Suitable Working Time and Compensation of The Oberoi Hotel Group

The Oberoi Hotel Group suffered major drawbacks as a result of the 2008-2009 global financial crisis. The profit before tax, profit after tax, and the total revenue figures were significantly reduced. However, after the crisis, the hotel group has undertaken various expansion projects in different parts of the world. Its performance has tremendously improved and has been ranked among the top hospitality brand in India. The management has enhanced strategies in various aspects of the company's operations such as expansion, corporate social responsibility, sustainable development, employee recruitment, and learning and development as well as finance and risk management, auditing, and promotional mix.

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Introduction

The Oberoi Hotel Group was formed in 1934. Its main founder and first CEO are Rai Bahadur, M.S. Oberoi. The group has established 31 hotels since it was created and at present, it is operating in six countries (Lakhwani, Tiwari & Jauhari, 2017). The group also offers services and products such as travel, tour services, corporate air charters, car rentals, airport restaurants, and project management ((Batabyal, 2015). A distinctive feature of the hotel group is evident in the quality of services offered by its team which is composed of highly motivated staff. The team has a good reputation for providing superior quality and excellence products and services in hotels in India and other parts of the world (Assaf, 2012). Some of these hotels operated by the group comprise The Oberoi, New Delhi, The Oberoi Bengaluru, The Oberoi Dubai, The Oberoi, Bali, and The Oberoi Mauritius among others (Sahoo, 2014). This paper aims at identifying the performance of the hotel group in relation to the global financial crisis. Furthermore, the essay will review the strategies that have been adopted by the group during and after the financial crisis.

During the 59th Annual General Meeting of the Oberoi Group, the Chairman Mr. Oberoi remarked that the global financial crisis had resulted to a significant decrease of tourists in India. He also said that the terrorists' attacks on Mumbai contributed to the same (Stephens Balakrishnan, 2011). The reduction of the tourists in the country significantly impacted on the hospitality industry of India, a sector where the group has invested heavily (Jauhari, 2009). There was a reduction in the productivity and performance of the hotel group. The impacts were in the form of dropping average room rates and occupancies which led to overall decrease in profit margins (Henderson et al., 2010).

PerformanceAccording to Hilman and Kaliappen (2015), the performance of the group during the 2008-2009 global financial crisis was reduced in comparison to the previous years. The total revenue that the group accrued during the crisis was Rs. 1073.06 crores. In the previous years before the crisis, the revenue was Rs. 1155.11 crores (Sardana, 2010). Similarly, profit margin before tax in the crisis stood at Rs. 273.26 crores. This was a drop compared to the year before the crisis where the profit before tax was Rs. 349.84 crores. Furthermore, in the crisis, the profit after tax amounted to Rs. 170.44 while the previous year it was Rs. 217.23 crores (Sardana, 2010). This shows how the global finical crisis greatly impacted on the business performance of the Oberoi Hotel Group.

Shortly after the financial crisis in 2009, the total income for the group stood at Rs. 218.10 cores, while in 2008 it was Rs. 253.12 crores. Similarly, in the first quarter of 2009, the profit after tax was Rs. 19.05 crores, while in the previous year it was Rs. 38.01 (Sardana, 2010). According to the remarks by from the chairman, there were positive signs after the crisis given that the Indian government was regaining stability (Zook & Allen, 2016). He had expected that China alongside India would lead the world towards recovery from the financial crisis. He was speculating a 7% growth in the GDP in 2009 (Sardana, 2010). The below in figure. 1-4 which illustrate the performance of share capital, net worth, profit after tax, and divided per share of the group from 2007 to 2017 (Peng, Zhao & Mattila, 2015).

Furthermore, the hotel group has been tremendously recovering from the global financial crisis (Pinto, 2015). Other statistics from various parts of the world from its different branches also reveals recovery in the tourism industry (Peng, Zhao & Mattila, 2015). The World Travel and Tourism Council's study on the tourism sector in 2017 showed a growth of 3.3% (Lakhwani, Tiwari & Jauhari, 2017). Recent studies show that in India, the tourism industry makes up 33 percent of all the foreign earnings (Niewiadomski, 2014). Other survey by Coste-Maniere, Panchout and Molas, (2012), also revealed that the industry has the highest potential to create employment opportunities in the country. By the year 2027, the industry is expected approximately fifty million jobs (Lam, Ho & Law, 2015). As stated earlier, the Oberoi Hotel Group is hugely dependent on the visitors from different countries. Therefore, the improvements experienced in the tourism industry translates to benefits to the group (Gladstone, 2013). The table. 1 below provides the highlights for the financial assets that the group currently has as defined by Lakhwani, Tiwari and Jauhari (2017).

In 2016, the readers of news article such as Travel and Leisure magazines ranked the Oberoi Hotel Group as the best hotel brand in the world (Lakhwani, Tiwari & Jauhari, 2017). This title was acquired for the second successive year by the group. The company has recently focused on expanding its domain by creating new branches and outlets in strategic locations (Das & Thomas Jr, 2016).

Business StrategiesEmployee Retention StrategiesHiring the Right People from the BeginningBefore, the global financial crisis, the company's strategies were focused on retaining employees (Weaver et al., 2013). The hotel group maintained the notion that retaining employees is a process that starts during recruitment. The group believed that new employees must properly fit with its organizational culture (Gupta, 2012). The group focused on training new employees to ensure they are well acquainted with the group's policies, objectives, and their job expectations.

Suitable Working Time and Compensation

The Oberoi Hotel Group also strategized in developing appropriate working schedules for their employees. The working options were flexible for the employees (Madanoglu, Okumus & Avci, 2014). The group ensured that its workers were compensated appropriately with attractive salaries for different job postings. The management believed that providing a good working environment would reduce issues such as absenteeism and positively impact the job satisfaction for the workers.

Optimizing Employee EngagementThe strategies adopted by the group's management entailed optimization of their employees (Das & Thomas Jr, 2016). The group believed that its productivity would be measured based on the employee engagement and not by employee job satisfaction (Gupta, 2012). The engagement of employees was aimed to increase their performance which would then contributed to the overall productivity of the group.

Expansion StrategiesThe hotel group has made extra moves to expand after the financial crisis to ascertain their market share and capture new opportunities. In light of this, the hotel group has had various projects underway in different areas. The Oberoi, Gurgaon which was under construction was opened in 2010 (Sardana, 2010). The hotel group invested heavily in creating the first section of their Trident hotel. The hotel was set up at the Bangalore International Airport which was new at the time. It opened in 2011, comprising 153 keys. The second phase of the Trident hotel would be comprised of 167 keys, and the speculated date of completion was 2013. The hotel group additionally initiated a project to construct the Oberoi hotel in Hyderabad which would be comprised of 299 keys.

The hotel group moreover has constructed another phase of the Trident hotel at an adjacent site to Oberoi hotel in Hyderabad which consists of 326 keys. Furthermore, the hotel group is considering the addition of another phase of the Trident hotel which would be located in Chandigarh. In the period between 2008 and 2010, the group renovated Trident Nariman Point which is located in Mumbai (Nangia, Agrawal & Reddy, 2011). Additionally, the group was developing another hotel in Business Bay, Dubai which was designed to comprise 252 keys. This particular hotel was planned to be opened in 2011 (Sardana, 2010). It also commissioned the construction of two Oberoi hotels. One would be located in Abu Dhabi and the other one in Oman.

The hotel group furthermore planned to set up an Oberoi hotel in Marrakech, Morocco. It has diversified into flight kitchens, and this has led to the establishment of a flight kitchen at Mauritius and another one in Delhi. In 2016, the group established the Oberoi Sukhvilas Resort and Spa. In 2017, it opened the Oberoi Beach Resort in UAE. The group strategized to expand to Al Raha Beach and Aldar's Yas Island, and it signed the deal with a developer in 2007 in Abu Dhabi (Sahoo, 2014). However, due to the global financial crisis, the project was put on hold. The group management initially directed the resources to other viable projects to avoid unforeseeable wastage which could have resulted from the expansion plans (Zook & Allen, 2016).

Corporate Social Responsibility (CSR) StrategiesThe Oberoi Hotel Group has recently strategized to enhance the efforts it has regarding CSR. There are various initiatives that the hotel group has established such as the Oberoi Grand, Kolkata. This initiative was established to aid an NGO named Sasha which specializes in assisting self-employed women and artisans to increase their productivity. The Oberoi, Udaivillas is another initiative that the hotel group designed to strategically help the residents of Asha Dham, Ashram, and Mother Teresa Orphanage. The aim was also to help the sick, poor and mentally challenged by addressing their basic needs (Musunuri & Bharwani, 2014). The initiative also led to the cleaning of 270 kilograms of plastic waste from the Lake Pichola. Furthermore, the Oberoi, Bengaluru is strategic decision is a project aimed at nurtureing young girls who are financially and physically challenged as well as senior citizens (Binoy, 2009). The group collaborated with the Cheshire Home Trust to accomplish the set objectives. The program also resulted in the planting of trees by the hotel staff and visitors in different locations (Lakhwani, Tiwari & Jauhari, 2017). The hotel group has significantly also contribu...