The History of the Creation of Firmdale Hotels - Business Plan Example

Business Plan Assignment for Travel and Tourism By Student’s name Course code + name Instructor’s name University name City, State Date of submission Table of Contents 9.0 Conclusion 1 Reference List 1 Business Plan Assignment for Travel and Tourism 1 1.0. Introduction 11 1.1 Mission 16 2.0. Situation Analysis 17 2.1. Macro - PESTEL analysis 20 2.2. Micro Factors- Porter’s 5 Forces Analysis 24 2.3. SWOT 29 2.4. Summary of Key issues 35 2.5 Challenges of Running a Boutique & Luxury Brand 38 3.0. Current international marketing practice 40 3.1 Potential Market Opportunity 46 4.0 Segmentation, Targeting and Positioning 51 5.0 Critical Issues Bound to Affect the Overall Strategy 55 6.0 Recommended Marketing Mix & Promotional Mix 58 7.0. Risk assessment 63 8.0 Financial Plan 66 Assumptions in preparation of business financial plan 70 1.0. Introduction Firmdale Hotels will offer New South Wales, Australia themed with luxurious hotel products spread through the Australian traditional foods. The wide array of products will make the hotel high preferred by the tourist and resident due to high class products at average price to attract the high end customers and also the middle income customers who love to spend lavishly on meals and accommodation to family and friends. The Firmdale Hotels products embraces beverages, Drinks, Main Dishes, Snacks as wells rooms that will take account of all age groups to increase the turnover and more also keep up with the latest category of trends and tourist customer needs. Firmdale Hotels has a noble and bright concept which requires a sizeable amount of start-up capital. The start -up capital requirement is occasioned by the fact that the hotels will trade in a wide array of meals, drinks and rooms to meet its tourist hotel status. Borrowed from well- known Hotels franchise found in major Australian cities, such a business for survival and competitiveness will need funding to cater for business space rent which ideally is offered at a premium because of the building importance in the New South Wales. Competitive room rates have been subsidized by the restaurant as a measure of attracting contract guests over the next 6-12 months period. The survival of Firmdale Hotels in the present business setting will depend on repeat company contract clientele constancy to the brand. This implies that the brand ought to continue delivering on its values and promise (Rainsford & Bangs, 2001, p. 13). Firmdale Hotels will be moderately priced. Background music comprising of popular Jimmy Buffet hits depicting sweet life on the water will mix with a variety of pop cultures. Having a rigorous and firm functioning plan will allow the restaurant’s management to focus more on building sales and not profit. 1.1 Mission The mission of Firmdale Hotels is to provide multiple restaurant and tourist-like services to prospective clientele. Such services would include lodging services, hotel services, bar services and outside catering. The services would cut across the aged, the middle-aged, and youth, and children. No age bracket will be left out. The Hotel is bound to do everything possible to rise as the most likeable and prefered restaurant to all visitors and London city dwellers. 2.0. Situation Analysis Firmdale Hotels hopes that the targeted market can be segmented into four distinct groups, ones that it will target. Group one will include the lonesome rich, whose number is approximately 4000. The second category is the young happy clients who are presently mounting at an annual rate of 5.5% with 2500 potential clients. Group 3 will include the rich hippies who are known known to love organic foods and ethnic cuisine. The final category comprises of clients that would be interested in the menu’s healthy offerings, and would mostly comprise of dieting women. Firmdale Hotels’ sales strategy will be to build and open newer locations as a means of increasing revenue. This plan will be executed when one of the hotels shows potential and progressive growth. Because the hotel is projected to build a good local customer base in the first 3 years of operation, the goal of the hotel will be $30 million in annual sales. 2.1. Macro - PESTEL analysis Political Factor: The regulation from the government will be hygiene, healthy, food standards, and being allowed to serve approved foods. The restaurant industry will abide by the economic policies of governmental licenses and will allow constant inspection by the Department of Foods from the Ministry of Health. Economic Factor: The restaurant will have to deal with the fluctuating interest rates that are proportionate to the cost of capital. The economic trends in the region will compel the restaurant to seek for profitability and sustenance of the business. Social Factor: The hotel is armed with the knowledge that certain cultures in the region are now allowed to consume certain foods. It has learnt the background and culture of the country, region and people before initiating the restaurant business. The eating habits of the targeted clientele will definitively affect the sales of the restaurant. Technological: The restaurant understands that a good infrastructure would certainly assist the business to improve. The use of new technology will lead to reduced wages and would lower specific costs. Ecological Factor: Climate change remains a threat due to its negative effects on the restaurant. Legal Factor: The restaurant should follow the laid down legal requirements that are imposed on its macro-environment. This pertains to the impact of laws and regulation on all restaurants. 2.2. Micro Factors- Porter’s 5 Forces Analysis New Entrants-The likelihood of having new entrants has been measured to be moderate. This is because it is conceivable to gain entry into the business, only that for a bigger entry, the investment is quite demanding. Sometimes the existing guidelines can be restrictive and the management and purchase requirements could contain financial and legal complexities. Threat of Substitutes-The hotel and tourism industry is not endangered by substitute products, implying that the threat posed by substitutes is very low. There exists no main danger of substitute products that are explicit to a hotel’s service or product. Supplier Threat-The power of suppliers is perceived to be modest in general. Independents have relatively small minute supremacy to impact the prices in fear of competition in order to gain treaties with the major rival hotels. Buyers’ Bargaining Power- In the case of Firmdale Hotels, the buyers’ bargaining power is moderate. There is no considerable influence coming from individual buyers including business traveler. The hotel brand is specialized on organization of big events and meetings including wedding days where buyers can have power on the cost. It must be mentioned that there is no big competition in the hotel service delivery. Rivalry-The rivalry for market share is going to be intense considering the fact that switching costs and product variation are both low. Firmdale Hotels is likely to experience direct competition drawn from other firms found in the same locality within or around the City of London, and providing the same kind of services and products to the same type of clientele group. The hotel further experiences indirect competition drawn from non-profit organizations that do compete for the clientele’s non-refundable income. The Firmdale Hotels prides in its being among the leading hotels in London, and coupled with the rare market, this combination gives the hotel a strong position in high business competition. 2.3. SWOT This section provides an overview of the interior strengths together with flaws of the hotel, and the prospects plus fears facing the firm and especially in its external environment. Strengths Reputation: The restaurant hopes to establish itself as a strong reputation within both the local market and travel and corporate trade markets; destined to ensure quality, reliability, and excellent service. Brand strength: The restaurant’s brand values do represent stimulating brand loyalty amongst the present and new clients. Shared value: The restaurant will achieve a good propositional value, which is clear and well communicated. Weaknesses Facilities: certain rooms require to be upgraded and renovated in line with laptop links, high-speed internet access, and technical equipment. Systems: formalized systems resulting from comprehensive work environment could be improved. Opportunities Client dependency: repeat corporate business is based on individual quality and service in a luxurious environment. Competitors: presently, there exist no direct competition, specifically in terms of the ‘5-star’ niche. Threats Economy: it may take a lot of time to recover from slight recession. Substitutes: full serviced and furnished service apartments that offer lower daily rates. 2.4. Summary of Key issues The hotel has made tremendous steps in order to maintain its key position as a leading luxury and tourism provider. It has embarked on increasing its advertising and promotional activity throughout its business life since its founding. Apart from providing state-of-the-art features, the hotel offers a contemporary style to enrich the original heritage. One of its business goals is to ensure that its clients feel that memorable experiences and ensuring that these clients consistently visit the hotel site. One of the Firmdale Hotels’ commitment is to be an active partaker in social responsibility. Being a boutique and luxury hotel, Firmdale Hotels has maintained a culture that incorporates people and celebrates the individuality of both its staff members and visitors. Firmdale Group of Hotels operates on believes that there is no request from clientele which it cannot meet, and thus always seeks to appreciate every applicable detail irrespective of the smallness of the matter. Firmdale Hotels has being the first hotel in the region to embrace technology advancement in bid to ensure that all its guests are well informed and that the hotel sets up its services. 2.5 Challenges of Running a Boutique & Luxury Brand Back then, Firmdale Hotels experienced very severe economic climatic challenges. It has once encountered problems touching on expansion plan due to the process of acquisition. Firmdale Hotels has further experienced various challenges in bid to separate other rival hotels. It was critical for the firm to embrace a more well-thought-out approach to talent development, planning, and communication. Such a competition was a key challenge faced by the firm; this scenario made the firm to both advertise and market itself anywhere for the public everything regarding the existence and service provision of Firmdale Hotels. The Firmdale Group of Hotels has further encountered the impact of problems that affect the travel sector including the airline strikes, security alerts, and volatile foreign currency markets. 3.0. Current international marketing practice The hotel anticipates its customers to come from not only from London but also from across the world. It banks its hopes of tourists who love to be associated with the City of London, a city to behold. Within the market in Greater London, we have the Ham Yard Hotel and the Soho Hotel as our competitors. The Ham Yard Hotel has consistently served it clients with authentic Middle Eastern food but for starters the premise does not portray existence of a restaurant and customers need to come with their alcohol, and they pay a corkage charge of £1. On the other hand, Soho Hotel has been able to integrate into its menu a mix of English delicacies and the British food in its menu (Thomas, 2014). However, clients have complained about their specialty; the early bird menu requires one to book in advance and operates on specific hours. To be able to compete with our competitors, our services will be 24 hours a day, offer a variety of wine to our clients and our meals will be served with green tea which according to English traditions is taken to aid in digestion after a heavy meal. London has been identified as the city with the highest number of expatriates from across the world into the United Kingdom (Zimmerer, 2002, p. 12). The opportunity in this market is very viable especially with a strictly English menu to serve the clients who are eager to sample the home country dishes. Firmdale Hotels’ marketing strategies accentuate to first create awareness to the customer regarding our services, develop the customer base and subsequently working to build the loyalty and referrals from the customers (Ryan, 2014, p. 19). Firmdale Hotels premise is positioned at the town center. Hence, it will be able to use print ads such as neon signs and utilize social media sites such as Facebook and Twitter to attract clients. For Firmdale Hotels to suit in the well performing global businesses, there is a huge necessity for the firm to possess a linkage of channel relationships, resellers, and partners to aid them in intensifying globally. Careful choice of global partners is very crucial to the instigation of gaining entry into markets overseas. When attempting to outdistance the rival hotels to appear as the best market frontrunner, Firmdale Hotels should undertake any possible market mix to aid it. 3.1 Potential Market Opportunity Firmdale Hotels will have a manager and 150 waiters and 30 cashiers working on a shift basis to ensure optimal service delivery to our clients (Zimmerer, 2002, p. 28). The hotel will equip the restaurant with high-end facilities such as the food display case, refrigerators and freezer, cooking equipment, food preparation equipment, kitchenware, restaurant furniture and electronic gadgets. Being a London delicacy hotel, it anticipates that it will import some of the ingredients to prepare its food and drinks from all over the globe. This group of hotels has already identified a London-based supplier for our items while other common items will be purchased from suppliers based in London. In case the Hotel’s operation management receives positive criticisms and implements them, the organization shall accomplish a considerable level of competence based on their openness to criticism. Therefore, the management would have renowned and valued their clientele perspective. Firmdale Hotels provides the best and most modified service to targeted clientele who parade their restaurant premises. The hotel will include required business essentials in its facilities, such as wireless access, internet connection, and easier access to conference rooms with technology and audio-visual needs together with catering for longer meetings. Sustainability in business is a strategy, which aims at achieving a balanced economic, environmental, and social influence of the business. This focuses on modalities of minimizing unconstructive impact of the three aspects to ensure opulence in the generations to come. To achieve this, the business has to stay faithful to its commitment to the environment and the community in which it operates for as long as it lasts. 4.0 Segmentation, Targeting and Positioning Firmdale Hotels targets 3 core markets: 1) people working in the business district area during a normal working day; 2) neighbouring businesses looking for dinners during their business meetings; 3) and workers with families who go for cheap foods and. Firmdale Group of Hotels is dedicated to offering benefits and value to all its clientele, above the typical standard of other restaurant facilities at moderately reasonable rates. The firm thus seeks to provide its prospective clientele with an exceptional individual service and at a level of recognition, which they have come to accept. The firm will thus provide its clientele with a luxurious and relaxed environment within which a room will be sufficient to conduct any form of meetings and businesses (Vrtiprah, 2000, p. 770).The environment to be felt by the restaurant’s clientele should be one that cannot be felt by other competitors. According to the proposition by Ryan (2014, p. 19), the guests to the restaurant should always develop a mutual relationship with the restaurant and ensure retention of value for their money, efficiency, and dependability in providing them with the required support. It is a relief that the London City in which Firmdale Hotels operates in has a very strong sense of community. The major thrust of strategy is to lever the company’s ideal location together with a specialised cuisine into greater profits via higher prices and sales volume. Firmdale Hotels understands the underlying needs and seeks to satisfy customers’ needs. The restaurant’s approach is very simple. It plans to thrive by giving individuals a great mixture of health and interesting foods and an atmosphere that attracts “trendy” individuals. 5.0 Critical Issues Bound to Affect the Overall Strategy Firmdale Hotels ventured into the international market to enjoy advantages and face some challenges. It is true that different nations have different ways of conducting business. Firmdale Hotels is thus bound to face a mix of cultural differences, thus the need for the company to actively learn the cultural mix all its target market areas. Leaders and managers drawn from the hotel and tourism industry, universities, and government leaders are among the persons that should smoothen the entry of the hotel and tourism industry. It is significant for the market participants to have a physical meeting in bid to comprehend the market and sign off the strategy. 6.0 Recommended Marketing Mix & Promotional Mix This strategy is centred on the “adoption strategy” by changing the design, packaging, and function components that meet the needs of the market. The key elements of the marketing mix are known as the marketing plan (the Ps). 6.1 Product The product is essentially important because if it is absent, it turn out to be very unbearable to attain and match with the remaining Ps in the promotional mix. While designing hospitality service/product for various business services, leisure, food and beverage, high quality should be considered in the product. 6.2 Place (or Location) This aspect in instrumental in the situation of Firmdale Hotels whenever the hotel management is figuring out the proper location for its hospitality business. The location of Firmdale’s main hotel and other 6 branches focuses enables the firm to determine the ideal place where clients are found most. 6.3 Promotion This aspect is applicable in situations where the services/products provided on the market are indistinguishable. As a means of gaining economic benefit, it calls for the need for advertisement of such services and products meant to appeal to more clients. Providing promotions to clientele by giving them services and products free anytime they set principles is factor that would drive the company to attract more consumers. 6.4 Price Clients usually hold high expectations in the hospitality industry specifically because they seek a good care by being served with the best services and products at fair prices. While determining the pricing, the hotel company puts into consideration the profit margin, yet not ignoring the product quality since that is the reason consumers pay large money to eat from hotels. 7.0. Risk assessment Risk management refers to the process of assessing, identifying, and prioritizing risks coupled with economical application of reserves geared towards monitoring, minimizing, and controlling chances of any adverse risk. Risks do emanate from various sources including credit risk, liabilities, accidents, and threats from project letdowns (Russell, 2016, p. 21). Firmdale Hotels should therefore take steps that are related with the degree of risk in the global market. Such a risk should be more distinct especially when it utilizes a bigger share of resources and time. The Hotel can seek to minimize the risk of collaborating with the key stakeholders and founders of the hotel by devising proper win-win terms. A further move in risk management would entail more than just financial and legal distresses. The concept of brand protection is compulsory because it is deemed the long-term strategy for the hotel. Above all, the firm should be take caution when making adverts about its products and services as a means of ensuring that whatever is advertised mirrors what is delivered in the market. 8.0 Financial Plan The full setup and establishement of Firmdale Hotel in London requires assets, including expenses and cash needed to support the running of the business until revenues reach an expected limit. The sole proprietorship restaurant business liabilities in most cases come from bank loans from bank of commercial investment and already we have obtained private investors. The hotel business expects to reach profitability in one and half years and does not face any serious cash flow problems. The hotel management expects about 15, 000 customers per month which will produce a break-even point. Initial capital required includes an expense and the money required to aid the business until it is in a position to collect revenues enough to sustain its operations. However, the restaurants liabilities will come from renting services, taxation, labor, compliance with the law. Credit facility will be obtained in the form of a short term and a long term loans. The short term loan is meant to take care of the labor whereas the long term loan can take care of advertising cost, the rent and the taxation on the business. The business is expected to realize profitability in about two years. With presence of loans and personal investment, hotel business is not expected to endure constraints in the cash being injected into the business. The profits to be realized per month will be infinite as it is yet to be established how many clients can be reached in a particular duration of time. Assumptions in preparation of business financial plan The financial plan will entirely depend on some assumptions, a few of which are listed below. a) There will be a fairly high growth of Emiratis economy in town, provided that there is little competition in the emirates region. b) There is insignificant effect on technological trend which may render the business and its products and services outdated. c) The available equity capital will stand the financing of all the business activities contentedly. Firmdale Hotels Projected Income Statement                   projected Income statement     AUD   AUD     Year 1   year 2     Revenues 4,763,118   5,620,479     Less cost of goods sold   -     Cost of goods sold 3,110,297   3,359,121     Gross profit 1,652,820   2,261,358     Less operating expenses       Depreciation expense 200,000   218,000     Insurance 140,000   152,600     Marketing 45,000   49,050     Property taxes 69,000   75,210     Rent 280,000   305,200     Salaries 267,320   328,350     Utilities 100,000   122,000     Total Operating expenses 1,101,320   1,250,410     Net profit 551,500   1,010,948                   Read More