Competitive Analysis of the Hotel Industry

This assignment delves into the competitive landscape of the hotel industry using Porter's Five Forces model. Students are tasked with analyzing factors like threat of new entrants, bargaining power of suppliers and buyers, and the intensity of rivalry to understand the industry's structure. The analysis should also incorporate market segmentation and brand positioning strategies employed by hotels to differentiate themselves in a crowded market.

Running head: Competitive strategy 1
Competitive strategy of Travelodge Hotel

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Contents
Introduction.................................................................................................................................................3
Travelodge...................................................................................................................................................4
Positioning...................................................................................................................................................5
Human Resource.....................................................................................................................................5
Target market analysis.............................................................................................................................6
Positioning in advertisement,...................................................................................................................6
Positioning in sales location....................................................................................................................6
Positioning through prices.......................................................................................................................6
Steps to an effective positioning strategy....................................................................................................7
Competitor positioning analysis..................................................................................................................8
Porter’s five forces model........................................................................................................................8
Bargaining power of Supplier..............................................................................................................9
Bargaining power of customers.........................................................................................................10
Threat of substitute products..............................................................................................................10
Threat of new entrants.......................................................................................................................11
Intensity of competitive rivalry..........................................................................................................11
Changed position.......................................................................................................................................12
Conclusion.................................................................................................................................................13
References.................................................................................................................................................14

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Introduction
Competitive advantages are referred as a condition which offers a company or country to
manufacture a good or service at a lower price for customers. This strategy allows company to
generate more revenues in a certain period of competition. It is an attributed to a number of
elements involving brand, distribution network, intellectual property, support from customer and
cost structure. It is a report which will focus on hotel of UK. It will be helpful to know the factor
of attaining the competitive advantages. The description will be made in this report about the
positioning of the organization to gain or maintained the competitive advantage. Along with that
marketing strategy of tour travel lodge will be mentioned including porter's five models, target
market analysis and positioning strategy. It will be helpful to make better understanding about
the competitive advantages. Competitive advantages give an edge over Rivals and capability to
produce higher value for a firm and its shareholders (Sutherland, 2014). It will describe the
position of travel lodge in the UK in recent years and the recommendation will be provided to
get success in next 2 to 5 years.

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Travelodge
Travelodge hotel is considered as a private company which maintains its business in the
sector of hospitality industry. It is the hotel which comes in the budget hotel sector and secured
third position in the queue of biggest hotel chain in the UK due to its higher number of bedrooms
that is 32600. There are so many facilities are provided by the hotel to the tourist such as free tea
and coffee, LCD, Wi-Fi connection and en-suite bathroom. The size of the room in the hotel is
wider in comparison of other hotel. The reviews of customers towards the hotel are good which
seems that it is liked by many tourists to stay. The staff of the hotel is very friendly and
supportive towards their client. It provides various menus in its restaurant which makes different
from other hotel. The main quality of this restaurant is that it is nearby lots of restaurant,
shopping centre and tourist place.
Figure 1: Travelodge
Source: (Travelodge, 2015).

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Positioning
Positioning is considered as a Marketing concept that determined what changes are
required to the organization for its product and services to its customers. In the context of
positioning, it builds an image for the services and product based on its targeted customer. This
plan is outlined by the organization to utilization of price, place, product and promotion. Strategy
of positioning demonstrates the efforts of marketing and facilities purchaser to move for the
product and services of the organization. The main focus of the Travelodge is on positioning and
to attain the more competitive advantages, Travelodge need to consider some concept such as
target market analysis, positioning in advertisement, Positioning in sales location and positioning
through prices (Baines, Crawford, Shaughnessy, Worcester, and Mortimore, 2014).
Human Resource
Human resource plays a crucial role in the hotel of Travelodge. It is required for the hotel
to hire the staff with qualification and provide them training in proper manner. the HR staff of
Travelodge need to give entire information, duties and responsibility about the hotel to the
potential or new hired staff. It would be helpful for the hotel because once customer get happy
from the services, they will definite come again. There is a software program of CRM hat would
be helpful to retain the customer and make the positioning of hotel effective. It is the software
which keeps all information about the customers such as birthdays and anniversary. By sending
them the greetings, it will remember them about the visited place. Customer feedback is also
vital for the hotel. Human resource need to take the feedback from the customers about the
services, it will make them feel valued.

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Target market analysis
The best initiation for positioning analysis is attaining knowledge about the Desire and
demands of targeted market. By providing the efficient product and services as per the demand
of the customers will be helpful for the organization to generate more revenues from the
competitive advantage (Cox, 2015). Travel lodge need to organize a marketing team for
developing a positioning statement which will facilitate organization to reach as much of the
target market as possible.
Positioning in advertisement,
Advertisement is the process to promote the particular product and services in the market.
Travelodge need to determine that on which they are targeting and what kind of client is being
met. The hotel should focus on the compatibility of the client while staying at the hotel. The
services of the hotel should be different from others so that it can attract many customers from
different areas.
Positioning in sales location
Positioning is important for the Travelodge to determine that what kind of distribution
channel they are choosing for promoting the services to the targeted market. To make better
Positioning, Travelodge should consider some places where the demand of tourism at higher
level, it would be helpful to make aware tourist about the place of travel lodge and their facilities
for the clients (Janiszewska, and Insch, 2012).
Positioning through prices
Price is an important element for the marketing strategy. It has been observed by the
Reserve that Travelodge is secure second positioning in budget hotel. For maintaining the

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positioning of the hotel, it can provide the different offers to the customer related to the services.
It would attract various travelers to stay in the same Hotel.
Steps to an effective positioning strategy
The broken steps will be helpful to keep the concept as simple as possible but it is
required a great deal of clarity and conviction to follow through. These steps will be helpful to
know about the clarity component, but in the case of conviction that should be progressed
internally if it doesn't already exist. It is essential for the marketers to know about the conviction
of the organization because this process from beginning to the end brings degrees of certainty
going ahead that cannot be substituted any other way (Sud, Friedrich, Adhikari, Taccone,
Mancebo, Polli, Latini, Pesenti, Curley, Fernandez and Chan, 2014). There are 6 steps that can
be followed by the Market Positioning.
Draft a positioning statement
The positioning statement will be helpful to travel lodge in the result of plugging those
actuality about the formula sentence structure and basic.
Compare and contrast to recognize your own uniqueness
It is required for the Travelodge to make difference between the messaging strategy and
the channel of communication, and all of your competitors disclose initiating in the target market
that positioning of Travelodge’s message should address.
Competitor analysis

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It would be helpful to Travelodge to determine the strength and weakness of its own
business which is measured against the competition. By knowing distinguishes between
organization and its competitor is Central to searching gaps in the selected market that can be
filled.
Determine current position
It is important for the Travelodge to determine its existing market position because it is
essential for the competitor analysis. It will give better idea about the positioning of the traveler
in the market so that it would be able to compete (Gbadamosi, 2013).
Competitive positioning analysis
It is considered as an accessory for the competitor analysis. Competitive positioning
analysis recognizes the situation of the market that impacts how much power competitors are
able to exercise (Rothaermel, 2015).
Make a different positioning idea
All above analytical data will be helpful for travel lodge and it has a better idea of who it is, what
is not and who its best customers are.
Competitor positioning analysis
Porter’s five forces model
Michael Porter define the five forces of competitive position analysis that decide the
intensity of competitive and effectiveness of a market which point out the place where are
remains in the situation of business. The competitive positioning analysis will be helpful for

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travel lodge to know the elements that affect profitability in the market where it desire to
compete. The analyzing data will also helpful for hotel to make decision concerning whether to
enter a certain industry or new market or not. Porter's five forces contain supplier power,
bargaining power of buyers, competitive rivalry, threat of substitution and threat of new entry
(Porter, 2008).
Figure 2: Porter’s five forces
Source: (Solomon, 2014).
Bargaining power of Supplier
It is required for Travelodge to determine about the availability of finance for the project
of hospitality. Skilled management and employees are necessary to compete with the
competitors. Travelodge has various competitors who have skilled management and able to
attract the customers. Competitiveness of food and beverage suppliers, energy and utilities can
be considered in the bargaining power of supplier. It has been analyzed that there is a huge
demand to increase the Global information and booking rooms and Restaurant capabilities in the
industry of hospitality (Yunna and Yisheng, 2014). In comparison of other industries hotels are

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not only subject to the bargaining power of suppliers and pressurize on their competitiveness. It
is required for the Travelodge to maintain a certain advantage of Cost over potential competitors.
Suppliers can get more bargaining power when their products are essential input in the success of
industry. The input of supplier is vital to the progress of the product and services of customer
such as local tourist operator.
Bargaining power of customers
It has been mentioned by porter that the purchase of goods and services from the industry
of hospitality may be strong if they are more focused in comparison of players in the same
industry and can reduce the prices as well as the margin of industry. The buyer can buy in a huge
volume from the industry, thus forcing down prices or enhance cost by demand for higher quality
product and services (Clark, 2016). The group of certain buyer has bargaining power as an
outcome of their focus on purchasing of hotel rooms. Domestic or International Airlines, tour
operators and huge customer are considered in that group.
Threat of substitute products
Michael Porter defined that substitute products is not existing product but also potential
product and services which have the capacity to perform the same function. Substitute products
are able to decrease the cost and provide the better quality performance which gives the result of
technological innovation. The industry of hotel in all major cities is not threatened by the
substitute product. There are certain changes such as domestic travel can take place of
international travel and specific destinations can take place of more expensive ones on first
ground. Thus, substitute products are able to perform the same function by reducing the court
and provide with effective services due to advance in technology (Dolnicar and Leisch, 2017). It

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has been analyzed that there is no threat of substitute to a hotel's product and services. Hotels can
have the powerful buyer if its strategy of marketing focuses on attracting tour groups.
Threat of new entrants
As per Michael Porter, threat of new entrants are demonstrated by barriers to entry that
involve scale of economy which involve scope and size of needed operations to attain the viable
cost structure and switching cost and customer loyalty which is build by quality and reliability.
Hotel industry as per global is differentiated by high capital cost and proportion of certain cost to
total cost. The scale of economy is considerable in the industry of Hotel. The high cost of capital
need in comparison the outside the hotel project should be arranged to gain the most cost
effective utilization of resources which should be applied to construction, equipment, finance and
Furnishing (Dobbs, 2014). Travelodge fill their rooms as profitably as can, both by levels of
room occupancy and applicable tariffs. There are two certain factors that are able to differentiate
themselves are attractive location for the targeted market and the service quality.
Intensity of competitive rivalry
Intensity of rivalry is based on the size and number of competitors and the balance
between competitors may lead Organization in the way of intense competition. It is done due to
the growth of business which is higher than the level of growth of the industry. The market share
of rivalry becomes intense in the condition of lower product differentiation and switching costs.
In the context of hotel industry, intense in certain cost specifically in Greater carrying cost
Industries. In the part of rivalry, Travelodge has pressure to sell capacity through cutting price
excluding holiday seasons and weekends. There are two kinds of barriers that is internal barrier
and external barriers. The main reason of external barriers occurs because of strategic,

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economical and political factors which attains competitors in the same industry (Dolnicar and
Leisch, 2017).
Changed position
The position of Travelodge has been changed and the new formation done in recent year
the improvement has been done in the form of wider rooms and restaurant facility. It provides
food facility to their customer and offer prices of room in the budget of customer. Recently, the
amendment is done in the Travelodge and its provide LCD and Wi-Fi facility to its customer.

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Conclusion
It has been concluded that competitive strategy is necessary for the growth of the
particular industry to attend the competitive advantages. Travelodge hotel has been taken in this
report to analyze the competitive advantages. Positioning is an important element for the concept
of marketing that describes what requirements are needed for the organization to its product and
service. It helps to develop an image for the services and product which is based on its targeted
customer. The certain step has been mentioned in this report to develop a market positioning. In
the context of competitive positioning analysis, five forces model has elaborated which contains
five forces model that is bargaining power of suppliers, bargaining power of customers, threat of
substitute, threat of New Market and competitive rivalry. The complete understanding has been
made in the context of porter's five models which will be helpful for further study and to know
about the competitive advantages in the term of travel lodge. To gain the positioning in the next
2 to 5 years, analyze the demand of the customers and make some amendment in a hotel.
Travelodge should offer the various packages and shake hands with airline and huge customers.
It would be beneficial for the clients when they will get all facility at one place such as food
facility, accommodation, rental car return facilities and many more. It will be facilitated to
maintain the positioning of hotel for a long period. Time flexibility should be there because it is
not necessary for the visitors to come as per the visiting time, flexibility in time would bring the
change in the hotel and most of the tourist who visit or arrive on odd time can prefer this hotel
due to its accessibility.

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References
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in political marketing: How semiotic analysis adds value to traditional survey
approaches, Journal of Marketing Management, 30(1-2), pp.172-200.
Clark, R.M., 2016, Intelligence analysis: A target-centric approach. CQ press.
Cox, A., 2015, Sourcing portfolio analysis and power positioning: towards a “paradigm shift” in
category management and strategic sourcing. Supply Chain Management: An International
Journal, 20(6), pp.717-736.
Dolnicar, S. and Leisch, F., 2017, Using segment level stability to select target segments in data-
driven market segmentation studies. Marketing Letters, pp.1-14.
E. Dobbs, M., 2014, Guidelines for applying Porter's five forces framework: a set of industry
analysis template, Competitiveness Review, 24(1), pp.32-45.
Gbadamosi, A., 2013, Principles of marketing: A value-based approach, Palgrave Macmillan.
Janiszewska, K. and Insch, A., 2012, The strategic importance of brand positioning in the place
brand concept: elements, structure and application capabilities, Journal of International Studies
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Porter, M.E., 2008, The five competitive forces that shape strategy, Harvard business
review, 86(1), pp.25-40.
Rothaermel, F.T., 2015, Strategic management, McGraw-Hill Education.
Solomon, M.R., 2014, Consumer behavior: Buying, having, and being (Vol. 10). Upper Saddle
River, NJ: Prentice Hall.
Sud, S., Friedrich, J.O., Adhikari, N.K., Taccone, P., Mancebo, J., Polli, F., Latini, R., Pesenti,
A., Curley, M.A., Fernandez, R. and Chan, M.C., 2014, Effect of prone positioning during
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Porter’s five forces, info, 16(5), pp.1-18.
Travelodge, 2015, Travel lodge discount for Christmas, Retrieved on 2nd October, 2017 from:
http://www.christmasdiscountoffers.co.uk/travel-lodge/.
Wang, R.D. and Shaver, J.M., 2014, Competition‐driven repositioning, Strategic Management
Journal, 35(11), pp.1585-1604.
Yunna, W. and Yisheng, Y., 2014, the competition situation analysis of shale gas industry in
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