HOTEL SETTING CASE STUDY

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EXECUTIVE SUMMARY

The LSBU group of operators is a shining star among five star hotel group constellation. It’s my pleasure to announce that LSBU group with its head office at London, is a global leader in hospitality sector expanding business over a range of hotel categories in developed countries. We boast of having almost all types of luxurious sections and Market penetration sections under our belt comprising of Luxury hotels, fast food outlets, budget hotels, contract catering, night club, fine dining experience and event management. LSBU is renowned for its easy to access service and locations in almost all major cities of the developed countries. The hospitality sector is facing a wave of changes irrespective of class and location. Customers are more shifted towards those hospitality sector where they can customize their needs and desires (Nordin, 2005). With increased demand for personalization, increase demand for innovative comfortness the luxury definition is ever changing with addition of new services (Vigneron, 2004 ). Luxury is not absolute necessity, but the players in market upgrade their services to such extent, thus setting benchmarks which are considered to be standards (Presbury, 2005). With reports suggesting, the arithmetic increase in wealth, and increase in perception of luxury from mere brands to innovative experience we hope the time has arrived for LSBU for strengthening its position in luxury hotel section (Wu, 2009). Having our presence in all 10 developed countries of the world where we boast of having 6 luxury hotels and 4 budget hotels, it is the right time to go more aggressively into this section thus enhancing the business and our brand image.

The strengths, our diverse background of our employee and our expanded service section from reasonable to highly luxurious ventures makes us market shapers and set the stage perfectly to plunge into this business (Garib, 2012). This report will present a comprehensive plan of expanding business in luxury hotel section in Middle East to increase our market share, profit share and reaching to more customers. Laced with knowledge current trends of luxury hotel section, and knowledge of common customers needs and innovative growing needs in this section makes us perfect players to make entry into such emerging markets (Lowe, 2012). The market research includes both primary data available in that section complemented by theories and concepts thus giving us scientific push into the business. The report identifies five category of customers, which will be first of its kind in history of LSBU business operations, thus addressing the invisible gaps in hospitality sector. For knowing our strengths and area which needs improvement to plunge into this business this report represent a SWOT analysis. This report has tried its best to be realistic in terms of customer identification, market identification, future market, business plan development based upon the strengths of LSBU. The report also contain geographic and demographic factors which always play a role in hospitality business. We focused upon products and services in marketing mix section to make sure our pricing strategy talks to the current demand and to customers demand. The last section recommends an action plan in order to achieve the target of market penetration and establishment.

MISSION

 

The LSBU should make an objective to enter into Middle East countries as a Luxury Brand and facilitating guest some of the world’s most innovative luxury memories ever imagined. Our mission is to give taste to new range of customers of our motto – Home away from home in Mother Nature lap where they can leave their worries at our door step to have a time of their life. Being owners of hospitality operations, LSBU we look forward to provide ultimate service and try our best to facilitate personalized service to our guests.

 

COMPANY DESCRIPTION

LSBU is a market leader in hospitality business hosting a range of hospitality business in developed countries. Starting from fast food outlets chain, event management to luxury and budget hotels under our achievements, we display our diverse range of capabilities and managing powers in hospitality sections. Our successful existence in such a competitive world, in higher economies implies our commitment to provide better each and every time. With our head office at London, we have successfully established regional offices in order to provide best customer support and reaching to more customers. This has established us as market players. The beauty of our luxury sections is our flexibility. We have no reservations such as only for booked guests, or long time stay (Enz, 2010). Our mission is to provide luxurious experience even for an hour also to our customers which will make them feel how luxury get defined by us. This act as both advertising strategy as well as building strong customer platform and market penetration. We hold capability to host major events, conferences and other official meetings at our setting with absolute zero error and smooth running process. Our achievement sections display’s our potential in this domain. We prefer to be more environment friendly, thus giving our customers best experience with nature. With soil layered filtered mineral water, re use of flushed water after filtration for fountain, recycling of bio degradable waste to form manures for our gardens have made us unique leaders and brought us many awards (Han, 2010). With our own range of products and services which are customized according to customer choices, we try to reach heart of customers more than bread and butter. To make the process easier we have website with each country’s native language and English language too making us truly global and show how much we bother about our customers. The website provides the facility of pre booking which can be booked by logging into our main website or country wise thus increasing comfort for the customers (Walls, 2011). Our range of restaurants and spa services at our luxurious hotel settings shows our commitment to establish a global village and to meet need of customers from each section. Having such a strong portfolio, we think it’s high time to enter into the Middle East in a much innovative way. The market is emerging one, which really caters to our needs.

CURRENT MARKETING SITUATION

Undoubtedly, LSBU is the market leader as far as hospitality business are concerned. The question rises especially with regard to Middle East, how LSBU perform in this region of world. This is because even though late, but Middle East countries are coming up with other developed countries as next luxurious region of world. The example of Dubai and Kuwait, success of JW Marriot hotel in Saudi Arabia at international level is enough to speak about these areas and hidden potential for luxury business (Jayawardena, 2013). There are two categories of guests who flock to these cities or countries- Affluent people and those who are leisure travelers. The country experiences outbound travelers in its luxurious section. This was the trend till some years. Current trend displays a diverse range of travelers including locals, officials on official tour, developing countries carrying out official conferences etc (Kamel, 2010). While most of the travelers are there to enjoy everything from food to stay and other amenities, the business sections is increasing day by day. Based on recent market research, the five categories of customers are identified upon which LSBU can build its business. The categories are mentioned below-

Vacationers

No doubt the outbound tourists or customers are increasing day by day in Middle East countries due to their innovative representation of luxury, but the section which forms the biggest customers of hospitality is vacationers from surrounding neighboring countries. With increasing stress at workplace everyone wants to get some quality time for relaxation and enjoying with their family and friends (Ramanathan, 2011). This makes the hospitality industry of Middle East constantly improve in order to make their own citizens as well as nearby guest citizens happy and enjoyable. While addressing these sections, LSBU must address the cultural issue in their agenda (Stephenson, 2014). Middle East countries are mostly Mohammedan countries having large section of Muslim population. The cultural differences also impact upon the concept and perception of Luxury (Zamani‐Farahani, 2010). It is noted that LSBU, operating in developed countries must have experience in facilitating luxurious opportunities to a diverse section of population, but in this part of world it has to be more cautious due to large cultural differences. But in this concept, the other sections in the vacationer’s group must not be neglected. Thus meeting the needs of such category will definitely help in enhancing our business.

HONEYMOONER’S

The above word send an electrifying shock among all types of business owners in hospitality section. The reason is, the group is diverse, and seekers of quality and luxury. The amenities and beauties of Middle East countries, such as driving fast cars in deserts, as well as going in sea at the same time give them dual experience which they may not get in their own homeland. According to a recent survey, the total number of honeymooners in UK stands at 1.5 million couples per year. The average spending stands at $5000 USD. Those honeymooners who belongs to luxury seekers, trend says they don’t bother to go beyond $7000 spending per year. The research suggests the economic condition does not deters the couples to go for extravagant spending and going for honeymoon (Pizam, 2009). The biggest opportunity for LSBU, in terms of internal customer is that, the number of honeymooner’s to this part of world is very less. While they prefer Caribbean, US and other developed countries the vast majority of honeymooners have no idea on Middle East countries. While political factors play a major role in this, LSBU can play the role of a leader in projecting Middle East as future hot destinations for honeymooner’s and other section of customer. Establishing a chain of luxury hotels in Middle East will definitely talk to these sections who are always willing to fulfill their lives with as many colors as they want. This suggest Middle East still forms a budding place for Honeymooner’s and LSBU can play a great role in its blooming as a dream destination for honeymooners.

 

 Drop ins

This section may sound ridiculous to any traditional luxury hotel owner as drop in customers are never targeted by luxury section hoteliers. As previously mentioned, we will be flexible in our approach drop in customers will be welcomed with same status and hospitality compared to guests who book for days. With increasing economic condition, and after a day of stressful work customer in this section are ever increasing who prefer to reward themselves in order to get satisfaction over their hard work and stressful life. In general, drop ins are welcome occasionally during off seasons, but we can innovate a new strategy by opening a different section in our luxurious segments for our drop ins (Walls, 2011). The target will be giving them luxury experience irrespective of amount of time of stay which will leave an ever remembering life time experience. Chances are much that these sections will turn up for honeymoons, as well as vacations for future visits due to their previous experience at our setting. Addressing these section, may involve a small research to analyze the needs and desires of this section of customers. The reason is due to their short period of stay. This suggests, LSBU has to devise such strategies to enhance their luxury experience from food to service sections in a short period of time. The target should be to experience all our amenities it is not always mandatory to stay long, you can experience same with our short customized package according to your choice.

ADVENTURER’S/TRAVELLERS/PASSION PHOTOGRAPHERS

This section has no limitations. This section can include passion photographers to film crew. The adventurer’s to business team. The best part of this section is to go after enhanced luxury irrespective of cost. The LSBU has much experience in hosting events irrespective of its category which includes business conferences, business parties, film launch, music launch etc. Similarly, the customers of this section belongs to Affluent sections mentioned above who are not deterred by economic condition and always ready to cut their pockets for quality luxury experience. Similarly, passionate individuals who travels round the globe also seeks luxury on their way to make their journey memorable. Addressing this section will definitely help LSBU in expanding their business beyond horizons.

LOCAL UNIVERSITY STUDENTS

This section may not address much towards business, but youth promotion can lead to indirect business. Keeping seasonal offers for students and youth will definitely attract younger generation to have a life experience within budget (Jayawardena, 2013). This section act as the perfect advertising tool or media for any business, as meeting their needs and captivating them helps to pose yourself as a brand made for them. The young and dynamic section even though share very less market can definitely be target to set perfect future customers.

TYPES OF MARKET RESEARCH TO BE CONDUCTED

Prior to venture in Luxury hotel section, it is important to carry out market research in this section. Prior to setting up the hotel, it is necessary to get an insight into our stakeholder’s forum. These forum can facilitate the information about consumers and their likings with regard to luxury hotel. To get review on our business plan, it is essential to get valuable input from stakeholders and customers. A feedback card system for our existing customer’s , new customers and stakeholders comprising open ended questions about setting business in Middle east will do a good job. Their critique as well as appraisal will help us in knowing our strengths and weakness (Jallat, 2011). To show that we value our customers and stakeholders your expert panel must review each suggestions with proper cross check and evaluation methodology and act upon its field implementation. While implementing the suggestions, the techno economic and socio economic feasibility of each suggestion with regard to hospitality industry in Middle East must be taken into account. The following marketing objectives are set for beginning our luxury hotel section in Middle East.

MARKETING STRATEGY

Since we will be establishing our business in luxury section for first time, the strategy will be market penetration first and profit margin increasing second phase.

–          Maintaining positive growth in first and second quarter. It is essential to grow positively not focusing much upon high profit margin. This helps us to understand the customer’s, their review, experiences needed and experiences to be capitalized upon (Singh, 2010).

–          Retaining customers or new customers should be transformed into long term customers. With each customer added to long term category, the market establishment is achieved with slow growth. But this set the platform for future (Prayag, 2014).

–          The occupancy should be targeted for each year and the growth must be in positive aspects. Each year review must help in increase in occupancy for subsequent year (O’Neill, 2011).

Four business, we must set three financial objectives in order to establish ourselves as a brand

–          Target to get double digit growth in each year in a steady manner.

–          The fixed cost must be tried to cut down for the sake of business (Aldehayyat, 2012).

–          The variable cost per customer must be reduced to stabilize the finance of the business.

Strategy for Target Market identified

Our main target is to pose for those sections who wants to have a heavenly experience on earth and during their stay the definition of luxury will be redefined by our service and hospitality. Our main target will be on three core areas

Highly developed, customized quality for our customers

24*7 customer support both online and offline

Beautiful location to give customer’s an experience of Mother Nature and heavenly experience.

At the present moment it is not possible to give an exact sales forecast, but the current market target help us to set two targets for our business plan. Our sales will rely upon two categories- Reservations and second one is drop ins. For the first two quarter, we must target a growth rate of 10% and 15%. The room rent will be kept at $400 per day and must be increased to $750 as enhanced with increased luxurious amenities. Even though the economic downturn is unpredictable but as per our current reputation and brand this quiet attainable. Looking at such data, this looks practical and achievable as far as Middle East market is concerned.

It is essential to know strengths and weakness of LSBU prior to opening operations at Middle East.

CONCLUSION AND RECOMMENDATIONS

LSBU has rich expertise and experience in tourism and hospitality industry. In coming years it is going to increase as the number of tourist’s flocking to Middle East is on rise. Apart from strengths, there certain loopholes which must be addressed by LSBU for successful establishment and achievement of targets. Such as establishment of hotels in luxury section is very capital intensive and labor cost is also high. Even though the tax and tariffs are much lower compared to UK its homeland, the regulations and strict legal laws have negative impact upon value added items (Hazbun, 2010). LSBU still lack aggressive promotional and marketing strategies. This has to be in place to make things happen faster and in robust way. But nevertheless, at the same time there are ample amount of opportunities which can always be explored by the LSBU business unit. In recent years as luxury seekers are shifting their gears towards Middle East, the demands of more hotels rises. Similarly, their governments have declared hotel industry as one of the priority industry to be worked upon (Stephenson, 2014). Opening hotels at government specified places or destination can bring substantial subsidies upon interests and taxes. Currently to increase foreign investment many incentives and concessions are also given. With such opportunities at hand, it’s the right time to plunge into the luxury hotel business section. It is a matter of time to come across the competitors as no field in hospitality is free from competitors. They have potential to give LSBU strong challenge but we hope through our highly diverse talented and expert administrative employee with motivated employee worldwide we will overcome such competitors. Our footprints will definitely be left on soil of Middle East and in hearts of the customers.

 

REFERENCES

 

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Stephenson, M. L., 2014. Deciphering ‘Islamic hospitality’: Developments, challenges and opportunities. Tourism Management , Volume 40, pp. 155-164.

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Zamani‐Farahani, H. a. J. C. H., 2010. Islamic tourism and managing tourism development in Islamic societies: the cases of Iran and Saudi Arabia. International journal of tourism research, 12(1), pp. 79-89.

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