Marketing in Hospitality industry
This boils down to the fact that reaching a near exact (if not exact) supply and demand equation is important for achieving company goals. In hospitality industry, market supply can be measured by the number of beds or hotels available in an area. They are categorized as budget, mid-market or luxury experiences. Demand, which is an important factor in determining the profitability of a hospitality organization can be categorized as negative, nil, latent, falling, irregular, full , overfull an unwholesome ). Each demand type requires a different marketing strategy. For example if there is a latent demand it means that demand can be created by providing services that customers need. For example, many hotels provide “domestic short breaks” as a way of creating latent demand (Bowie and Buttle 2004). Another demand categorization stems from different types of travel which can be business travel and travel for leisure. Both these could be domestic and international.
Hospitality industry is characterized by cyclical trends. For example, many tourist destinations close down during adverse weather conditions like extreme heat (e.g. UAE) or extreme cold. Thus, the hotels and restaurants have to ensure that they either earn enough during the peak tourist seasons to sustain their operational costs during the troughs or come up with marketing techniques to attract customers during these times. Socio-cultural factors also impact this industry to a great extent. Eating and drinking habits, travel habits and types of entertainment that people like to indulge in are all important factors that the hotels and restaurants in a particular area need to keep in mind before designing services or products. Demographic factors also impact this industry. For example, countries that have aging population need to have restaurants that have menus according to their liking which would be very different from those in younger countries. Technological advances in communication as well as kitchen equipment are vital factors affecting hospitality marketers. Environmental factors have today become very sensitive issues for marketers of this industry. The race for setting up new leisure properties has had an adverse impact on the environment which the local populations have started acknowledging now. Local population of these places has felt the effects of deforestation and carbon emission resulting from ferrying tourists from one place to the other. Thus, the marketers need to keep these sensitive issues in mind and promote green services which do not harm the environment. The intermingling of the local and foreign population also has impact on the social and cultural values of the local youth. Internal factors that impact this industry are suppliers, employees, intermediaries, competitors, publics and customers (Bowie and Buttle 2004). Suppliers are very important for a restaurant of a hotel to maintain quality. Employees are of utmost significance in this business as they are the face of the organization. Service is an intangible experience which is highly dependent on courtesy as well as skill. Intermediaries are important links between the customers and the hoteliers. They help to influence consumer choices for a particular destination and hotel. Competition like any other industry is very important factor in determining the marketing strategy. Direct competitors can be tackled by designing value add services but indirect competitors pose equal amount of threat as the direct ones. For example, the decision on buying a luxury car vs. going on a holiday has a significant impact on the business generation for this industry. High fixed cost is another important characteristic of this industry.