The main focus of the hospitality sector is to adopt the differentiation strategy and technology focus to achieve competitive advantage. A lot of innovative practices are introduced and customer service and value added service play a major role in the hospitality industry. This paper will discuss the differentiation and technology focus strategies adopted in the hospitality enterprises. Some of the strategies used by hospitality enterprises to achieve competitive advantage include Strategic Planning, Market Research. Business Planning, Retail Growth Strategy, Meal Plan Strategy, Sourcing and Procurement Strategy, Concept Development, Health and Well-Being Strategy, Information Systems Strategy, Food Facilities Planning and Design.
Accommodation and food services makes up about 8.1 percent of all employment. (U.S. Bureau of Labor Statistics). Employment in the accommodation and food services industries is predicted to grow 18% between 2002 and 2012, adding more than 1.6 million new jobs. (U.S. Bureau of Labor Statistics). Of the 8,740,000 total workers employed in the accommodation and food services industry in 2003, 5,343,000 works full-time (61%), while 3,397,000 work part-time (39%). (Annual average for 2003, according to the Current Population Survey, a joint project of the U.S. Bureau of Labor Statistics and Census Bureau). ...
- U.S. Bureau of Labor Statistics, 2004-05 Career Guide to Industries and Occupational Outlook
Profit and average room rate at the UK's chain hotels continued to increase in November, according to the latest HotStats survey from TRI Hospitality Consulting. Across the total UK sample of 462 hotels, income before fixed charges (IBFC) - also known as gross operating profit - rose by 5.6 per cent to 52.81 per available room. Average room rate increased by 7.4 per cent to 95.03 in November, a similar rate of growth to the 7.2 per cent achieved during the year so far. In London, profit grew by 7.9 per cent to 82.19 per available room. London's hoteliers continued to achieve rate growth at near annual levels with an 8.9 per cent increase taking average room rate to a new high of 125.85.
- Jonathan Langston, UK Chain Hotels Market Review November 2007 | TRI Hospitality, www.trihc.com
Michael Porters Five Force Analysis
Threat of New entrants:
The Entry barriers include
The capital outlay needed for starting up the operation in this industry is huge ($60 - $70 million), since the leasing expenses and the taxes are high. The capital includes land and building, infrastructure etc.
In this industry the retention rate is high when compared to the others because of the demand for the experienced chefs in the industry. Finding and Retaining skilled labor is a major issue for a new entrant.
Hoteliers have to bear huge taxes levied on them by the government for property, water, electricity etc.
Beside the high entry barriers, new entrants in this industry are high in recent days.
Threat of substitutes:
The growth of Home business restricts travel to a certain extent. So