1. The hotel industry in Milan intends to serve business travelers (41% of customers) and those attending trade fairs (31% total), as well as individual leisure travelers (15%) and groups (5%). Tourism in Milan is increasing, especially on weekends. 2. The Milan hotel industry has over 975 hotels employing over 16,000 workers. Occupancy rates were 61.4% in 2013 with an average daily room rate of 130.99 euros. Revenue per available room was 80.45 euros. 3. There are three main business models for hotels in Milan - local independent hotels focused on efficiency, hotel collections allowing different target markets, and large hotel chains providing standardized products under well-known brand

1. BUSINESS STRATEGY
Federica Elena Ratti di Desio Levi
Natalia Sergeevna Popova
Vanessa Bocchi
Matteo Maione

2. 1) The client market the firms in
the industry intend to serve
• Milan had 10 milions tourists in 2013 with an
increase of international arrivals of the 15% from
2009 to 2013
Russia
114.188
19,8%
France
87.314
U.S.A
86.399
0,38% 0,45%

3. Commercial Mix
The commercial mix of Milan is composed:
• Primarily of Business (41%) and Fair (31%), for a total of 72%.
• Leisure customers individual is equal to 15%
• Groups represents a more modest 5%.
• The segment is represented by the less developed Congress, which originates only 4%
•Leisure is increasing specially during weekends (+7,2% more than 2012)
Camera di Commercio Milano

4. Rate variation 2012-2013
Camera di Commercio Milano

5. 2) The characteristics and
long-term profitability of the
industry
• Milan hotel industry has 975 hotels
• 16068 workers -43% from 2012
Occupancy
61,4%
ADR
130,99
RevPar
80,45

6. 7%
4,3%
-7%
3,6%
-4,9%
5,4%
-8%
-6%
-4%
-2%
0%
2%
4%
6%
8%
Center Central
Station
Rho Fiera Fiera City Linate North Milan
RevPar var. 2012-2013

7. RevPar Milan
Camera di Commercio Milano

8. What about the Future?
• 20 mln tourists 6 mln
international
• +10% revenues
• Increasing of cultural tourim
• Reduction of seasonability

9. 3)The strategic groups which
can be identified in the industry

10. Business Model 1 – Local Independent Hotel
Milan remains the stalwart of independent small hotels
(usually 3*)
Locals Hotels are distinguished by a management and
operating philosophy focused on maximum efficiency and
flexibility and they will have a strong competitive advantage
over its national competitors (with the types of market
segments solicited)
These efforts have made it possible to reduce decision-making
times, take prompt advantage of new business opportunities,
optimize operating processes and achieve a highly flexible cost
structure, which can minimizes the business risks.

11. Every hotel is unique and appears as a “pearl” in collection.
Every hotel has got same features such as quality standards,
service level and comfort. Mostly luxury hotels are using this
business model. As a rule these hotels will be owned by Hotel
Company. Such a hotel chain assumes a high level in
management decentralization.
This practice helps to create uniqueness, individuality of the
hotel and close connections with strategic partners and repeat
guests.
The main advantage of «hotel collection» is that this business
model allows hotel to target different target markets with
different preferences.
Business Model 2 – Hotel Collection

12. Business Model 3 – Hotel Chain
Is the chain created from the similar units which producing
and selling standard design hotel product and managed by
franchising or management contract.
With requirement of identical properties, traditional hotel
chains will try to build their own hotel with developer
companies.
For example, we can find in Milan Hilton, Marriott, Four
Seasons, Sheraton. This Model Conception is the tendency to
maximize unification and standardization of hotel chain.

13. 3) Strategy adopted by Armani
Hotel
Armani Hotel
Competitors number of segments
two
geographic scope vertical integration
medium
global local one
number of segments

14. High
competitiveness
Buyers
Substitutes
Suppliers
Potential
Entrants
Michael Porter 5 forces analysis

15. • Luxury
• Individual
• Focus on small segment of buyers
Strategy: focus differentiation
leadership
The company’s vision is to become the ultimate
hotel management company, with a passion for
excellence and innovation, honouring the
individuality and heritage of its hotel.