percent
followed by Price with 32 percent.

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 ANALYSIS OF LEAD GENERATION THROUGH
DRIVERS
BTC, 6

Space, 15
Location, 35

Comfort, 12

Price, 32

Fig. 13

5.4 Variation of Key Drivers across industries: Another finding is how the drivers varies
across the industries. From the collected data, if we put it in a comparison, we will find that there
is a difference in the weightage of the key drivers influencing the decision making. There might
be many reasons for this fluctuation because the requirements of different industries are different.
For instance, an employee in IT sector will prefer comfort and location while a salesman or a after
sales serviceman will choose location and price as his or her top priority.

In a regular fashion, we collected the data of the prospects and the suspects, which key driver is
influencing them for the hotel bookings and we kept on storing them for a good qualitative
analysis. The intention was to compare the trends across the industries and to analyze which key
driver is the strongest in this industry. We can go on and explore the relationship of these key
drivers with each other for future prospects.

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 FIG. 14 FIG. 15
PHARMACEUTICALS IT
BTC, 20% Location, Location,
20% BTC, 30% 20%
Space,
10%
Comfort, Space, Price,
10% Price, 10% 30%
40% Comfort,
10%

FIG. 16 CAPITAL GOODS FIG. 17 MEDIA AND

AND MACHINES ADVERTISING
BTC, 10% BTC, 10%
Location,
Space,
20%
10% Space,
Comfort, Location, 20%
10% 50% Price,
15%
Price,
20% Comfort,
35%

FIG. 18 GOVERNMENT FIG. 19 FMCG AND

MINISTRIES AND ORG. AGRICULTURE

BTC, 10%
BTC, 30% Location, Space,
30% 10% Location,
Comfort, 40%
Price, 10%
Space, 10%
20%
Comfort, Price,
30% 30%

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 5.5Conversion Rates

Funneling: It is defined as the process in which rectification at many stages wherein the mass gets
funneled down at various stages. It includes the application AIDA model in which we have to
gather the attention of the potential customers. After that we have to generate interest, those
who show interest becomes suspects. At the third stage, we produce the desire for a particular
product or service and the people who decide to avail the service become prospects. At the final
stage, action takes place where sales is done and revenue generated, those final set of people
become customers.

Potential Customers

Suspects

Prospects

Customers

Fig.20

According to the above model, we calculated the conversion rates at each stage and coming down
the funnel, the figures diminishes proportionally
I Stage:
Number of calls done (Potential customers) = 1200
Number of proposals sent (showed interest, thus, Suspects) = 96
So, Conversion rate at first stage = (96/1200)*100 = 8%

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 1ST STAGE CONVERSION
Proposals sent
8%

Calls rejected
92%

Fig. 21
It shows 8% of Suspects after first stage of funneling.

II Stage:
Number of proposals sent = 96
Number of meetings done with suspects (now they become Prospects) = 18
So, conversion rate at second stage = (18/96)*100 = 12.5%

2ND STAGE CONVERSION

Meetings done
12.5%

Did not agree

to meet
87.5%

Fig. 22
It shows that 12.5% of suspects became prospects.

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 1ST STAGE CONVERSION
Proposals sent
8%

Calls rejected
92%

Fig. 21
It shows 8% of Suspects after first stage of funneling.

II Stage:
Number of proposals sent = 96
Number of meetings done with suspects (now they become Prospects) = 18
So, conversion rate at second stage = (18/96)*100 = 12.5%

2ND STAGE CONVERSION

Meetings done
12.5%

Did not agree

to meet
87.5%

Fig. 22
It shows that 12.5% of suspects became prospects.

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III Stage:
Number of meetings done (Prospects) = 18
Number of clients onboarded (Customers) = 3
So, conversion rate at third stage = (3/18)*100 = 16.67%

3RD STAGE CONVERSION

Clients
onboarded
16.67%

Service not
required
83.33%

Fig. 23
It shows that 16.67% of the total prospects became customers.

Net Conversion:

Fig. 24 Total data of 1200 Potential Customers

Prospects Customers
Suspects 2% 0.25%
8%

Service not needed

90%
Service not needed Suspects Prospects Customers

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5.6 Interpretation of Findings

We found the sector-wise variation of different divers that influence the decision making of
hotel booking for stays. The results were intriguing as each sector showed a different
dominating driver. The interpretation of the same can be made by observing the needs and
requirements of different sectors.

Pharmaceuticals: The dominating driver is Price. This is due to the fact that pharma industries
run on sharp margins and cost cutting is very important in order to keep the cost of the
manufactured products optimum. Moreover, major travelling is done by sales team where the
budgets for hotel bookings remain low.

IT: For It Sector, BTC and Price comes at the top. This might be as such because in IT sector,
travelling happens in bulk. So, they require mass bookings. Hence the focus on the pricing of
the rooms, as far as the travelling of normal employees is concerned (not CXOs). BTC also
topped because payment at the time ok check-out isn’t possible for so many employees at the
same time. Hence, they will always be needing a credit period.

Capital Goods and Machines: Location topped in this sector. We found the reason for the
same from the responds collected in the DSR. Most of the times, travelling in this sector is
done by the servicemen taking care of the heavy machineries at different obsolete locations.
They have to do the servicing, or repairment and have to come back as soon as the work gets
over. Hence, they prefer to book a room which is in the vicinity of the work location.

Media and Advertising: Comfort is at the top in this sector. The result can be interpreted in a
way that people who travels in this sector have to be there present for filming purposes and a
lot of hard work involves irrespective of the weather outside. Thus, they seek comfort so that
they can get rest properly. They also seek extra facilities such as gymnasium and pool for
relaxation.

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Government Ministries and Organizations: Their requirement in regarding all the drivers is
almost equal. Delegates travelling from different cities for certain purposes wants all the
facilities in house. They are not majorly concerned about the budget but seek all the facilities.
They even want buffet in lunch and dinner and a in-house kitchen and bar. These kinds of
facilities are not available in every property.

FMCG and Agriculture: Location and price are important factors for this sector. Reason
being they have to cover a large network and have to travel to numerous places. Therefore,
they make sure the properties are available even at the remote areas. Mostly, travelling is done
by salesman and people of marketing which is done in bulk and hence, to save on costs, they
prefer budget friendly properties at desired locations.

CONVERSION RATES:

As we can refer form the pie-charts, the net conversion rate is very low in Delhi-NCR region.
Only 0.25% of the potential customers onboarded with Fabhotels. The prospects were 8% of
the total potential customers (1200). There might be various reasons why the conversion rates
are so less. Our interpretation is given below:

Saturated Market: The market of Delhi-NCR is very saturated. All the big companies are
already in a tie-up with FabHotels or with some other provider. The start-ups were not
interested at all as their requirements are less and seasonal. They denied directly for the tie-up
and conveyed that they can do the bookings by themselves as the room night they needed are
very less. Most of the areas of Delhi-NCR were already mapped when I joined as an intern and
there was a hard time finding the companies that were untouched. Many a times, two interns
approached the same company and this reflects the saturation point of the market in NCR
region.

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New Booking Policy: During the phone conversations with admins of numerous companies,
it was clear that organized companies working on a large scale sdopted a new policy where
they specify the budget of a room to the employee, according to their position and they can
themselves do their bookings. This factor leads to increased satisfaction among employees but
is harmful for us. They had the budget but they cannot come into a contract as self-booking is
now more prevalent in the market. Now, it is solely dependent on the employee which hotel
chain he choses to stay.

Awareness and Visibility: Although Fabhotels have its core competency in corporate stays,
even then many potential customers were not aware of the company and its services. The
visibility of the company is low in the market. It lacks in advertisements, social media presence,
collaborative events as well as in physical visibility. Most of the funds goes into tech-enability,
improving the tech back end and enabling tools.

Escalations Past Escalation Experience: Conversion rate is also low due to the escalations
that come in process. It should be highly taken care of that the escalation should not occur in
pilot bookings but it also happens and as a result, company do not sign any contract as they
face problems in their first booking. Some companies that used to be associated with Fabhotels
is not associated anymore due to increased number of escalations.

Unavailability of properties in many regions of the country: Many a times, the prospect do
not onboard with Fabhotels as the properties are not available at tier-3 cities which is the
biggest market of 3-star stays. They also lack properties at hill stations. For instance, at
Mussoorie in Uttarakhand, there is only one Fabhotel and on the other hand, there are more
than 400 properties of OYO.

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6. Conclusion

According to analysis Fab was lacking in their promotional activities and they can improve by
doing effective marketing research. This result shows a negative perception towards Advertising
and in Branding. There is an average market potential of Fab hotel in Delhi-NCR region. So, the
company can improve its sales level by giving effective training to their employees. They can
create a new marketing strategy to improve their sales level rapidly. This report is analyzing the
drivers that drives the business is certain and identified but the working on visibility and fulfilling
requirements is of utmost importance.

Service businesses have been growing rapidly in recent decades, while customer demand for high
quality service is increasing. To remain competitive, the hotel needs to analyze customers’
expectation and perception along with service quality of its room service staff. The questionnaire
aimed to analyze the gaps of room service quality & Customer perception and expectations.

One of the fastest increasing industries is the hospitality industry. Many players enter this sector
as it is one of the most appealing and seemingly increasing sectors. In 2014, Fabhotels joined this
sector and began operating using a model of franchise. The strategy it used was distinct and it went
into this sector with the objective of becoming the sector leader in hotels in the budget category.

I acquired understanding during my internship at Fabhotels about how the business is persuading
the companies to join them and what proposals they are offering to their customers. While
attempting to embark on various Fabhotels corporations. I also learned about the various main
drivers influencing the company's choice to book hotels and learned that these drivers differ across
sectors.

The budget hotel market in the Delhi-NCR region was saturated, so it was very difficult to board
corporations as corporate offices are not prepared to embark for several reasons. The reason may
be that they are either already on board with some other hotels or they don't have to associate with
Fabhotels or they don't have a budget hotel necessity.

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7. Limitations

o Their Competitors are using aggressive marketing strategy to promote their

services.

o Some corporates refused to prefer Fabhotels because of the past escalations and
lacking in follow-up from the hotel’s side.

o They are into internet marketing but they are not much active in all social media
platforms.

o They have only Domestic hotels, not at the international level.

o They have a Tie up with only 450+ properties, whereas its biggest competitor OYO
has a tie-up with almost around 8000 properties.

o The major part of any funding was used for improving software and technological
upgradation, they did not focus on expanding and tying-up with new properties

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8. Recommendations

o Fabhotels should operate on their escalation scheme because customers end up

complaining a lot about the company's service. It should therefore concentrate on
enhancing escalation and ensuring customers are not faced with service-related
issues.

o The company should expand its operation in Tier 2 and Tier 3 cities as well as they
are not present there.

o The properties they lease should at least have an in-house restaurant or kitchen
because it is usually requested by businesses and most properties do not have this
facility.

o Properties should also have conference halls as the company’s main target customer
are the corporate clients.

o There is a huge difference in Fabhotels ' website price and the prices they offer to
their corporations as this makes it difficult to embark on the corporations as it is
impossible to justify such price differences.

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 BIBLIOGRAPHY

www.fabhotels.com
www.wikipedia.com
www.getresponse.com
www.ebsco.com
www.ibef.org
www.tourism.gov.in
Das and Malhotra Book on Marketing research

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