Hospitality Management Simulations

This report focuses on the current position of the Hyatt hotel chain in the market of hospitality industry and the challenges faced by various hotel groups. It also explores the theoretical models of Pestle analysis and Porter five forces.

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Hospitality Management Simulations
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Executive summary
This report focuses on the current position of the Hyatt hotel chain in the market of hospitality
industry. This report is also focusing on the challenges faced in this hospitality industry by
various hotel groups. This report is also focusing on the two theoretical models which are related
to the business environment which are Pestle analysis and Porter five forces.

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Table of Contents
Executive summary.....................................................................................................................................1
Introduction.................................................................................................................................................3
Porters Five Forces......................................................................................................................................3
PESTEL.......................................................................................................................................................5
Conclusion...................................................................................................................................................6

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Introduction
In order to explore the business environment of an organization, strategic exploration/analysis
plays a very important role. Therefore for every organization strategic planning offers the
possible opportunity to remain sustainable in this dynamic business environment by attain the
major share in the market. The main purpose of this report is to understand the current position
of the Hyatt hotel in the competitive market of hospitality. Hyatt hotel is among one of the
largest chain luxury hotels which offers resorts, vacation services (Hyatt, 2019). Hyatt hotel
group came into existence on September 27, 1957, and is having 777 properties in almost 54
countries. In this report, Pestle analysis and Porter`s Five Forces Framework are considered as
the two theoretical models to explore the market environment of the Hyatt hotel chain group.
Porters Five Forces
Industry
rivalryBargaining power of
customer
Bargaining power of
supplier
Threat of substitutes
Threat of entry

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Bargaining power of buyers
Due to globalization, more numbers of hotel have made their presence in this hospitality market
which has actually given an upper hand to the customer in selecting hotel of their choice. As a
result of this, bargaining power of potential buyers has increased. In addition, customers taste
and prefer have also changed which has actually displayed a challenging situation for Hyatt hotel
chain on the global level (Ormanidhi & Stringa, 2008).
Bargaining power of suppliers
In this case, situation is exactly opposite due to the availability of larger number of suppliers in
the market because of which the bargaining power of supplier is low. The ingredients which are
being provided by the suppliers are now very easily available in the market. Availability of large
number of suppliers in the market helps the hotel to switch cost related things.
Threat from new entrants
Due to advance technology, many new small businesses are entering in the hospitality business
with the help of online service platform which is display good amount of indirect challenge to
Hyatt hotel business (Tavitiyaman, Qu & Zhang, 2011). Even though the challenge is not very
big but it cannot be neglected. In addition, there are many new hotels which are displaying threat
like situation for the Hyatt hotel chain through their unique business model.
Industry rivalry
Hospitality business sector is considered as one of the growing business in the world and hence
every company is trying their luck in this sector which has ultimately increased the overall
competition and decrease the profit share. In addition, there are many hotels which have formed
their own brand value such as Hilton, Golden leaf, Apollo and so on. These hotels have a very
strong customer base in Australia as well as on the global level. Hilton hotel is considered as one
of the best hotel chains in offering high-quality customer service on the global platform.

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Threat from substitute
Threats are not only related to direct competition but it is also related to indirect competition.
There are many small restaurant and hostel lodges which are displaying an indirect threat to
Hyatt hotel business (Vining, 2011). In addition, awareness about healthy life has forced many
potential customers to change their taste and preference related to their eating habits and living
standards. Many supermarkets are offering such health-conscious product which customers are
looking for.
PESTEL
Political
This factor is connected with the rule and regulation of the business which has been established
by the ruling government of the country. In many cases, it has been seen that many political
conferences and meetings are being held in Hyatt hotel which is offering them a remarkable
growth. In addition, Australian governments also understand the importance of hospitality
industry and are offering their full support to this business sector.
Economic
Australia is considered as one of the developed countries of the world with a GDP of around 3%
in 2018. In addition, Australia is having a huge market of around 71.7 million in 2019 (UAC,
2019). As per the study, it has been found that Hyatt hotel chain contributes a lot in the
development of Australia by offering employment, high social value and so on (Yüksel, 2012).
In addition, the purchasing power of the citizen is high as compared to other countries which
make Australia an economically stable country.
Social
Australian people are very conscious about the impact of any process on society because they
have become very sensitive towards the social environment. Even government in Australia
understands the importance of safe and healthy society and offering full support in the form of
free environmental education programs in order to make common people aware about the

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environment safety (Issa, Chang & Issa, 2010). Hyatt hotel has made a remarkable present in this
section by offering green operation in their hospitality business.
Technological
Australia is considered as the home for various new innovations and is offering a great amount of
smart technology support to enhance the development of the country especially in hospitality
business of the country (Kremer & Symmons, 2015).
Environmental
Australian government has introduced environmental protection law according to which every
single hotel operating on the soil of Australia have to follow standard air toxic standard.
According to this law, every single business associated with hospitality industry has to disclose
the amount of carbon emission and product waste at the end of the year.
Legal
Hyatt hotel has to follow all the rules set up by the current government in every country in which
they are operating such as consumer rights, ownership association, and entertainment law. In
addition, there are some policies in the law according to which the Hyatt group have to invest
some percentage of their profit in solving the social issue of the country in which they are
operating because government reach has some limits.
Conclusion
Competition in hospitality industry is very high and therefore it is very challenging for any hotel
organization to survive for a long time without having some unique business strategy. Hyatt
group has understood the dynamic business environment and hence are working on green
business operation in order to attain a unique image in the eye of the community in which they
are operating.

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Reference
Hyatt. (2019) About us [online]. Retrieved from: https://about.hyatt.com/en/hyatthistory.html.
Issa, T., Chang, V., & Issa, T. (2010). Sustainable business strategies and PESTEL
framework. GSTF International Journal on Computing, 1(1), 73-80.
Kremer, P. D., & Symmons, M. A. (2015). Mass timber construction as an alternative to concrete
and steel in the Australia building industry: a PESTEL evaluation of the potential. International
Wood Products Journal, 6(3), 138-147.
Ormanidhi, O., & Stringa, O. (2008). Porter's model of generic competitive strategies. Business
Economics, 43(3), 55-64.
Tavitiyaman, P., Qu, H., & Zhang, H. Q. (2011). The impact of industry force factors on
resource competitive strategies and hotel performance. International journal of hospitality
management, 30(3), 648-657.
UAC. (2019). Tourism and hospitality industry of Australia [online]. Retrieved from:
https://www.uniassignment.com/essay-samples/tourism/tourism-and-hospitality-industry-of-
australia-tourism-essay.php
Vining, A. R. (2011). Public agency external analysis using a modified “five forces”
framework. International Public Management Journal, 14(1), 63-105.
Yüksel, I. (2012). Developing a multi-criteria decision making model for PESTEL
analysis. International Journal of Business and Management, 7(24), 52.

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