The document analyzes the hotel industry using Porter's Five Competitive Forces model. It discusses the strengths and weaknesses of the hotel industry globally. The analysis finds that rivalry in the industry is intense as there are many competitors. However, hotels can differentiate themselves through good location and quality service. Supplier power is moderate as real estate companies and labor are important but not overwhelmingly powerful suppliers. Buyer power is also moderate as switching costs are low but brand loyalty remains important. The threat of substitutes is also moderate as alternatives like domestic travel may replace international travel during economic downturns.
This presentation gives you an insight into the world of The Ritz -Carlton and helps you understand via marketing fundamentals why designing and managing services are of utmost importance.
Study about Lemon Tree budget hotels , comparing with ginger hotels, fortune , courtyard marriott etc. Identify the current business strategy , current problems and limitations and suggest future marketing strategies for the hotel
This presentation gives you an insight into the world of The Ritz -Carlton and helps you understand via marketing fundamentals why designing and managing services are of utmost importance.
Study about Lemon Tree budget hotels , comparing with ginger hotels, fortune , courtyard marriott etc. Identify the current business strategy , current problems and limitations and suggest future marketing strategies for the hotel
Superior service providers consciously strive to create a memorable customer experience by nurturing a culture for 'serving' . They go beyond efficient and effective service design to bring spirituality in service .Superior service delivery requires managing customer expectations and incorporating self service technologies .Customers' expectations play a crucial role in this .
This case study is an example of designing and managing services .
1.The Ritz-Carlton Understands the Value of Every Employee. If you’ve ever held a job where you didn’t feel appreciated, you understand how frustrating it can be. Heck, you probably didn’t care about the company, right? Well, the Ritz-Carlton avoids this pitfall by valuing every employee. By empowering the employee, the hotel creates a staff that is passionate about the hotel, its services, and its success. Furthermore, happier employees mean happier guests. In fact, the Ritz-Carlton has empowered employees so much that they have the ability to spend up to $2,000 to ensure guests have an enjoyable stay without seeking permission from management.
2.The Ritz-Carlton Defines its Brand. If you want to improve the public image of your brand, then what better way is there to do so than by defining it yourself? The Ritz-Carlton does this by telling stories about the hotel through its online content strategy. Their Stories that Stay with You page elaborates on ways in which their employees and the greater hotel have gone out of their way to ensure a great stay for guests. The Ritz-Carlton is excellent at not only framing their stories, but in behaving in such a way – providing great customer service at every level – that great stories happen.
3.The Ritz-Carlton Abides By its Standards. Forget unwritten rules or laws. The Ritz has 12 Service Values that are etched into every employee’s memory. By requiring that everyone on the payroll memorize the company’s golden standards, the Ritz showcases the fact that they are genuinely passionate about their standards and commitment to customer service. Likewise, be sure to establish internal and external standards for your brand and hold your entire team accountable to them to ensure an incredible customer experience!
For over a century, the Ritz-Carlton Hotel has defined itself as the standard for quality and luxury in the hotel industry. While the ritzy Ritz-Carlton is flush with grandiose chandeliers and staircases, it’s the customer service and brand differentiation that’s given the hotel its staying power. By implementing pizazz into your marketing strategy, you’ll give your business a more powerful presence in the real context of B2B relations.
As there long coveted IPO is around the corner, I felt this was the proper time to release this analysis. Airbnb is a company that I’ve been fascinated by for quite some time. Their ability to reverse engineer and push through market resistance is undeniable. Airbnb has revolutionized our viewpoint on hotel and lodging. This analysis will evaluate the company's long-standing history and the barriers of entry endured. I believe it is important to understand the pure resilience of these founders. This analysis will also dissect their current performance as they recently reported an astounding $2.6 billion in revenue, bringing home $93 million in profit. These metrics blew away all internal forecasts which landed them a $31 billion-dollar valuation in May. Additionally, Airbnb is a private company making key performance indicators difficult to determine. As a result, I exhibit the factors I believe were used in evaluating Airbnb’s valuation. This report will discuss micro-level and macro-environmental factors that help and inhibit Airbnb. All of these subsidiaries have impactful effects on Airbnb and its outlook moving forward. Lastly, I discuss the effects of an economic disaster, and the problems it will cause when it happens. I also provide solutions that I believe would be extremely effective in a state of turmoil.
Indian hotel industry competetion and benchmarkingAnmol Sharma
The document contains analysis of the Indian hotel industry from all the major aspects. Comparison between 3 major Indian hotel chains show the level of competition and the benchmarks that are set by them to maintain their strategic advantage.
Based on case study of Accor Hotels. It will provide you brief introduction of all category of brands and services as well as history and origin of the Accor Hotels.
Marriott International, Inc. is an American diversified hospitality company that manages and franchises a broad portfolio of hotels and related lodging facilities. Founded by J. Willard Marriott, the company is now led by President and Chief Executive Officer Arne Sorenson. Today, Marriott International has more than 3,800 properties in over 74 countries and territories around the world.
How to be better than your competition, beat your competition & know what's going on in your market.
Strategies & Tips to increase your business in a large market.
The business model of the leading sharing economy platforms like Airbnb and Uberpetermoricz
Conference paper, presented at the Sharing economy conference of the "Digital Welfare Program" run by the Cabinet Office of the Prime Minister of Hungary, Conference held at BME in Budapest, on 11th of November, 2016. Peter Moricz is associate professor at the Research Centre of Information Resources Management, Corvinus University of Budapest.
Superior service providers consciously strive to create a memorable customer experience by nurturing a culture for 'serving' . They go beyond efficient and effective service design to bring spirituality in service .Superior service delivery requires managing customer expectations and incorporating self service technologies .Customers' expectations play a crucial role in this .
This case study is an example of designing and managing services .
1.The Ritz-Carlton Understands the Value of Every Employee. If you’ve ever held a job where you didn’t feel appreciated, you understand how frustrating it can be. Heck, you probably didn’t care about the company, right? Well, the Ritz-Carlton avoids this pitfall by valuing every employee. By empowering the employee, the hotel creates a staff that is passionate about the hotel, its services, and its success. Furthermore, happier employees mean happier guests. In fact, the Ritz-Carlton has empowered employees so much that they have the ability to spend up to $2,000 to ensure guests have an enjoyable stay without seeking permission from management.
2.The Ritz-Carlton Defines its Brand. If you want to improve the public image of your brand, then what better way is there to do so than by defining it yourself? The Ritz-Carlton does this by telling stories about the hotel through its online content strategy. Their Stories that Stay with You page elaborates on ways in which their employees and the greater hotel have gone out of their way to ensure a great stay for guests. The Ritz-Carlton is excellent at not only framing their stories, but in behaving in such a way – providing great customer service at every level – that great stories happen.
3.The Ritz-Carlton Abides By its Standards. Forget unwritten rules or laws. The Ritz has 12 Service Values that are etched into every employee’s memory. By requiring that everyone on the payroll memorize the company’s golden standards, the Ritz showcases the fact that they are genuinely passionate about their standards and commitment to customer service. Likewise, be sure to establish internal and external standards for your brand and hold your entire team accountable to them to ensure an incredible customer experience!
For over a century, the Ritz-Carlton Hotel has defined itself as the standard for quality and luxury in the hotel industry. While the ritzy Ritz-Carlton is flush with grandiose chandeliers and staircases, it’s the customer service and brand differentiation that’s given the hotel its staying power. By implementing pizazz into your marketing strategy, you’ll give your business a more powerful presence in the real context of B2B relations.
As there long coveted IPO is around the corner, I felt this was the proper time to release this analysis. Airbnb is a company that I’ve been fascinated by for quite some time. Their ability to reverse engineer and push through market resistance is undeniable. Airbnb has revolutionized our viewpoint on hotel and lodging. This analysis will evaluate the company's long-standing history and the barriers of entry endured. I believe it is important to understand the pure resilience of these founders. This analysis will also dissect their current performance as they recently reported an astounding $2.6 billion in revenue, bringing home $93 million in profit. These metrics blew away all internal forecasts which landed them a $31 billion-dollar valuation in May. Additionally, Airbnb is a private company making key performance indicators difficult to determine. As a result, I exhibit the factors I believe were used in evaluating Airbnb’s valuation. This report will discuss micro-level and macro-environmental factors that help and inhibit Airbnb. All of these subsidiaries have impactful effects on Airbnb and its outlook moving forward. Lastly, I discuss the effects of an economic disaster, and the problems it will cause when it happens. I also provide solutions that I believe would be extremely effective in a state of turmoil.
Indian hotel industry competetion and benchmarkingAnmol Sharma
The document contains analysis of the Indian hotel industry from all the major aspects. Comparison between 3 major Indian hotel chains show the level of competition and the benchmarks that are set by them to maintain their strategic advantage.
Based on case study of Accor Hotels. It will provide you brief introduction of all category of brands and services as well as history and origin of the Accor Hotels.
Marriott International, Inc. is an American diversified hospitality company that manages and franchises a broad portfolio of hotels and related lodging facilities. Founded by J. Willard Marriott, the company is now led by President and Chief Executive Officer Arne Sorenson. Today, Marriott International has more than 3,800 properties in over 74 countries and territories around the world.
How to be better than your competition, beat your competition & know what's going on in your market.
Strategies & Tips to increase your business in a large market.
The business model of the leading sharing economy platforms like Airbnb and Uberpetermoricz
Conference paper, presented at the Sharing economy conference of the "Digital Welfare Program" run by the Cabinet Office of the Prime Minister of Hungary, Conference held at BME in Budapest, on 11th of November, 2016. Peter Moricz is associate professor at the Research Centre of Information Resources Management, Corvinus University of Budapest.
The evolution of the Dubai hotel sector 19 01 15PCFC Hotels
Presentation prepared for senior Pandox staff about the evolution of the Dubai hotel market, from the first hotel in the 1950s to the latest pipeline of lifestyle and 'mega' hotels due to open in time for Expo 2020. Includes background on the economic strength, superb infrastructure and other factors that have spurred the phenomenal growth in the sector. Amazing photos!
International Standard Hotel (Grand Hyatt Dubai, The Legian Bali)Dythia Mustika
the description about the both hotels that have five star as the International Standard Hotel. the 2 hotel that i choose are Grand Hyatt Hotel in Dubai and The Legian Hotel in Bali, Indonesia. the complete of the services and facilities and also the types of the rooms are shown in this slide.
Airbnb - Business analysis based on Porter 5 Forces David Morand
An analysis of Airbnb is conducted based on Porter 5 forces scheme. We developed a review of the forces influencing hotels and lodging industry. In a second phase we see how IT is influencing this forces and can be turn to advantages. Finally we define Airbnb business model and conduct a SWOT analysis.
Presentation covered :
1. Introduction
2. SWOT Analysis
3.Strategic Planning Process
4.Structure of the Organization
5.Control Mechanism
6.Leadership Style that I observed
7.Various strategies which incorporate in order to get listed in the list of best places to work.
Buoyed by signs of global economic recovery and optimistic growth forecasts in developing economies, hotel chains will continue their rapid expansion in the coming decade. At the same time, intense competition in key guest segments, ever-increasing guest expectations and more diverse traveler needs will apply
pressure to keep room rates down. To maintain profit margins, hoteliers will need to renew emphasis on cost reduction and break through the consumer perception of
commoditization. Paradoxically, it is standardization that will pave the way not only to control costs, but also to provide the differentiated customer experience guests crave.
The 2015 Smart Decision Guide to Hospitality Revenue Management [Chapter 1]Starfleet Media
This Smart Decision Guide is intended for decision makers, including hotel and resort operators, property managers and owners, who are looking to bring the science of next-generation Hospitality Revenue Management to their businesses. Here they will find a roadmap for getting started on the path toward increased hotel revenue and profitability. The key takeaways include actionable insights for evaluating and selecting the right consulting and/or technology partners as well as for putting the right organizational resources, business processes and performance metrics in place to maximize return on investment.
The right choice of Revenue Management System
How to generate yields and occupancy.
How to manage group displacement in Hotel Bookings
La scelta del software di Revenue Management
tart your career in digital marketing with our guide. Digital marketing consist of many different fields like SEO, Google Ads, Social Media, Email Marketing to choose.
Sharpen existing tools or get a new toolbox? Contemporary cluster initiatives...Orkestra
UIIN Conference, Madrid, 27-29 May 2024
James Wilson, Orkestra and Deusto Business School
Emily Wise, Lund University
Madeline Smith, The Glasgow School of Art
0x01 - Newton's Third Law: Static vs. Dynamic AbusersOWASP Beja
f you offer a service on the web, odds are that someone will abuse it. Be it an API, a SaaS, a PaaS, or even a static website, someone somewhere will try to figure out a way to use it to their own needs. In this talk we'll compare measures that are effective against static attackers and how to battle a dynamic attacker who adapts to your counter-measures.
About the Speaker
===============
Diogo Sousa, Engineering Manager @ Canonical
An opinionated individual with an interest in cryptography and its intersection with secure software development.
Have you ever wondered how search works while visiting an e-commerce site, internal website, or searching through other types of online resources? Look no further than this informative session on the ways that taxonomies help end-users navigate the internet! Hear from taxonomists and other information professionals who have first-hand experience creating and working with taxonomies that aid in navigation, search, and discovery across a range of disciplines.
This presentation by Morris Kleiner (University of Minnesota), was made during the discussion “Competition and Regulation in Professions and Occupations” held at the Working Party No. 2 on Competition and Regulation on 10 June 2024. More papers and presentations on the topic can be found out at oe.cd/crps.
This presentation was uploaded with the author’s consent.
Acorn Recovery: Restore IT infra within minutesIP ServerOne
Introducing Acorn Recovery as a Service, a simple, fast, and secure managed disaster recovery (DRaaS) by IP ServerOne. A DR solution that helps restore your IT infra within minutes.
Analysis of hotel industry in porter's five competitive forces
1. ANALYSIS OF HOTEL INDUSTRY
IN PORTER’S FIVE COMPETITIVE FORCES
Submitted By-
Krati Chouhan
Section- A 1061
BBA LLB(Hons.)
III Semester
2. SYNOPSIS
This presentation is going to discuss the strengths and weaknesses of the
Hotel Industry on a global basis and to study the viability of a hotel project,
taking into account the five competitive forces of Michael Porter’s Model.
The main competitive forces and factors within those forces will determine
the feasibility and potential profitability in a hotel project. The two crucial
factors that enable hotels to differentiate themselves are good location for
relative target market and quality of service.
3. INTRODUCTION
Industry can be defined as a group of companies producing products and
services that satisfy a need, function and use. Industry can be broadly defined
as a group of companies producing products and services that satisfy a need,
function and use. It can be narrowly defined as a group of companies
producing products and services which are close substitutes for each other.
Business strategy can be defined as an integrated set of acts aimed at
securing a sustainable competitive advantage over competitors. The Five
Competitive Forces of Industry will influence prices, costs and investment
(Porter, 1980). The feasibility and potential profitability of a hotel can be
determined by answering the following questions.
4. INDUSTRY OVERVIEW
Tourism in India is the largest service industry, with a contribution of 6.23%
to the national GDP and 8.78% of the total employment in India. Visiting
foreigners has reached a record 3.92 million and consequently International
Tourism receipts have also risen to US $ 5.7 billion. The World Travel and
Tourism Council (WTTC) have named India along with China as one of the
fastest growing tourism industries for the next 10 to 15 years. The Indian
hospitality sector is expected to show a healthy growth and according to the
Ministry of Tourism, the contribution of tourism to India's GDP is 5.9 per
cent as compared to worldwide average of 11 percent.
5.
6. ADR = Average Daily Rate; Rev PAR = Revenue per available room
= Average Daily Rate*Occupancy
7. THE KEYS TO PROFITABILITY IN
THE INDUSTRY
What are the main competitive forces and factors within those forces which
determine potential profitability in the industry? The Hotel Industry in most
metropolitan cities in the world is characterized by high capital costs and a high
proportion of fixed costs to total costs. The high capital costs require that from
the outset the project must be managed to achieve the most cost-effective use of
resources applied to construction, furnishing and equipment, pre-operational
expenses and finance. Hotels also been built to an optimum size, approximately
500 rooms, in order to benefit from the economies of scale. Hotels must also aim
to fill their rooms as profitably as possible, both through room occupancy levels
and the relative tariffs applied.
8. TWO KEY METRICS USED TO
ANALYZE THE HOTEL INDUSTRY ARE
AS FOLLOWS:
Average occupancy: The average percentage of the times in a year when the
room is occupied. This number usually fluctuates as the hotel industry is highly
cyclical with high demand for rooms when tourist influx is high.
Average room rate: Average rate charged per night per room. This number can
also fluctuate with demand.
9. FOUR OWNERSHIP MODELS IN
THE HOTEL INDUSTRY
Full Ownership: This type of ownership warrants huge capital allocation and the owner
undertakes higher risk. It also gives the owner full control over pricing, operating expenses
and business decisions.
Management Contract: Under this form, certain individuals called as operators run the
hotel and receive remuneration directly from the owner as a percentage of sales, around 2-3%,
and an incentive fee, around 8-9% of operating profit.
Franchise: In this case, franchisors license their brands, thereby giving the hotel owner to
use the brand and reserve rooms. The franchisees need to comply with certain conditions and
standards stipulated by the franchisors and are subjected to checks. Franchisees pay fees in the
form of an initial fee plus a royalty.
Lease and License: Here, the owner of the property leases it for a definite duration. The
lease rental is deducted from the gross revenue and a penalty is imposed if the agreement is
not adhered to. Also, the licensor earns revenue in the form of a license fee and the revenue
earned is given to the operator.
10. PORTER’S FIVE FORCES MODEL WITH
RESPECT TO HOTEL INDUSTRY
THREAT OF NEW ENTRANTS
- International competitors entering
new attractive domestic market.
- Emergence of new entrepreneurial
players.
INTENSITY OF
COMPETITIVE
RIVALRY
- Number of
Competitors
- Ratio demand/
capacity
- Industry profitability
- Personality of CEO
BARGAINING
POWER OF
CUSTOMERS
- Dependency on key
accounts and
intermediates who
provide volume
business and
negotiate lower
prices.
THREAT OF SUBSTITUTE
PRODUCTS
- Changes in technology which after
demand for accommodation
- Video-conferencing
BARGAINING
POWER OF
SUPPLIERS
- Availability of
skilled employers and
management.
- Availability of
finance for hospitality
projects
- Competitiveness of:
-Food & beverage
suppliers
- Energy & utilities
- Ancillary Services
11. NEW ENTRANTS
The hotels & motels industry is strongly influenced by travel and tourism trends.
It is possible to enter the industry in a relatively low-key way by opening a
small, independent hotel or motel as a sole proprietor. However, the industry is
capital intensive, and for a large-scale entrance, upfront investment in buildings,
décor and furnishings, ICT infrastructure and staff is expensive. To sustain
revenue growth in the premium market, operating a chain of hotels is often an
important strategy as it reduces dependence on tourism in any particular
location. Regulations in terms of real estate and buying abroad need to be taken
into consideration and can therefore be restrictive in some countries. The
purchase, leasing, and management of property may involve legal and financial
complexities, necessitating spending on professional services. Overall, the
likelihood of new entrants is moderate.
12.
13. THREAT OF SUBSTITUTES
Porter indicated that substitute products can be existing or potential products and services
which are able to perform the same function. Substitute products can reduce costs, and/or
provide better quality performance and better value which very often the result of
technological innovation.
The Hotel Industry in all major cities is not threatened by substitute products except that in
times of recession domestic travel might replace international or overseas travel and certain
destinations replace more expensive ones on cost grounds.
A hotel operator in anywhere can compete on a low cost basis in a niche segment. It can also
compete on the basis of a modern, comfortable but not luxurious hotel situated in a popular
and convenient location.
There is no major threat of substitute products specific to a hotel’s product and service. A hotel
will be subject to powerful buyers only if its marketing strategy concentrates on attracting tour
groups, provided no oversupply for the hotel’s target market develops.A hotel may not appear
to be particularly vulnerable to intense rivalry because of the fragmented nature of the
competition in its strategic group and the potential growth rate of its target market.
14.
15. SUPPLIER POWER
Suppliers in this industry are defined as property owners, developers and real
estate companies, interior design and furnishing companies, architects,
management and training service providers, marketing companies, industry
consultants, and information and computer technology (ICT) manufacturers. Real
estate companies are often much smaller companies than hotel and motel
operators and rather than being globalized, they are usually local to the property
they develop, which reduces their financial muscle and ability to negotiate
favorable contracts. Furthermore, hotels can integrate backwards and operate
their own real estate business. The quality and availability of supplier services
and equipment is essential to the hotel and motel industry. The industry is also
labor intensive. Staff costs are significant as success in the hotel industry is
strongly influenced by the quality of the service provided. Supplier power is
assessed as moderate overall.
16.
17. BUYER POWER
Unlike its international counterparts, the Indian industry was not affected by a
decline recently and so may emerge from the global recession period stronger.
Within the hotels and motels industry, where switching costs are rather
negligible and competing on price alone is no longer a key to success, brand
recognition and innovation helps to attract first-time customers and also
repeat business. Due to a high reliance on sophisticated technology and
systems and the growing importance of mobile communication channels,
some suppliers may exert strong supplier power.
18.
19. RIVALRY
There are also a large number of independent players present in the industry
apart from the existing houses. Larger number of players means increased
competition. Many larger operators have diversified to some extent and own
additional businesses, such as casinos, restaurants and shops. To attract and
sustain more business, operators try to offer more and more complex packages
and value-added services, such as free breakfast and parking, free third night,
etc. A recent trend among major hotel chains is lifestyle hotels whic cater to the
conscientious traveler's demands for eco-friendly practices, social responsibility,
and affordable style. The largest hotel and motel operators are fairly well
insulated from unpredictable market conditions by geographical diversification.
However, others are based largely or exclusively in one country.
20.
21. HOTEL’S COMPETITIVE ADVANTAGE
AND COMPETITIVE POSITION
Competition in the Hotel Industry anywhere in the world is intense within strategic groups subject to the level of
industry growth. Industry growth in major cities, capitals or financial centers is high at present partly due to the
travelers from tourist groups, business and independent leisure travelers, resulting in low levels of jockeying.
Competitive position involves Cost and Differentiation. There are no switching costs, which could increase
potential jockeying. Product differentiation can be high ranging from budget hotels to deluxe hotels. Hotel
operators wish to exploit to establish customer loyalty, image and differentiation. Fixed costs are high in the
industry and consequently high room occupancy rates are critical. Competition would, therefore, be very fierce in
a situation of oversupply of hotel rooms. Capacity is augmented in large increments in recent years due to some
major international events such as Olympia Games, Expo or World Cup. Competitors’ reaction is expected to be
fragmented, haphazard and insignificant, especially as the common market is forecast to be one of the more
buoyant segments among total arrivals in the coming future. The key issue remains that whether there are any
further sites in the immediate vicinity of any big cities which may be purchased by other business groups
commanding similar capital resources to any hotel operator which will pose significant potential future
competition.
22. OTHER MAJOR INCOME
STREAMS FOR HOTEL
OPERATORS
Food and Beverage - It attracts considerate non-hotel resident business
including banquet facilities. By world standards, F&B income is a very large
component of the total hotel income in the Hotel Industry as a whole.
Exhibitions and Conventions - It can provide steady rental and service income
for any hotel.
Entertainment - Cinemas, Concerts and Business Function Room Facilities are
likely to receive heavy patronage.
Commercial and Shopping Complex - The shopping space with retail shops
selling luxury merchandises can provide recurrent rental income.
Neon-Signage - It can be planned which will further diversify income.
Car-parking Service – It also can be another major income source.
23. HOTEL’S BUSINESS STRATEGY
If jockeying for position in a higher strategic group became more intense in a
position of oversupply, hotels might be diverted to another segment of the
market, forcing hotels to cut margins unless it has established sufficient
differentiation to maintain its own position within its strategic group.
The Hotel Industry in any major cities in the world contains very high exit
barriers. Once in, it is very difficult to get out. There is considerable diversity in
the strategy and aims of companies owning hotels.
There is considerable diversity in the strategy and aims of companies owning
hotels.
The corporate structure of the company holding the hotel can be designed from
the tax planning angle with a view to being able to sell this development at much
reduced rates of stamp duty and legal expenses.
24. CONCLUSION
The two crucial factors that enable hotels to differentiate themselves:
1. Good location for relative target market, and
2. Quality of service.
The Hotel Industry can provide considerable opportunity to cross-sell profitable
products such as Food and Beverage, Entertainment or Exhibitions and Conventions
services.
Tariffs are then determined according to the level of differentiation achieved through
location, management, staff and guest ratios and any other miscellaneous factors such
as quality of architecture, decoration, furniture and fittings, layout or interior design.
In the event of a downturn in the world’s economic cycle the hotel’s target market
should be more durable than the tourist market because of the different forces and
motives driving tourism.