Strategic Management in Hospitality Paper Example

Paper Type:  Research paper
Pages:  7
Wordcount:  1829 Words
Date:  2022-10-06

Introduction

The hospitality industry is characterized by immense competition, and different parties have taken up various strategic management techniques to keep up with the current global trends by placing much focus on the quality delivered to their clients. Service quality is the critical component in the hospitality industry, and it is essential for the success of every business here. Different trends are coming up in the hospitality industry resulting in a change in how the services are delivered. Service providers take this aspect seriously and have made it a subject of research to keep up with customers want and expectations (Fisher & Nair, 2009). In this papers, two emerging trends in hospitality will be deliberated. The first one is the rise of homestay industries such as Airbnb and the need to appeal to the catering needs of Millennials and Generation Z. These two trends are calling for the traditional hospitality industry to revamp its earlier schemes of work to incorporate the necessary changes to meet customers expectations. The company operating in an international environment that this paper will look into is Marriott International. The paper will evaluate the strategies that should be employed by this firm for future success and the relationship between the trends and the company.

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The Rise of Homestay Industries Such as Airbnb

The rise of Airbnb creates an obvious threat to the traditional hotel industry. Not only Airbnb but also other home sharing companies that let travelers' book and stay in a local setting, for instance, a modest flat in any region of the world such as in Miami Beach (Zernas, Proserpio, & Byers, 2017). Airbnb since its founding in 2008 it has recorded a significant number of guest arrivals attributing to one hundred and sixty million and now it has more than three million worldwide listings in sixty-five cities. In New York, Airbnb accounted for three million overnight stays in the fiscal year of 2016 in comparison to thirty-three million overnight rentals among hotels. This is by the Hotel Association of New York City (Glusac, 2016). Airbnb has, however, in a way helped hotel bookings to stay steady by taking some customers from concierge's hands. In March the investors of the strut by Francisco was valued at thirty-one billion dollars (Zernas, Proserpio, & Byers, 2017). In the hospitality industries, only the forty-billion-dollar market value of the Marriott is more substantial. However, hotels brought in a more significant sales portion thanks to the higher cost per room in hotels. The rental market is majorly disruptive as. First, it creates a vast number of stay options for travelers thus competing significantly with hotels, and secondly, industrial competitors are courting luxurious segments like the premium travelers and business travelers. The hotel industry is going through another disruption from the collaboration economy, and the segment of Airbnb gives rise to a variety of apartment rentals offered to customers at more affordable prices.

The traditional hotels respond to this by sharpening their business strategy as well as their differentiation in comparison to the new competition (Department of Trade and Industry). The entrance of Airbnb in 2008 into the rental business has had the hospitality industry to cast a cautious eye mainly due to its popularity among the millennials and Gen Z travelers. It comprises the leading home sharing business with more than two million worldwide listings. Despite the hotels doing well in the last fiscal year as they rose in occupancy and income rates, there is anxiety among corporate suites. Hoteliers admit to seeing the fluctuations in preferences by consumers leading to new brands that are social-oriented, more functional apps, and laid-back settings (Ford, Sturman, & Heaton, 2011). Hotel companies such as the Marriott hotel have had to gradually revise their business strategies and expand their ranges by increasing brands meant to appeal to millennial travelers and those who want additional connectivity regarding technology and shared space.

Business strategy is an enterprise's operational plan for attaining its vision, giving priority to its goals, competing efficaciously and optimizing economic performance with that of its working model (Ladhari, 2009). According to Marriott CEO Arne Sorenson Marriot international is getting into the vacation rental market to enable it to compete with Airbnb while responding to the company's need for a different kind of experience (Glusac, 2016). The Marriott has then taken ten years to get into vacation rental business because they took time to get familiar with the regulations and laws involved around the practice. Marriott International is attempting to compete effectively with Airbnb using mechanisms of working in the home share market. Marriot has a selection of more than two hundred mainly chosen homes in London. The service was set as a pilot scheme in partnership with Hostmaker which is a London home management service. In April the Marriott announced the six-month program in collaboration with Hostmaker, a London based rental Management Company which also works with other services like Home Away and Airbnb (Erdem, & Jiang, 2016). They had in mind the strategy of serving the groups. People are increasingly looking for areas that big groups can stay, for instance, family groups on a get together, a bachelor's weekend or a college reunion. They would prefer to have a shared space. Therefore, this strategy will benefit the Marriott international.

In the revamped strategy the guests or travelers can expect additional extras like 24/7 phone support and guaranteed personal check-in to ensure all arising issues are catered to. The guests will obtain Marriott loyalty points and other rewards. Different from other hotel chains that have dipped their plans in the homestay market, Marriot decided not to create a new brand or rely on the name of Hostmaker to sell its product but instead it is using one of its existing brands, The Tribute Portfolio, which is a collection of twenty-eight independent hotels around the globe. Marriot hotel believes that the experience obtained by clients should not differ between a tribute portfolio hotel and a homestay property. Marriott added another kind of safety, design and security criteria that meet their standards to their Hostmaker portfolio. Tributeportfoliohomes.com, the website, is currently at a beta stage although it is attractive it yet still does have the functionality of bigger home stay brands (Oates, 2016). Its downside is that it lacks a means of filtering the price and users are required to click through to the property to see pictures unlike in Airbnb where one can scroll thumbnails before opening the listing entirely.

The Marriott's offering differs from that of Airbnb in certain means, and they never fail regarding quality control. The Marriott's currently makes use of Hostmaker a homestay property which provides regular checks and maintenance to make sure selected rest homes meet its standards of quality (Glusac, 2016). Hostmaker allows Marriott to have an end to end exclusive brand experience for the customer. Whereas the plus model of Airbnb which is a curated assortment of verified homes, only has one preliminary check. Later on, the system is dependent on consumers' reviews (Wang, 2018). Hostmaker is particular in its designs as it only takes a home if it meets their design criteria. They assist in designing the homes and having relationships with the homeowners. They offer the assistance upfront to the homeowners if they need it and advise them on how their home would become even more attractive if they needed to set it up for homestay. Companies should be flexible with their business plans ensuring they cater to customers' needs and the changing market. Marriott's decision of getting into the rental business will ensure they can compete with Airbnb thereby not lose customers who would prefer those kinds of accommodation details.

Catering to Millennials and Gen Z

Millennials need products that are tailored just for them. Marriott's hotels have had to revamp themselves by embracing current technologies (Oates, 2016). A ninety percent of millennials and Gen Z travelers book their travels and accommodation online. The group consists of people under the age of thirty-five who hardly remember to use an in-person travel agent. They will go online to look for varying options, read visitor reviews and travel guides and compare prices and quality. Therefore, travel marketers require an effective content marketing strategy which responds to the digital buyer's journey. The millennial traveler fancies themselves as explorers without bounds who is hungry for intellect and favors traveling to, learn and discover new things. They are significantly predisposed to planning trips on the last minute to gratify the sheer lust for adventure (Alton, 2017). The social media platform plays a vital role in how the millennial traveler comes up with their decision. An estimated ninety percent are looking into Facebook and Instagram for inspiration (Alton, 2017). To connect with this generation hospitality brands should embrace the influence of user-generated content in social media sites over traditional advertisements.

In order to appeal to millennials, Marriott management has had to consider several factors such as; millennials look up multiple sites before booking their travels as they look for the best deal possible, fifty percent book their travel and accommodation through a tablet or a smartphone (Alton, 2017). Sixty percent are likely to elevate their packages by buying mid-flight Wi-Fi and other services. They definitely will share their travel experiences on their social media platforms. Individuals share their experiences differently where others post one time in a day and others as they travel thereby creating numerous social activity (Grzinic, 2007). Seventy percent shall remain loyal to the program that provides them with the most rewards such as discounts, cash rewards or upgrades. Millennials are connected forever through the internet, and travel apps have become the millennials preferred method of interacting with brands. They also like to travel abroad compared to past generations. They have a living spirit of adventure and want the world to believe their travels as the most significant travels ever. The Marriott has increased its online presence in social media where they continuously post their offers and deals. They use online booking platforms to reach the online generation.

Millennials travel more than any other generation that is thirty-five days annually and advertising profoundly influences their process of decision making (Hospitalitynet. 2018). They enjoy a wider variety of trips which are inclusive of relaxing at the resort or beach, sight-seeing, leisure, romantic getaways, and visiting family. Millennials like the Gen Z are adventure seekers; the majority are seeking to have adventures in the outdoors and prefer the off-beaten road travel ends. They prefer an all-inclusive worry-free vacation involving taking naps on the coast and pampering themselves with spa treatments. Compared to any other generation almost seventy percent of millennials on their last trip put themselves up in hotels, but they budget less on hotels compared to Generation X. They and are majorly influenced by advertisements having likable imagery or deals and content that is informative. More than half of millennials are utilizing online travel platforms to book their travels followed by search engines like google and hotel sites (Hospitalitynet, 2018).

There are a few guidelines to consider on how to market to millennials effectively from Hospitality net. (2018...

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Strategic Management in Hospitality Paper Example. (2022, Oct 06). Retrieved from https://proessays.net/essays/strategic-management-in-hospitality-paper-example

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