Background to the International Hotel Industry. Report Example.

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University of California, Santa Barbara
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Report
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The history of the hotel and tourism industry can be traced back in the 17th century. The idea of renting accommodation to travelers has existed since ancient times. Historically, travel and leisure were predominantly reserved for the upper class and royal families. However, later on, religious pilgrimage emerged followed by the incorporation of other classes in travel for leisure activities. The occurrences marked the growth of the exercise which saw its transformation into a business and subsequent classification into an industry. Over the years, the industry has been subject to significant development which has brought about change. The industry has seen various players coming up with investments aimed at satisfying the demand for travel and touring. The industry has also witnessed strategic alliances with other sectors such those in the air transport business.

Marriott West India Quays Background

The London Marriott Hotel, West India Quay is a 5-star luxury establishment that offers accommodation. The facility is located in London, England. The hotel is operated by the Marriott Hotels group and has a capacity of 301 rooms. The hotel provides a luxury accommodation and dining services which allow guest to treat themselves with an exceptional hotel experience. The hotel is seamlessly designed and idyllically suited in a way that makes it provide and a conducive scenery for both business and leisure travel. The hotel offers spacious rooms, fitted with a large flat screen television and a mini bar. The rooms also have the floor to ceiling windows which provide guests with breathtaking views of London Docklands. Other services offered by the hotel include full-service business center and up to 20 multipurpose event spaces (Marriott, 2017, para 1).

SWOT Analysis of the Hotel

Strengths

Marriott's strengths are manifested in the fact that it has a high level of brand recognition and recall. According to Hospitality.net (2016, para 3), Marriot Hotel is ranked in second place among the world's top 50 hotel brands. The aspect positions it at an enhanced competitive advantage. Another strength that the business has is the fact that it embraced technological innovations which enhance its customer experiences. The fact is observable in the way its rooms have the latest gadgets for the clients such as flat screen television and Wi-Fi. Besides, its conferencing facilities have high performing video conferencing equipment. Another strength is manifested from the circumstance that it has good employee retention rates. According to Gallagher (2015, para 6), the average tenure of an employee in a managerial position in the company is 25 years. The industry comparison is much lower. Additionally, some of the employees have been with the company for more than two decades. The retention rates safeguard the company from costs associated with recruiting and hiring employees.

Weaknesses

The companys weakness is manifested in the way it faces extreme competition from reputable brands in the industry. The weakness is further enhanced by the fact that the type of competition exists in a limited market share. There is also the possibility that the company will dilute its brand if it undertakes a global expansion plan that encompasses opening a significant number of hotels.

Opportunities

The company operates in an industry that has provided it with a promising potential if it decides on exploring emerging markets. These unexplored markets include destinations that have high traffic of visitors either because of leisure and business. The company can, for instance, explore promising business startup hubs in developing countries and the United States. The company also has the opportunity to incorporate innovative customer services within its service delivery. An example of the innovative customer service innovative trend that the firm can employ include use of personalization which tracks customer preferences and history using big data thus providing them with personalized services. The company can also begin using chatbots which are an innovation that gives customers instant response to their queries. The use of chatbots will be instrumental since it facilitates the need that the clients always want fast answers. The chatbots are made in a way that they recognize instances where customers are confused and can hand over the conversation to a live customer care representative.

Threats

Marriott faces a threat that emanates from the possible entry of several and reputable brands into the market. The brands tend to have a strong presence and standing and are well established. If internationally recognized brands such as Hilton and Intercontinental hotels enter or expand their offerings in the market, they will position Marriott into a stiff competitive position. Similarly, there is also a threat that originates from pricing points that competing establishments use. The institutions tend to sell themselves as affordable luxury accommodation which puts them into a scenario where they compete based low pricing to attract guest. The situation placed the organization in a conundrum since it decided to further lower its prices as competing strategy, it exposes itself to the risk of reducing profit margin. The rationale for the statement is because its competitors can also easily lower their prices thus leveling Marriotts plan to attract customers using a lower pricing model.

Background to Global Hotel and Tourism Industry

According to UNWTO (2014, p.10), the year 2014 saw an increase in tourist numbers by 4.4% with a total of 1.1 billion tourist crossing international borders to get to their international destinations. Also, the growth was followed by an almost similar increase of international tourism which recorded an increase of 3.7%. The report indicated that it was the fifth consecutive above average growth since the 2000-2009 economic downturn. The statistics also accounts for overnight visitors which implies that they had to look for accommodation. UNWTO (2014, p.11) forecasts that until the year 2020, there will be 3.8% of annual growth in the Hotel and Tourism Industry. The forecast is a reflection of the industry's promising and consistent performance in the face of global challenges such as recessions and disease outbreaks like Ebola.

According to an industry report by WTM (2014, p.2), there has been an increase of people undertaking business and leisure travel after the global financial downturn ended. The reason is that more and more people are employed which places them at a capacity to travel for leisure. The report also indicated that 7 out of 10 individuals in the United Kingdom went on at least one holiday in the year 2014 which is an increase of 38% compared to the year 2011. The reports also indicate that 2 out of 10 UK holidaymakers intend to travel to the United States for a holiday. The report also reveals that New Zealand is an example of a long haul destination in which many of holiday makers in the United Kingdom wish to visit. The situation is further enhanced by the deduction of approximately $44 per individual of air passenger duty. The deduction is likely to increase long haul travel. Other long haul destinations and emerging markets that the report recommends include China, Canada, Mexico, Japan, Thailand, and Australia.

Background to Emerging Markets

The emerging market that is best to Marriott to enter is the New Zealand Tourism Market. New Zealand is small island nation that is located to the southwest of the Pacific Ocean. Tourism is an important industry to the country, and it records and estimates 3.7% as a contribution of the country's gross domestic products. Another 5% of the country's gross domestic product is contributed through other inflows that accompany tourism. Spending by international tourists accrues to an estimate of 16% of the countrys earnings in exports. Internationally, the country is marketed as a green adventure playground. The majority of its tourist destination areas are nature areas such as the Tongariro Alpine Crossing and the Milford Sound. The largest number of tourists in the country come from Australia which is a situation attributed to the proximity between the two nations (Small and Sweetman, 2009, p.7).

Auckland Airport is a major passage point for the majority of the country's tourist. The airport handled fifteen million passengers in the year 2013 alone. In the same year, only 2% of its visitors arrived into the country by sea. The majority of the country's tourists visit places in Auckland, Wellington, Rotorua, and Queenstown. The towns are therefore opportune for the company to set up it hotels due to their high numbers in traffic. The destination is a promising market as evidenced by the increasing number of people traveling to the region. Statistics provided by TIA (2014, p. 28) indicate that there was an increase in international arrivals in the country by 11.8 % between the periods of 2012 to 2014. Another promising prospect emanates from its domestic tourism which has periodic campaigns that urge site seers to travel to domestic destinations for holidays instead of overseas. The campaign positions the hotel industry in a positive prospect of getting overnight clients.

PEST Analysis of Selected Emerging Markets

Political Factors

The political situation in New Zealand is relatively stable. The country has a stable government with strict rules and regulations. After every three years, the country enters and electioneering period that sees a change in governments. The changes in regulations often accompany the entry of a new administration. It is therefore prudent for companies to be aware of the changes. The countries labor laws are quite strict, and the cost of labor is expensive. Taxation and lending rates are high which increases the cost of capital as well reduced a company's profit margins. The country gives businesses the freedom of trade that facilitates the removal of barriers to trade.

Economic Factors

According to Ostrom (2010, p.4), the country's economic environment has registered remarkable growth in the last decade. At the moment, the country is classified as a high-income country. The country's growth in the economy is predominantly driven by both domestic and external demand. Also, private consumption expenditure as well as investment have driven economic growth in the country. The country is however susceptible to changes in foreign demand since it is heavily reliant on trade with other nations. The country also has limited investment in research and development which makes it dependent on innovations from other nations. Additionally, the nation's political stability coupled with a favorable business environment have encouraged as the significant flow of foreign direct investment.

Social Factors

New Zealand's social systems are one that is dependent on a peaceful coexistence with other nations. The principles of living in harmony are credited to the beneficial diplomatic relations the country has with its trade partners. The illiteracy rate in the country is low and life expectancy rate in 81 years. The high life expectancy rate is an indication that the country's health sector is developed. The government emphasizes the importance of domestic tourism. The government uses the slogan "Don't leave town until you've seen the country (Kelsey, 2015, p.15).

Technological Factors

The technical sector in New Zealand has grown to the point that many of its citizen's jobs are dependent on it. Technology is credited with being defining frontline for efficiency in the country. Despite the state showing positive prospects in the use of technology, there exist concerns that there is signific...

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