Holiday Inn Hotel, UK - Case Study Example

 Holiday Inn Hotel, UK I. Introduction The rapid integration of the global markets into a single village brings about new sets of opportunities for various industries. Among those highly affected by globalization are the hospitality industries. Experts have anticipated and reported the upbeat performance of these sectors. BTI UK (2006) revealed that “the global hotel industry is enjoying a growth phase and showing signs of a strong performance recovery.” However, amidst the opportunities in the industry, it should also be noted that these changes are bringing in more challenges to the industry players. The changing business environment coupled with the changing customer behavior pressures companies to rethink or modify their strategies in order to deliver their intended customer value (Kotler 2002). This marketing report looks at the operation of Holiday Inn Hotel (Holiday Inn) in the United Kingdom. Holiday Inn is regarded by its parent company InterContinental Hotel Group as the “powerhouse” of its huge portfolio of hotel brands (Holiday Inn Fact Sheet 2008). Targeted to the business and leisure travelers, its prominence in a global scale is indicated by the 100 million guests that it provides service to every year. II. The External Environment Changes in the company’s business strategy are often dictated by the sprouting challenges and opportunities in its external environment. This section will look at the external environment of Holiday Inn through the use of the strategic management tool PESTEL analysis. The rationale of using PESTEL is attributed to its focus on the most important aspects in the business environment namely Political, Economic, Social, Technological, Environmental, and Legal (Kotler 2002). Political. The political environment in the United Kingdom has always been favorable for the hospitality industry. However, in 2006 the proposal for a bed tax in order to generate revenue for the government is seen to be detrimental to the tourism as well as the hospitality sector. The clamor from various groups had succeeded in barring the implementation of this proposal (Opodo 2007). Today, UK is seen to be attracting more tourists through programs like VisitBritain (Opodo 2008). Economic. The economic growth in UK has been subject to envy of the different nations. However, as the world is becoming more and more integrated it is expected that UK will also be adversely affected by the forecasted recession in economies like US. The Delloite Economic Review projects that the “UK economy is set to experience its weakest period of growth in 15 years and here is also a risk of recession in the next two years” (UK Economy 2008). The slowdown is attributed to the global financial crisis and associated credit crunch which also brings low consumer confidence and spending (UK Economy 2008). Social. The latest social trend publication of the National Statistics Office indicates that the UK citizens are enjoying an ever improving standard of living because of higher disposable income. Aside from focusing on the quality of the products that they buy and consume, people are also becoming more concerned on how socially responsible the companies which manufacture them (Social Trends 2008). Spending on leisure and recreation is also on the rise attributed to the increasing need of relaxation from the complexities of life. Thus, families are spending huge portions of their money for short vacations which are stress-free and on-stop to maximize the use of their time (Social Trends 2008). Technological. The internet is the single most influential technological development driving important changes in UK’s technological landscape. The internet had gained acceptance and popularity not only in business circles but also on households. With most families are getting access to this technological revolution, business organizations introduce online advertising and shopping (Social Trends 2008). Environmental. The UK has entered an era where all the sectors in the society are becoming more and more concerned on sustainable development. This is not only indicated by the clamor of non-profit organizations for more socially responsible operations but by the preference of customers in buying products from “green” companies. Even in the hospitality industry, players are finding ways on how to reduce the harm that they inflict on nature. Legal. Currently, there are no legal issues which are directly significant in the operation of the hospitality industry. However, the opening up of the airline industry which allows the entry of more competitors which can charge a lower cost for air travel is expected to bring in more tourists which can be served by hotel companies. III. Target Market Since its establishment until the late 2007, Holiday Inn has always been regarded as a “family hotel” which focuses only on leisure travelers. The company rethinks its strategy and in 2007 announced a re-branding strategy which will encompass the business travelers as new market for its product offerings (Holiday Inn Rebrands 2007). In recognition to the opportunity of serving the Generation X market, Holiday Inn also designs a whole new hotel concept in order to suit their lifestyle and identified preferences (Intercontinental Hotel Groups 2007). Families/Leisure Travelers. Family and leisure travelers comprise the largest market of Holiday Inn. With the rising disposable income and the increasing need for relaxation and recreation, this segment’s important is further emphasized. Business Travelers. The integration of the world economy and the move of business operations to pursue international operations require more business travel. This segment, however is currently dominated by Holiday Inn’s competitors like Hilton and Ritz Carlton which have long positioned themselves in this niche. Generation X. Holiday Inn identified this sector as one with the highest potential. Generation X customers are seen to be the most inclined in travels and are equipped with higher purchasing power. IV. Marketing Mix Product. Holiday Inn is a hotel chain which offers full-service to its customers with a luxurious and comfortable ambiance. In order to enhance the product that its offers, it re-launched its brand by focusing on four new elements namely: new logo and signage which features a “new typeface, more vibrant green color and a more contemporary design;” new arrival experience which includes “new landscaping features including simple, stylish plant pots and outdoor seating; de-cluttered reception areas with contemporary desk-top lamps and clean, stylish signature back walls” as well as “signature scents and music play list in the reception area;” refreshed guest room which allows guest to select pillows, signature shower curtain and elegant toiletry caddy; and new service promise to ensure quality service (IGH rolls out 2008). The product offered by Holiday Inn is most important in ensuring success in the hospitality industry. With its focus on changing the service that it provides, it also shows its commitment in evolving in order to meet the emerging needs of its target market. However, the company will yet to see the effects of these changes after the testing stage. Even though these efforts are concentrated in adding customer value, customers will still decide whether these new changes are in fact value adding. Promotion. The promotional activities of Holiday Inn encompass print media, television advertisements, and online advertising. Because of this wide range of media channels used by the company to promote its current and upcoming offerings, the Holiday Inn hotels have become one of the choices when making a decision of where to stay. Place. Holiday Inn recognizes the need of its diverse clientele through its choice of place. Its hotels are located at “small towns and major cities, along quiet roadways, and near bustling airports.” These convenient locations enable Holiday Inn to serve the need of a quiet sanctuary for leisure travelers and accessibility for business travelers. Price. The pricing strategy of Holiday Inn can be referred to as mid-range—not as high as what Ritz-Carlton charges and not as low as other competitors. The company holds true in its commitment of providing full-service at a reasonable price. This pricing strategy is beneficial as it captures a larger market yet it is quite detrimental to its image as an upscale hotel. V. Recommended Promotional Plan After conducting an internal and external analysis in the situation of Holiday Inn, this report recognizes that the biggest problem faced by the company is to identify whether its move of launching a new image and providing better service will be warmly accepted. In doing this, Holiday Inn should also be able to pinpoint which areas it still need to work on in order to provide maximum customer satisfaction. However, in order to do this the company should be equipped with a promotional plan which is geared in delivering the highest customer value and in turn, boosting its sales. Noting that customers are becoming more and more concerned about the quality of the service they receive from the players in the hospitality industry, the objective of the recommended promotional plan will be to target key areas in order to offer the best hotel services, attract and retain clients, and increase sales. It is recommended that Holiday Inn focus on retaining 100% of its current market, attract 5% more customers, and increase sales by 10% within the year. The main issue for Holiday Inn is its prior lack of focus on service quality. Staying in a hotel is not just about the beds, the showers, the scents, and the food but most importantly its about being excellently served and spoiled by the staff. In order to increase its sales, the company should not just offer perfection not just on their “tangible products” but also by extending personal high quality service. Service quality is very much important to guests and can highly enhance the experience of staying in their hotel. This high level of customer service can be linked to how it trains and prepares its workforce before they go about on their everyday tasks. The should company ensures the quality of its facilities and amenities as well as recognizes the fact that its workforce should also be trained to provide excellent service. Thus, the company should have a training and certification to make sure that guests get the treatment they deserve. The implementation of this new system will have a lot of implications for the management team. Being focused on customer service, the management might encounter resistance from its current workforce about why a certification program is needed. Employees might be bothered especially if they do not pass this certification program which will cost their jobs. As the training requires time and other resources, the company might up squeezing its revenues to fund these training. Thus, it is recommended that communication lines between management and staff should be open for both parties to clearly communicate their concern. Management should show support to the staff and maintain good relationship to them by adequately explaining the benefit of the new program not just to the company but to the employees as well. It is also supported that the higher expenditures will be offset by the new revenues and clients which will be generated. Early in the planning stage, quarterly targets in terms of number of new customers and sales should already be established. These targets will be compared with the actual performance of the company in attracting and retaining clients and generating revenue. If targets are not met during quarterly evaluation, the company should brainstorm and identify areas of concern. References Holiday Inn Fact Sheet 2008, Retrieved 29 May 2008, from http://www.ihgplc.com/files/pdf/factsheets/factsheet_holidayinn.pdf Holiday Inn Rebrands 2008, Retrieved 28 May 2008, from http://www.brandcurve.com/holiday-inn-rebrands/ IHG rolls out new style Holiday Inn Hotels, 2008, Retrieved 29 May 2008, from http://www.easier.com/view/Travel/Hotels/article-172771.html Kotler, P 2002, Marketing Management, Prentice Hall: New Jersey No bed tax for UK 2007, Opodo Travel News, Retrieved 29 May 2008, from http://news.opodo.co.uk/articles/2007-03-23/18098912-No-bed.php Social Trends 2008, Wealthier and healthier, but are we happier?, Retrieved 29 May 2008, from http://www.statistics.gov.uk/pdfdir/trends0408.pdf Solid Performance for global hotel industry, 2004, Retrieved 28 May 2008, fr http://www.myadbase.com/cgibin/industrynews.cgi?formaction=display UK economy ‘at risk of recession’ 2008, Retrieved 28 May 2008, from http://news.bbc.co.uk/2/hi/business/7212545.stm VisitBritain outlines two new campaigns, 2008, Retrieved 28 May 2008, from http://news.opodo.co.uk/articles/2008-05-19/18600406-VisitBritain-outlines.php Read More