Investment Analysis for the Okura Hotels and Resorts in Connection Assignment

Investment Analysis for the Okura Hotels and Resorts in Connection with Indian Market Entry - Assignment Example This paper aims to establish the prospects of entering the Indian hotel industry by Japanese company Okura Hotels and Resorts. This hotel chain accounts for one of the finest deliverer of luxury services in many countries. The fast growing economy of India stipulated dramatic growth of the tourism sector in the country. There has been a subsequent shortfall in the number of hotel rooms to meet the demand in India. This has been the cause of fuelling room rates across the nation and India turning into a popular hotel destination for businesses. There are a number of MNC hotel giants flocking in the country and many of them are also seen to be entering into joint ventures. The nation’s government has been showing approval for the setting up of a number of new hotels, which is also viewed positively by both local and foreign businesses. The hotel chain groups and hotel industry are seen to be showing bullish behavior and optimistic attitude about their investments plans. The portfolio of the Okura Hotels and Resorts comprises of 23 renowned hotels. Of them, 16 are located in Japan while the rest are located in overseas. Now, the company selects Mumbai to set up their hotels.Some of the weaknesses and threats for the company in establishing in India is the fact the cost of land account for 50% of the project costs which is substantially less at the rate of 15% aboard. Also the existence of large, renowned and international players like Taj and Oberoi are expected to significant competitive threat for the company.