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International Hospitality and Tourism Management Assignment
Background of the International hotel industry and tourism
Hospitality is one of the vibrant industries which are continuously changing due to several internal and external issues. The hospitality industry is becoming competitive day by day. Some hospitality businesses are doing well whereas some faces challenges due to the local and international competitors. International travel is driving growth in the hospitality industry. Globalization has changed the hospitality and tourism industry. The hotel and tourism industry has become a million dollar business communication nowadays around the world (Lee, Nguyen, Lee, Chua and Han, 2017). The hotel and tourism industry depends on the disposable income as well as leisure time issues.
The hospitality management is basically the study of the hospitality industry. This report includes the background of the Marriott Hotel West India Quay. The SWOT analysis is conducted of the hotel. Further, the background to the global hotel and tourism industry is discussed. The report also defines the background of the emerging market. The pest analysis of the developing market is discussed. Finally, the growth options such as Porters’ generic strategies, Ansoff's matrix and Nykiel’s fourteen are examined to pursue in the emerging market.
Background of the Hotel
The Marriott Hotel West India Quay is a hotel in London, England. It was set-up in 2004 and operated under the Marriott Hotels group. The hotel has 301 rooms and 47 apartments. It is one of the top pick hotels of the London. This 5-star hotel contains luxury rooms and a fitness suite. The hotel has excellent transport connections. It is easily accessible to the London City Airport and O2 arena. The property of the hotel is also rated as the best value in London. Each room in the hotel has 42 inches LED TV along with the deluxe beds and the relaxed seating area. The twenty four hour room service is available in the hotel and there are USB outlets in the rooms. The guests can relax at the G & Tea lounge which offers a wide range of cocktails, tea, snacks and full meals. The Marriott health club also includes fitness facilities comprising a fully equipped gym and relaxing sauna (Law, Leung, Lo, Leung and Fong, 2015). Wi-Fi can be accessed in the rooms and the public areas. It provides the best services for both business and leisure travellers.
The current and future performance of the Marriott Hotel West India can be evaluated with the help of SWOT analysis. It is the best to approach to estimate the strength, weaknesses, opportunities and threats.
The Marriott Hotel West India Quay has a decent brand image in the market as it is a part of the Marriott group. The Marriott group is a well-established entity. The Marriott hotel can easily take the position in the local market. The Marriott Hotel West India Quay has turn out to be popular and famed by its targeted customers (Law, Buhalis and Cobanoglu, 2014). The hotel has an effective and efficient internal control system. It conducts its operations with the help of the dynamic management skills and forceful style of the leadership. The positive reputation of the hotel helps itself to fulfil the needs of the customers and keeps them satisfied.
The management of the Marriott Hotel West India is not able to focus as a low-cost lifestyle brand. The hotel works and focuses more on the business class customers and the middle-class customers are totally ignored. It makes hotel to work with the limited number of customers and operate in the small market size. It has also seen in some of the cases where the hotel was not able to fulfil the needs and demands of the existing customers (Law, Buhalis and Cobanoglu, 2014).
It has been evaluated that Marriott operates its business in over seventy-three countries. This way Marriott Hotel West India Quay can operate in remaining countries of the world. It is easy for the hotel to create brand awareness and build customer loyalty. The hotel can increase its revenue and attain the opportunity of the business growth. It can conduct its activities by making use of the sustainable development and the eco-friendly policies. These opportunities are helpful to the hotel to enhancing its business. Various tourist locations can considerably increase the opportunities for the hotel to enhance business (Köseoglu, Sehitoglu and Craft, 2015). The international tourists also bring the opportunity for the further expansion.
The threat of terrorism and political variability in the nations create a big risk for the Marriott Hotel West India Quay. On the other side, the local and the universal competitors have become a distressing issue for the hotel. Some of the existing and the potential market competitors are Hilton hotel, Starwood hotel and many other (Leonidou, Leonidou, Fotiadis and Aykol, 2015).
Background to Global hotel and tourism industry
The hotel and tourism industry is one of the world’s major industries. The global hospitality composites the lodging, food attractions, cultural and travel industries. The hospitality sector needs to be properly understood the customer's segment and is required to stay relevant to them (Mohammed, Guillet, and Law, 2015). There is a great opportunity for the hotels to create a unique experience for the travellers. It keeps hotels to strive in the market and keeps growing.
The tourism industry experiences stable growth every year. The intercontinental tourist advents have increased from 528 million in 2005 to 1.19 billion in 2015. The demands of the countries like Russia, China, India and Brazil have risen. It is required to identify the unfulfilled demand needs before launching a hotel brand in any country. The successful brands are required to instil their unique values in every aspect of the customer’s stay (King, 2017).
Background to the emerging markets
Marriott Hotel West India Quay can select the location of Mumbai in India for the diversification of the business. It is the appropriate place to capitalize in the Marriott hotel. It is the most inhabited city (18.5 million) in India. It is the only city which generates 6.16% of the total GDP of India. Mumbai accounts for the 40% international trade of India. On the other side, the Mumbai port is the most significant and one of the oldest ports of India. It is also the fastest city in India for the business start-ups. The city also has a lot of beautiful places which attracts a large number of tourists. It sits eh appropriate for the Marriott to make an investment in Mumbai due to the population issues, transportation facilities and economic growth issues. It has become the emergent market in the world (Altin, Koseoglu, Yu and Riasi, 2018). The investors see a lot of opportunities to invest in the emergent market along with bearing risks. The risk comprises the competition from the local and the international competitors. It is also considered that the investors feel the huge opportunity to expand business in the emerging economies. After considering both market condition and the opportunity it can be said that the investment in the Mumbai will be the appropriate decision of the Marriott hotel.
PEST analysis of the selected emerging market
The short-term growth and opportunity issues should be considered by the Marriott hotel to make a decision of investment in Mumbai. The investment hotel considers both internal and external issues. The PEST analysis of Mumbai is given below:
The political factors have become concerning issue for the investment of hotel in Mumbai. The government of India works for the betterment of the tourism and hotel industry (Kandampully, Zhang and Jaakkola, 2018). For the expansion of the tourism and hotel industry, the government focuses on the infrastructure policy, open sky policy, the transformation of airports, development of the tourist destinations, funds for the recreational activities and more. The government also considers the foreign investment issues. It also provides five years holiday facilities in order to promote and make an investment in the hotels. The ministry of the external affairs in India has executed a visa for the several countries to encourage the tourism industry (Aragon-Correa, Martin-Tapia and de la Torre-Ruiz, 2015). The ministry of home affairs also grants long-term tourist visa of five years duration. Marriott can have all these benefits if it invests in Mumbai as it is more politically stable also.
Only Mumbai accounts to generate 6.16% of the total GDP of India and has become an economic hub. 40% of the international trade also takes place in Mumbai. So there is a huge demand for hotels in Mumbai. The regional government also encourages FDI and institutional foreign investment. The Indian text structure has also become high (Andreu, Claver and Quer, 2017). It is the appropriate place for the Marriott hotel to make an investment in Mumbai and it can fulfil the demand of the people of business and travel class.
The customers spend a lot of money on the recreational activities due to the significant incomes. Although, the pricing issue has become a sensitive issue for the local customers. For instance, Marriott hotel thinks of the religious issues before making an investment in Mumbai. The religious issues are very sensitive in Mumbai for the hotel business (Kandampully, Zhang and Bilgihan, 2015). Hindus and Muslims spiritual attitudes towards beef and pork should be considered for the foreign tourists and business class people. The environmental pollution and carbon emission have become concerning issue to run a business in India.
Marriott has a strong reputation for resolving the IT solution department. There are also traditional as well as modern approaches for the technology. Marriott hotel can invest in Mumbai and can get all the technical support for the adoption of the advanced technology. The city seems to have a lot of technical experts (J. Harrington, Chathoth, Ottenbacher and Altinay, 2014).
SWOT and PEST analysis
The Marriott Hotel West India Quay having a reputable image in the market. It is a part of the well-established chain that is the Marriott group. The brand entity is helpful to the hotel to set up at any place. If it is talked about weakness than Marriott is not able to focus as a low-cost lifestyle brand but its focus to higher and business level class appropriately. It can make better use of the differentiation strategy in order to retain customers of the higher society. Marriott has always an opportunity to expand itself in the countries where it has not opened. The tourist attractions have more opportunities for the hotel (Gursoy and Sandstrom, 2016). The threat can be faced by Marriott from the local and international competitors.
The political factors are concerning for Marriott. The government of India provides assistance to the tourism and hotel industry in the form of funds and tax related. The economic demand and supply factors are quite favourable for the Marriott as there is a huge demand for hotels in Mumbai. 40% of the international trades also take place in Mumbai (Brown, Arendt and Bosselman, 2014). The customers at Mumbai spend sufficient funds for the recreational activities. Their religious sentiments should be tackled appropriately by Marriott. There are sufficient technical experts in Mumbai which can work for the technical support. Marriott can maintain its strong image of resolving IT solutions (Rahimi and Gunlu, 2016).
Porters generic strategies, Ansoff's matrix and Nykiel’s fourteen hotel strategic growth options, these are the three strategies which can be employed by the Marriott. The hotel makes use of these strategies for the investment analysis. It evaluates the existing and potential competitive issues. The Porter’s generic strategy defines how a company chases competitive advantage across the targeted market. It includes three generic strategies, lower cost, differentiated or focus. A hotel can choose one or two competitive advantage. These strategies determine the direction of the organization. This strategy determines the profitability above or below the average of the industry (Gehrels and Suleri, 2016).
Ansoff's matrix is a tool of strategic planning to provide a framework to executives, senior managers for the future growth. It includes the growth strategies such as market penetration, market development, product development and diversification. This tool considers the way to grow through existing and the new products. The Nykiel’s fourteen hotel strategic growth options undertake the growth strategies such as assessing enhancement opportunities. The ownership interests in the hotels are prepared to encourage operators to create a sustainable income. It maximises the overall value of a hotel. The review branding and management is also a part of the strategic growth options. The physical evaluation plays a significant role in the long-term value prospects of a hotel (Chan and Hsu, 2016).
Justification of strategy
Marriott hotel is required to evaluate the existing and potential competitive issues for the purpose of investment analysis. For this purpose, the hotel is required to consider the buying power of consumers, suppliers, competitors, the threat of substitutes, the threat of new entrants of competitive environment analysis. The bargaining power of the consumers is the opportunity in buying down the price of the service. In the case of Marriott Hotel, the consumers have all the right to take the purchasing decisions. It occurs due to the local and global opponents in the Mumbai hotel industry. The management of the hotel can set the target customers comprising global tourist, world-class businessman in order to decrease the bargaining power of the customers. The switching cost will be moderate in the case of Marriott. The supplying purchasing influence will be low for the hotel in Mumbai as India has a lot of hotels like Leela, Radisson, ITC Grand Maratha can become a threat in the hotel industry (Deery and Jago, 2015). There is a moderate level of threat to the investment of hotel in Mumbai. It accomplishes the existing customers’ needs and expectations and reduces the risk to the management of the Marriott. The competitive pricing policy has an important role in reducing the threats. The management is more capable of fulfilling the needs and expectation of the customers than capable of reducing the risk. So, it is a moderate level of threat to the Marriott (Ruetzler, Baker, Reynolds, Taylor and Allen, 2014).
Marriott can apply Porter Generic model for the strategic implementation analysis. It works with the cost leadership issues, differentiation and cost strategy. All of these activities work how an organization can gain a competitive advantage. Marriott can effectively follow the strategy by implementing cost leadership issues, differentiation purposes and focus issues. The cost leadership strategy mainly stresses on the goods and services costing issues so it is required to ensure lowest cost policy. The prices issues have become penetrating between the existing and potential customers for the Marriott. In various cases, it I saw that the existing hotels in the Mumbai are unable to build long-term relationship with the existing customers due to the higher pricing policy (García-Lillo, Úbeda-García and Marco-Lajara, 2016). It can be effective for the Marriott applying lower pricing policy in order to attain the target of maximum sales. The service of the hotel can be differentiated in order to make it part of success. Marriott is required to identify its target customers before the implementation of the differentiation policy. The target customers are not concern about the pricing issues but they are concerned about the services. Differentiation has the capability of driving effectiveness when the prices of the products exceed the added expenses to take the hotel service. On the other side, Marriott can consider and follow the target market. It can offer lower and higher pricing strategy by certifying differentiated services. It should depend on the requirements of the selected segmental as well as the resources and capabilities of Marriott in Mumbai. The management of the hotel should be conscious of the existing and potential customer’s needs, income, expenditures, attitude, awareness and more (Gannon, Roper and Doherty, 2015).
Marriott can apply the Ansoff matrix model for the strategic implementation analysis. In this case, the management of the Marriott is required to analyse the market penetration strategy, market development strategy, product development policy and diversification strategy. The market penetration strategy deliberates the prevailing product within the prevailing market. In this scenario, Marriott can lower the risk due to the existing product within the existing market. Brand loyalty, brand awareness and special offers can be applied for this reason. This strategy is not applicable to Marriott as a new investment (Ryan, 2015). On the other side, the management of the organization can be in a situation to accept a market development strategy. This strategy considers the new market within an prevailing product. This strategy is more suitable for Marriott by making in the new market of Mumbai. Marriott hotel can expand its business in this situation by making an investment in Mumbai. This way, the hotel will be in a situation to focus on young as well as business people. Marriott can apply service development strategy for the active growth (Salman, Tawfik, Samy and Artal-Tur, 2017). In this case, the hotel can introduce free internet facility, bar facility, game service within the reputable market. This strategy is not suitable for the newly investment in Mumbai (Della Corte, 2016). On the other side, Marriott is in the situation to apply business diversification strategy. For the diversification purpose, the organization is required to consider both resident and non-resident customer package. It is quite a risk strategy for Marriott. But along with the risk, this strategy can generate a lot of financial as well as non-financial benefits in future and the customers can avail new service by the investment of Marriott. After considering all the strategies Marriott can apply market development strategy for its investment in Mumbai (García-Lillo, et al. 2018).
Practical application of strategy
After the consideration of the Porter generic model, it can be said that it will be the accurate strategic selection for Marriott. This strategy is helpful to the hotel in lowering assessing policy, differentiation strategy and niche marketing policy for the global tourist and business class people. Considering all these issues, the management of an entity can be applied to cost leadership strategy as well as price differentiation policy. However, the strategic implementation is a challenging task for the Marriott hotel. The currents structure, process and system should be considered for the strategic implementation of the management. The management of the hotel should be aware of the leadership style (Denizci Guillet and Mohammed, 2015).
By the implementation of Porter’s generic strategies, it is expected that Marriott will be able to gain strong position five or ten years ahead. Marriott will be able to gain competitive strategy by using differentiation strategy. Minimum costing policy can help Marriott to target a large number of customers and the customers are price sensitive. It can establish itself well in the populated city like Mumbai. Mumbai is the head office of the most companies. This way Marriott will be able to attain all the business class tourists in the coming years (Sigala, 2018).
International hospitality management is changing due to several internal as well as external threats. On the basis of the SWOT analysis of Marriott hotel can be said that it is capable of conducting operations in India. The PEST analysis of Mumbai also shows the positive aspects of the hospitality and tourism industry. It can be said that the investment in the Mumbai by Marriott hotel becomes the appropriate place. The analysis made above represents a great prospect to expand the Marriott hotel business in India. On the other side, the management of the Marriott follows the porter generic strategy to retain the market position as well as to gain a competitive advantage. This strategy can be helpful by Marriott to become the upcoming market leader in India.
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