The Hotel Corporation of India Story|Business Strategy|Case Study|Case Studies

The Hotel Corporation of India Story

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Case Details:

Case Code : BSTR015
Case Length : 7 Pages
Period : 1975-2001
Organization : Hotel Corporation of India
Pub Date : 2002
Teaching Note : Available
Countries : India
Industry : Hospitality

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This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.

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HCI's Problems

Analysts attributed a majority of HCI's problems to poor planning. Most of the company's hotel projects ran into huge cost and time overruns, because of faulty planning and implementation.

Between 1975-1986, projects worth Rs 527.6 million were completed at a total cost of Rs 881.9 million (Refer Table III).

While a major part of the increase in the cost of the projects was primarily due to price escalation arising from time overruns, there was also a sizeable increase in the costs on account of changes in the scope of the project, indicating a lack of proper planning (Refer Table IV)...

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The Revamp

After the disinvestment was started, HCI undertook a major revamp exercise to prepare itself for the 'sale.'

Managing Director R C Aggarwal said, "We are sprucing up our facilities at a cost of Rs 100 million in the first phase, so that the government can mop up a maximum consideration out of its disinvestment."

In the first phase of this revamp, 60 rooms in the CHBA were renovated and made more spacious and equipped with facilities like a ready-to-use Internet connection. The lobby, coffee shop and health club were renovated with special attention to the ambience, finish and decor. A similar renovation exercise was carried out for 84 rooms at the CHJB. By June 2001, the first phase of renovation at the Juhu Beach hotel was completed and the second phase was started...

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