The Baglioni Hotel in Milan was established in 1973 and is known for its luxury Italian hospitality. It has 92 rooms decorated in antique Baroque style. While occupancy dropped from 2010-2011, the average daily rate increased by 5%. The hotel targets luxury customers and aims to provide personalized, tailored experiences. A SWOT analysis found strengths in its prime location, reputation, and staff, but weaknesses in limited coverage and need for loyalty programs. It segments customers as 65% corporate travelers and 35% leisure, and uses differentiation to target high-income Russians, Arabs, and young professionals.

1. Monica Perna, Cristina Patelli,
Simona Cusenza, Diletta Scarani

2. The Group

3. • Group established in Tuscany in 1973 by Roberto Polito
that is the chairman today.
•Style of hospitality, passion for service and Italian warm
•Very attentive to customer care and satisfaction
•“Tailor made” experiences to guests through personalized
services
•Make people feel like at home
•Create unforgettable moments
•Perceived as unique

4. Luxury with the Italian touch

5. Awards & Charity (CSR)

7.  Opened in 1962. Located: Via Senato, 5
 5-star hotel characterized by antique authentic
furniture, marble mosaics and stlylish drapes.
 92 personalized rooms
 F&B facilities (Il Baretto and Caffè Baglioni)
 Four meeting rooms and Spa

8. Economic Performances
 The hotel had a drop in Occupancy from 2010 to 2011, from
57,48% to 33% (until now, May), our high periods in Occ.
are March, April (due to Furniture’s fair) and September for
the Fashion week, our peak days are Sunday, Monday and
Thursday, our ADR is slightly increase of 5% than 2010
(from 335.12€ to 354.10€).

9. Macro-environmental analysis
 Demographic/cultural environment
 Economic environment
 Natural environment
 Political environment

10. Competitors

11. Indirect Competition

12. Customer service
 Guest questionnaires for customers
 Guest’s comments sources:
 Tripadvisor: it’s positioned at 177 on the rank of
Milan’hotels. Some negative comments about the
bad relationship quality/price
 Baglioni Hotel website: positive feedbacks related
to the good service customers receive and the
excellent position of the hotel.

13. Market positioning

14. • Targeted segments: luxury and taste
• Company’s mission: peculiar attention to the client
perfect match
• Hotel’s resources to build its competitive advantage:
tangible resources: hotel facilities and design
 intangible resources: reputation and brand
equity
 professional competences

15. Buyers’ criteria:
tangible attributes: hotel’s location, baroque
design, MICE facilities, complementary services
(concierge advice, gourmet restaurant, efficient reception service, trained
staff, Wi-Fi, satellite TV, free open bar, personalized service)
intangible attributes: hotel’s
brand, reputation, image, charity project, status
symbol, icon of a VIP hotel

16. SWOT Analysis

17. • Strengths:
Location: down town Milan, in the most
important fashion district
Strategy: established differentiation strategy
Reputation and image: clear and well
communicated brand values
Prestige: provided by the awards received
Unique product: luxury with an Italian touch

18. • Strengths (Continued):
Atmosphere: make customers feel at home
Served clientele: high income customers less
vulnerable to economic fluctuations
Staff: well trained, motivated and loyal
employees
Partnerships: with suppliers and hotel consortia:
The Leading Small hotels of the world
Flexibility: compared to big chains requiring
more time to react to changes

19. • Weaknesses:
Limited coverage: Baglioni hotels are mainly
located in Italy and France
Strategy: serving all the customer’s needs
providing a valuable service is time and money
consuming
Loyalty programs: no loyalty cards provided to
customers
Customers’ complaints: written complaints on
the website (ex. in the lobby smoking is allowed)

20. • Weaknesses (Continued):
Staff: no turnover and no freelances imply
high fixed costs
VAT: 20% VAT in Italy
Facilities: meeting rooms require renovation
and frequent maintenance as to stationery and
ICT equipment
Advertising: little advertising, Facebook
page needs to be improved

21. • Opportunities:
International market: expansion strategy
starting from the next opening in Marrakech in
2012 and projects for possible new openings in
USA
E word of mouth: proper use of new media as
Tripadvisor
Repeat customers

22. • Threats:
Market challengers: expansion of small
hotel chains ( AC hotel has recently joined
Marriott to strengthen its present across and
outside Europe) and new openings (W hotel
will be opened in Milan in May 2012)
Local competition: single unit hotels
Substitutes: center located business
apartments

23. Market segmentation

24. • Differentiation strategy and concentrated
micromarketing approach
• Customers:
1) 65% corporate
2) 35% leisure
Leisure
35%
65%
Corporate

25. 1) Corporate:
40-60 year old businessmen
upper class - price insensitive
 weekday stay
sophisticated and “cuddling” service: limo and
room service, welcome gifts, spa, gym and Wi fi
meeting facilities needed

26. Corporate:
1. a) Russian guests:
high income businessmen - DINK
 extend their stay to go shopping
Lead time: the day before arrival
Booking channel:
booking websites - Booking.com-
wholesalers -Amandatour, Gulliver Travel-
LOS: 3-4 nights

27. Corporate:
1. a) Russian guests (Continued):
Preferences: smoking rooms, personal shopper
babysitter
Spending capacity: “spare no expense”
Background:
BRIC country with the highest GDP per capita
consumption levels converging with the West

28. Corporate:
1. b) Arab guests:
high income guests (mainly sheiks)
wives, children and servants
Lead time: 2-3 weeks before arrival
Booking channel: the hotel
 LOS: at least one week

29. Corporate:
1. b) Arab guests (Continued):
Preferences: min. 3-4 rooms,
no travel during the Ramadan month
Spending capacity: stable
Background: increase in GDP per capita,
more equal distribution of income
investments of oil profits in new businesses like
MICE

30. 2) Leisure:
25-35 year-old men and women
 week end stay
Baglioni Aperitivo with VIP
special tailor made packages (ex. Sweet
Suite)

31. The 8 Ps of Marketing

32. Product

33. Price
Average Rate 2010
Low season High season
(without VAT)
Standard Room 400 € 600 €
Deluxe Room 460 € 700 €
Junior Suite 600 € 900 €
Suite 900 € 1500 €

34. Promotion

35. Place (distribution)

36. Partnerships

37. People
• 50 people working in the
hotel
• Training on the job
• Short-term contracts
Packaging / Programming
• 5 star luxury hotel
• Baroque style
• Hotel’s aim: giving a tailor
made service to customers

38. Strategic Pyramid

39. December 2012
Xmas Shopping
Break
Events
Day Spa + Happy hour
Adv on Booking.com
Jan 2012
Create Packages for US people