Banyan Tree 07

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Banyan Tree 07

  1. 1.
  2. 2. Banyan Tree Resort Expansion<br />Banyan Tree Resort Expansion<br />To the pristine island of Palawan, Philippines … <br />Keith Bergh, Brianne McElhiney,<br />Patti Grandidge, Kari Goebel<br />April 16th, 2008<br />
  3. 3. What is our Business?<br />
  4. 4. Company Background<br />Banyan Tree’s Mission Statement: <br />“We want to build a globally recognized brand which by inspiring exceptional experiences among our guests, instilling pride and integrity in our associates and enhancing both the physical and human environment in which we operate, will deliver attractive returns to our shareholder.” <br />
  5. 5. Company Background<br /><ul><li>Founded in 1994 with opening in Phuket
  6. 6. Development, Management, & Ownership of luxury Resorts, Spas, & Hotels
  7. 7. Received over 300 Awards
  8. 8. Dedicated to Preserving the Environment
  9. 9. Emphasis on Social Responsibility </li></li></ul><li>Company Background<br />Financial Summary<br /><ul><li>Revenue in 2007 increased 29%
  10. 10. 312.257M USD Total
  11. 11. Net Profit in 2007
  12. 12. 75.831M USD
  13. 13. Stock prices continuing to rise at steady rate
  14. 14. Due to future development & expansion
  15. 15. Issued 16,000,000 New Shares last year
  16. 16. Issue 15,000,000 for this year
  17. 17. Current Ratio: 6.11
  18. 18. Strong Ability to pay off short-term debt</li></li></ul><li>Environmental Analysis<br />
  19. 19. Social Forces<br /> Demographics<br /> Population: 91 Million<br /> Age Structure<br /> 0-14: 34.5%<br /> 15-64: 61.3%<br /> 65+: 4.1%<br /> Birth Rate: 24.48/1,000<br /> Life Expectancy: 70.51<br /> Median Age: 22.7 <br /> Population Growth Rate: 1.764%<br /> Death Rate: 5.36/1,000<br /> Fertility Rate: 3.05<br />
  20. 20. Social Forces<br /> Culture<br /> Family-based Groups<br /> Materialism & Leisure<br /> Motivated to Work Hard<br /> Religions<br /> 80.9% Roman Catholic<br /> Language<br /> Filipino & English<br />
  21. 21. Economic Forces<br /> Macro Effects (Philippines)<br />GDP<br />Average Growth since 2001: 5%<br />2007: 7%<br />$144.13B USD (2007)<br />PPP<br />298.9B USD (2007)<br />BOP<br />1.9B USD (2007)<br />Unemployment is about 7.3% (2007)<br />30% of pop. is under poverty line (2003) <br />“First World Country” by 2020<br />
  22. 22. Economic Forces<br /> Micro Effects (Banyan Tree)<br />2005 2006 2007 <br />Revenues $187.3 $335.3 $429.9 <br />(in millions)<br />2005 vs. 2006-79% increase<br />2006 vs. 2007- 26% increase<br />2005 2006 2007<br />Total Expenses $153.4 $224.9 $301.6 <br />(in millions)<br />2005 vs. 2006-57% increase<br />2006 vs. 2007- 34% increase<br />
  23. 23. Technological Forces<br />Innovation/Changes<br /> Tropical Garden Spa<br /> Restaurants<br /> Facilities<br /> Classes <br /> Rooming Upgrades<br /> Integration of Electronic Systems<br />
  24. 24. Competitive Forces<br /> Competitive Environment<br /> Driven by Business & Tourist Travel<br /> Smaller companies stay competitive through destination & premium service<br /> Hoover’s Top 5 List of Upscale/Luxury Hotel Companies:<br />Marriott International Inc.<br />Global Hyatt Corporation<br />Hilton Hotels Corporation<br />Starwood Hotels & Resorts Worldwide, Inc.<br />Wyndham Worldwide Corporation<br />
  25. 25. Regulatory Forces<br />Philippine Environmental Impact Statement<br /> Labor Code<br /> Philippine Immigration Act<br /> Business Registration Procedures<br />
  26. 26. Political Forces<br /> WWII: Japan Rule<br />1946: Independence<br />1965-1988: Ferdinand Marcos<br />Suppression of democratic institutions, corruption & restriction of civil liberties<br />1988: Corazon Aquino<br /> Less effective to stabilize nation<br /> 2001: Gloria Macapagal-Arroyo<br /> Economic Growth<br /> Still Poverty Problems<br />Terrorist Threats<br />
  27. 27. Natural Forces/Acts of God<br /> Philippines<br /> Typhoons & Cyclonic Storms<br /> Volcanoes<br /> Earthquakes<br /> Tsunamis<br /> Palawan <br /> Generally safe from natural disasters, but must always prepare for the worst<br />
  28. 28. S.W.O.T Analysis<br />
  29. 29. Strengths<br />Natural Sanctuary<br />Transportation & Travel<br />Communication<br />Peace & Order<br />First Aid<br />Testimonies<br />Company Growth & Health<br />
  30. 30. Weaknesses<br />Politics & Corruption<br />Economic Instability<br />Natural Hazards<br />Current Environmental Issues<br />Disease<br />
  31. 31. Opportunities<br />Global Prospect for Hospitality Investment<br />Natural Environment<br />Wellness Vacations<br />Palawan’s Development Program<br />
  32. 32. Threats<br />Competition<br /><ul><li>Aman Group #1
  33. 33. Clientele Similar to Banyan Tree
  34. 34. Amanpulo in Palawan – Direct competition</li></li></ul><li>Marketing Mix Strategies<br />
  35. 35. Product<br />Growth Stage of PLC<br /><ul><li> Rapid Increase in Sales & Consumer Awareness
  36. 36. Repeat Purchasers</li></ul>Product Adaptation<br /><ul><li> Cultural Differences
  37. 37. Legal Concerns
  38. 38. Local Competition</li></ul>Brand Personality<br /><ul><li> Sophisticated, Elegant, Innovative, Hospitable, Relaxed</li></ul>Brand Equity<br /><ul><li> World-Class Accommodations & Service = Brand Loyalty</li></li></ul><li>Price<br />Objectives<br /><ul><li> Hit on Profits & Sales</li></ul>Constraints<br /><ul><li> Price Escalation of Imports
  39. 39. Government Intervention
  40. 40. Fixed vs. Variable Pricing</li></ul>Cost, Volume, Profit Relationships<br /><ul><li> Cost of Development: 92M USD</li></ul>Demand-Oriented Pricing Strategy<br /><ul><li> Price Skimming
  41. 41. Implement similar strategy as other resorts</li></li></ul><li>Price<br />Listed Price <br /><ul><li> Prices will vary
  42. 42. Pegged to the US Dollar; Minimize Peso fluctuation
  43. 43. Standard Beach Villa: $350 USD - $550 USD
  44. 44. Beach Villas w/ Plunge Pools: $450 USD - $650 USD
  45. 45. Duplex Beach Villas: $800 USD - $1000 USD
  46. 46. Over Water Bungalows: $650 USD - $850 USD</li></ul>Adjustments in Price<br /><ul><li> Discounts
  47. 47. Seasonal (Low-Season)
  48. 48. Quantity
  49. 49. Returning Guests = Brand Loyal</li></li></ul><li>Place<br />Construction Channels<br /><ul><li> Labor & Construction Contracted out </li></ul>Supply Chain<br /><ul><li> Efficient
  50. 50. For imported wines, beers, certain foods, accommodation necessities at other resort locations
  51. 51. JIT System
  52. 52. Reduce inventory costs of goods
  53. 53. Need a communicative & cooperative supply chain
  54. 54. Quality Supply Chain Manager</li></li></ul><li>Promotion<br />Pull Strategy<br /><ul><li> Advertising
  55. 55. Travel Magazines, Billboards, Select Internet Sites
  56. 56. Standardized with minimal changes to adapt to the culture
  57. 57. Public Relations
  58. 58. Spots on TV Travel Shows; Publicity in News; Draw Celebs to hotel; other Mediums</li></ul>Push Strategy<br /><ul><li> Direct Marketing
  59. 59. Travel Agents
  60. 60. Suggest to Clients
  61. 61. Receive discounts / Percentage of sale</li></li></ul><li>Positioning<br />Continue with Banyan Tree Success<br /><ul><li> Distinguished Luxury Resort Brand
  62. 62. Positioned towards target market
  63. 63. Wealthy Families
  64. 64. Retired Couples
  65. 65. Honeymooners
  66. 66. Grow Companies Current Image</li></ul>Differentiation<br /><ul><li> Be the Leading Luxury Resort for Palawan
  67. 67. In direct competition with Amanpulo and New Entrants </li></li></ul><li>Organization & Hiring Strategies<br />
  68. 68. Company Organization Chart<br />Company Executives<br />Country Managers<br />Resort Managers<br /> Many Managers at Resort<br /><ul><li> Strategy of focusing and catering to ensure high quality </li></li></ul><li> Geocentric Approach <br /> For Country President, Resort President & VP <br /> Relocated from other Banyan resort or corporate<br />Polycentric Approach<br /> For Staff Managers, Resort Recreation Manager, Guest Relations Manager, & Chef/Catering Manager<br /> Help maintain local motivation, respect, communication & help reflect culture in fields<br />Hiring & HR<br />
  69. 69. Costs & Timeline<br />
  70. 70. Cost of Development<br />92M USD Capital<br /> 60M from Banyan Tree Holdings Limited<br /> 32M loan<br />
  71. 71. Timeline<br />Gantt Chart<br />Would like to open March 2010<br /> Quick process to stay ahead of other new entries<br />
  72. 72. Forecast & Future .Outcomes<br />
  73. 73. Financial Forecast<br />Operating Expenses increase 1.16% a year<br /> Based on Inflation Increases<br /> Make profit and pay off debt and loan after 6 years<br />
  74. 74. Goals & Outcomes<br /><ul><li>Win 10 Reputable Accolades & Awards by 2013
  75. 75. Including membership into the “Leading Hotels of the World”
  76. 76. Featured in write-ups and travel documentaries
  77. 77. Credentials & Recognition from Government
  78. 78. For Social Responsibility & Attracted Tourists as FDI
  79. 79. Average Daily Occupancy Rate: 75%
  80. 80. Be one of Banyan Tree’s flagship locations</li></li></ul><li>Questions and Comments<br />

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