The Marriott Hotel in London - Essay Example

? International Hotel Development: An Analysis of the Internal and External Environment of the Marriott Hotel, London Grade Date The hospitality industry refers to ‘a contemporaneous human exchange, which is voluntarily entered into and designed to enhance the mutual well being of the parties concerned through the provision of accommodation, and/or food, and/or drink’ (Lashley and Morrison, 2000). Contributing tremendously to the global economy, the hospitality industry is at the root of almost all other industry, considering its widespread scope and application. From travel to lodging, the hospitality industry has a strong impact on the lives of both individuals and businesses on a personal and economical level. Hotels are one of the most profitable enterprises of this industry, particularly luxury hotels. Unlike upscale and upper upscale hotels, although luxury hotels offer many of the same features and give relatively the same living experience, it is their exclusive nature that sets them apart from other such hotels (Barsky, 2001). With only a few hotels per country classified in the highest tier of luxury hotels, they make the base of the hospitality industry’s strength. The Marriott Hotel in London is one such hotel. To understand what terms are these hotels classified into, the very specific categories that the hospitality industry puts them in it is important that one thoroughly analyzes and understands the hotels that make up each level and standard. This means to gauge the full effect and scope of a particular hotel, in this case the Marriott Hotel in London. This can be done best through either the SWOT analysis, defined by Albert Humphrey, which focuses on the strengths, weaknesses, opportunities and threats of an environment or the PESTLE analysis, which means analyzing the political, economic, social, technological, legal and environmental factors of a hotel. All will be used in reference to the internal or external environment of the hotel, respectively. Hotels are generally judged and analyzed based on two factors – that is, their internal and external environment (Jones and Lockwood, 2004). The internal environment of a hotel refers to all factors and features that remain exclusively confined to that establishment itself. For example, all factors such as the business revenue of the hotel, the physical features of the hotel, the staff and other positions of the hotel, all contribute towards the internal environment of the hotel. As an extension of this, it can be said that any factors contributing towards and influencing the internal environment and state of a hotel can also be considered part of the environment itself (Huo, 1995). The factors that decide what an internal environment is based upon are factors such as what a company wishes to provide its customers with, and how its strengths can cater to those requirements. Other factors can be the means with which to provide their services and the services it wishes to furnish those requirements. In summary, the strengths, aims, resources and requirements of an industry all contribute towards constructing its internal environment and the manifestation of these components is what provides the physical representation of this internal environment (Raghubalan and Balan, 2007). On the other hand, the external environment of a hotel refers to all factors and influences that come from outside the enterprise itself. This means, all factors other than the business’s own desires, aims, means etc are considered external environmental factors. The external environment factor can influence the internal environment of a hotel or enterprise, but it is not only confined to such an enterprise. It can have effects of its own independence, other than in relation to being an influencing factor. Government policies, economic conditions, technological advances are all factors that comprise the external environment, but the biggest most important factor of the external environment, when speaking in terms of businesses related to the hospitality industry and hotels in particular, is competition from other hotels and businesses (Lucier, 2008). This is the prime factor that influences almost all internal workings of a business and it is the biggest variable to consider in terms of a hotel’s policy and success. When speaking of the hotel industry and the external environment competition from other hotels will be the prime area of focus. Other factors can include the demands customers have from that particular hotel, as well as the physical location of the hotel, in terms of culture and geography. INTERNAL ENVIRONMENT Most industries would consider their ideal internal environment to have four features – they would want it to be valuable for the customer. They would want it valuable in such a way that a customer would not get the same benefits from elsewhere, thereby giving it a certain sense of rarity and exclusivity. Building upon that, they would want their features and services to be such that no other company should be able to imitate it, at least not in a way that would not cost them tremendous effort and resources. And finally they would want their services and company to be unique onto it, and required for that very uniqueness (Hiriyappa, 2009). The Marriott Hotel, London seems to have incorporated all these features into its internal environment, thereby making it one very close to perfection, which is likely to contribute towards its success as a luxury enterprise. There are a number of factors that go into studying the internal environment of a hotel, and that then contribute towards its success. To have a good environment within a hotel would mean to have happier customers and a more enjoyable experience overall. Although a successful internal environment requires more than just a comfortable physical experience, as explained earlier, there is no doubt that it is one of the biggest factors to consider. Rarity, uniqueness and being non-substitutable would be useless if one did not have a product that people wished to reproduce. As a result, the factors that lead to a comfortable internal environment must be studied. The study also states that a successful physical internal environment will have the following four features to consider – the merchandising, that is the product they are offering, the operation, the financial aspect and the environment itself. Physical Features When considering the Marriott Hotel, there is no doubt over the merchandise it offers. A beautifully constructed building located in Mayfair, it is luxuriously designed from top to bottom. Its rooms, restaurants, and clubs all exclusively designed, the hotel aims to offer not only a high sense of aesthetic but also a variety of features. The effect of a physical surrounding on customers and their satisfaction with purchases, accommodation in this case, has been a long studied relationship and there is no doubt over the direct correlation the two have (Lawson, 1976). The physical aspects of Marriott, both in visual terms and in others, and the effect of Marriott both objectively and subjectively contributes a great deal to its success and strength as a landmark institute of the hospitality industry. It is an exemplary beacon of standard and represents the level of exclusivity that most enterprises wish to strive for, and to understand the reason behind its position as such a highly objective view must be undertaken. Location The location of the Marriott Hotel in London is one of the key aspects to its long standing success as one of the prime choices when choosing a luxury hotel. The hotel is aware of its target demographic and has been blessed with a location that caters ideally to it. It is quite probable that an average tourist would not choose to reside in the Marriott Hotel, whether motivated by price or location. Rather, it would be businessmen and higher end clients who would choose to and be able to afford to stay in the Marriott hotel. Located in Mayfair, a highly exclusive area, it is sure to have its target demographic in good company. Furthermore, located at a short distance from both Paddington Station and Heathrow Airport, travelling businessmen are likely to choose the hotel owing to its comfortable distance from both the station and airport, thereby making the commute easier and more convenient. For these same businessman, the fact that the hotel is located 20 minutes away from the Canary Wharf business district (Lee, 2003) is also a feature to give due importance to, again contributing towards the Marriott being the hotel of choice for travelling businessmen and otherwise. Facilities and services Again, keeping in mind its target demographic, the Marriott hotel offers features that these customers would value and require, thereby making it fit into those four categories for a successful internal environment. There are likely to be two sorts of customers who can afford to stay in the Marriott Hotel, London – high end clients like celebrities or other well-to-do customers, or businessmen. As a result, the hotel focuses on each of these two categories, making sure to have what they would require. The hotel has a number of business and meeting rooms where conferences and other business meetings can be held, whether on a more private, intimate level or on a general, public level. There are large seminar halls that can host up to thousand people, and there are a number of restaurants with ambience suited to that of a business lunch or dinner. On the other hand, the hotel also has a club and recreational gym feature which guests can make use of in their spare time. One of the biggest examples of the hotel thinking from the perspective of their customer is how the management has kept the club end of the hotel independent from the business end of the hotel. The Club Lounge, Mariott’s exclusive club, is available for use to all guests residing on the Club Level – a number of rooms and locations designed for recreational and leisure use. This gives the hotel the distinct feel of having two separate tiers within it, keeping the business aspect independent from the recreational or general use aspect. The Marriott also has a number of suites to accommodate, making it a comfortable option for those who wish for a slightly longer stay. Studies have shown that the state and level of facilities and services offered by a hotel is the key to its position as a successful hotel in terms of economic advantage and customer preference (Anderson and Naurus, 1998). Having innovative and state-of-the art services contribute towards customers feeling easy and comfortable. Again, keeping its business demographic in mind, the Marriott Hotel offers free wifi networks throughout the range of their hotel, thereby focusing favourably on the ‘technology’ aspect of PESTLE. These features all contribute towards business customers choosing the Marriott for professional or personal reasons. Employees and Staff A key aspect to an inhabitant’s experience of a hotel is also the staff service that they receive. The ambience and surrounding do much to set the right tone, but it is the staff that will truly give life to it. Knowing this, the Marriott staffs tries to keep the lodger in mind in their dealings. For example, the hotel has an officially implemented management system (Ericson, Ericson and Minoli, 1989) that allows staff to access guest preferences and information that they have accumulated over their visits and stays. This not only allows them to give a slightly more personal feel to the services they offer but it also makes the guests feel like they are appreciated and taken importantly. It makes them consider the place as more than walls of concrete; it gives it a feeling of homeliness that would make them choose Marriott over another hotel. The Marriott in London is no different than its other chains and the staff and employees take advantage of this system as well. Policies and Competition Because of a general economic decline, coupled with a large amount of emerging competition, the hospitality industry, like almost all other industries has to give its focus a slight shift in priority towards maximizing cost efficiency without compromising industry standards and ideals. The Marriott, like all other hotels, is no different. Being a luxury hotel, it is harder to consider cost efficiency, but even if a hotel’s customer demographic is not as concerned with price as perhaps some other hotels’ might be, the hotel itself needs to consider cost maximizing in any case (Saravanan and Rao, 2007). The economic impact hits businesses more than individuals in any case and so any fiscal loss or compromise is felt hardest by the industry rather than the customer (Allin, 1999). Also, because there is such a wide variety of competition and such easy access to information on all these different standards and types of hotel, it is very easy for a customer to move on from one choice to another. It takes a few clicks of a button to determine the best pricing and get the best reviews on a hotel and so businesses have to find creative ways for them to benefit off more than just cost. There is no doubt the Marriott is not the cheapest hotel in London, even if speaking in reference to luxury hotels, but the hotel offers its worth in such a way where you would not want to go to the Marriott if monetary value was your concern. Rather it offers services and an environment such that it is incomparable to any other competitors and so customers wishing to seek the Marriott experience and no lesser alternative will come looking for exactly that (Brotherton, 1999). EXTERNAL ENVIRONMENT The external environment of a hotel or industry is one that influences the hotel, but is not actually a part of the hotel directly. Of course each hotel will have its own distinct external environment to speak of, or live in so to say, but it will be simply that: an atmosphere to reside in, rather than a part of the hotel itself. When speaking of the external environment of any hotel there are two main aspects to consider – the competition the hotel faces from other competitors and the demands it faces from its customers, both existing and new. Competitions from Rival Hotels The SWOT analysis give reference to the ‘threats’ faced from the local environment, and in terms of a hotel that would primarily mean rival competition. The main competition the Marriott, London faces is that from other high end luxury hotels such as The Ritz Carlton, The Park Lane Hotel, Ascott Mayfair, etc. Although they are similar in the services that they offer, the fact is that most of these hotels have a strong history of service and so its client list has developed a certain sense of affinity for each hotel, whether based on their international service in other countries, or a natural sense of choice. As a result, there is little risk of losing clients to matters such as price or innovation, provided that the Marriott maintains the constant standard that customers expect from it and that is at par with, if not constantly striving to surpass, rival hotels (Slattery and Roper, 1986). Political and Economical Factors Political and Economical factors are some of the fundamental factors to consider in external analysis, as under the PESTLE framework. Some primary factors that concern or affect any hotel are factors such as government policies, security factors, the tourism levels of a country, etc. Speaking of such, the Marriott Hotel, London enjoys a well balanced external environment. Government policies on tourism, travel and taxes are favourable enough (Penrose, 2011) and the country enjoys a safe, serene environment. The hotel does not have to suffer on account of political turmoil in the company and enjoys a heavy traffic of people throughout the year, whether they are tourists or businessman. Furthermore, because it resides in the posh economy sector of London, the Marriott has to face no risk of falling prey to the economic recession or being hard hit by economic decline. Rather, it is sure to have a constant demographic of clients who are not only able to pay for their services, but also are more than willing to (Slattery, 2000). Customer Demands and Perceptions (Social Factors) More than any other industry, businesses in the hospitality industry have to work very hard to keep up with changing trends and demands in the market. Any business that is not relevant will fall behind and quickly be run over by other competitive, up-to-date businesses. To keep up and stay relevant, businesses need to know what their customers want from them and how to provide it. A hotel, like any business in the hospitality industry, relies solely on their customers for their success. To be a customer’s first and only choice is what makes them stand apart, and that is what the Marriott Hotel, London understands and tries to focus on. For example, the hotel has taken a ‘green approach’ (Marriott International, 2012) by marketing itself as an environmentally friendly hotel, aiming to reduce the use of excess energy and water. Businesses have a social responsibility to their customers and when customers feel that this responsibility is being taken care of, they feel more comfortable relying on that hotel for other services as well (Polonsky and Rosenberger, 2001). Therefore, by marketing their image as a responsible, safe hotel, the Marriott Hotel, London gives its customers the impression and feeling of a caring, comfortable environment. Other policies Marriott uses to keep its customers happy are discount policies aimed at recurring and returning customers. For customers that stay a certain number of nights per year they can get the service of discounted rooms in the future. This is another feature that makes the Marriott a popular choice for travelling businessman. Although this does little to make it an economical choice, it is the gesture of the act that proves effective in the long run Technological Factors . Technology is a very important factor to consider; particularly now as almost all business transactions are based on it. Most customers also consider technology necessary for their personal preferences, such as keeping contact with loved ones out of the city, or else because they are so used to it. The Mariott offers a high level of technological advancement, whether in the sense of internet and computer facilities, or else having automatic customer service setups. Legal and Environmental Factors Once again, keeping the PESTLE analysis framework in mind, the environment of an organization also contributes a great deal to its serenity and the comfort or discomfort of the guests of a hotel. Guests staying at the Marriott, London enjoy a favourable sense of climate and, since it is located in the posh, green sector of the city, it is located in a green, clean environment. SUMMARIZING WITH SWOT ANALYSIS The SWOT analysis can be an easy way to summarize all the features of a hotel, by looking at its strength, weaknesses, opportunities and threats. The strengths of Marriott, London lie in the combination of its location and its target demographic. Travelling businessmen find it centred in the business district and a stone’s throw away from most travelling stations, which makes it a simple and obvious choice to stay in, considering all the facilities they are offered once they are there. Secondly, the hotel offers its services on both a business and personal level which again makes it a strong choice for guests returning for a second visit. The weaknesses of the hotel can be the fact that since it is located in a posh district, there are a number of other luxury hotels in close vicinity and this means a high level of rival competition. The Marriott hotel has to rely on customer loyalty to differentiate from other hotels and this can prove to be difficult to work past in terms of expanding a customer database. The opportunity the hotel has banked on is again its location and appeal to travelling businessmen. Marriott hotels across the globe offer the same sense of feeling, and so travellers feel comfortable and familiar, less foreign in overseas countries. As a result, when choosing from luxury hotels in other countries, they choose to stay with the Marriott. Threats of course are again from rival competitors, as explained in its external environment in more detail. CONCLUSION In conclusion, the Marriott Hotel, London is a highly successful luxury hotel that has managed to maintain a strong standing position in the luxury chains of Europe. This is partly due to its high standing quality of maintenance and standard, but also due to a number of external factors that it has been lucky enough to enjoy the benefits. An impeccable staff, a set of few but solid features and services and a high emphasis on quality are factors that the hotel has chosen to take great notice and due care of. This has been aided with wise business decisions such as a good location, need-based marketing and an exclusive clientele. Furthermore, the Marriott hotel enjoys a high standing positive reputation, which businessmen and private customers choose to favour and the Marriott Hotel, London is no exception. Although there is no doubt that there is a certain element of competition faced from other competitors, in the long run, the Marriott has a strong enough personal database of constant clients that it does not face the risk of losing these clients to other luxury chains, whatever the economic state might be. As a result, the combination of a strong internal and external environment is what seems to be the prime motivator for success for the Marriott Hotel, London. References Allin, P., 1999. Is the UK hotel sector out of trouble? The International Journal of Contemporary Hospitality Management, 11(7), 318-325. Anderson, J. and Narus, J., 1998. Business Marketing: Understand What Customers Value, Harvard Business Review, 76 (6), p. 53-65. Barsky, J., 2001. Luxury Hotels and Recession: A view from Around the World. The Leading Hotels of the World, Ltd. Brotherton, B., 1999. Towards a definitive view of the nature of hospitality and hospitality management. 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