Impact of eWOM on Hotel Consumer Behavior

This assignment explores the impact of electronic word-of-mouth (eWOM) on consumer behavior within the hotel industry. It delves into a review of relevant research, analyzing how eWOM influences customer decision-making processes. The assignment also considers strategic implications for hotels aiming to leverage the power of eWOM in today's digital landscape.

International Hospitality
Management
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TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................3
TASK 1............................................................................................................................................3
SWOT analysis of Marriott Hotel West India Quay ...................................................................3
PEST analysis for emerging market(Sri Lanka)..........................................................................4
Porters five forces analysis of emerging market(Sri Lanka).......................................................7
Market growth strategy for hotel.................................................................................................8
Implementation of strategy........................................................................................................10
Conclusion.....................................................................................................................................11
Recommendations..........................................................................................................................11
References......................................................................................................................................13
Appendices.....................................................................................................................................15
Porter’s Five Forces Analysis........................................................................................................15
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INTRODUCTION
International hospitality management is termed as managing a hotel or an event by
managing activities effectively and there by increasing experience of customer. Marriott hotel
west India Quay is leading organisation in the hospitality industry of London. The hotel
constitutes huegly to economic growth of UK. The organisation has popularity among its
consumers and have good brand image. Hotel is seeking for expanding its business in one of
emerging market of world. Present report covers Swot analysis of the Marriott hotel west India
quay to find out the strength opportunities and weaknesses and threats of the business entity.
Pestle and porters five forces analysis of Sri Lanka for hotel has been explained. Further more,
business and market growth strategy for the organisation is also illustrated. Moreover ,
implementation of best suitable strategy for hotel to expand its business in Sri Lanka has been
explained. Lastly recommendation and proper action plan which is to be followed by hotel is
illustrated.
TASK 1
SWOT analysis of Marriott Hotel West India Quay
Marriott hotel West India quay is leading hospitality organisation of London UK. It has
its branches in more than 122 countries (Mok, Sparks and Kadampully, 2013). Hotels has
reported revenue of $17 billion in the year 2016. Organisation has its headquarter in Maryland
US. It has approximately 6000 properties in 110 territories in world. The hotel provides stylish
guest rooms and best facilities to customers . It is one of the largest hotel in hospitality industry
globally. The organisation has many opportunities and weakness which can be identified using
SWOT analysis of Marriott Hotel.
SWOT analysis of hotel : SWOT analysis is a tool used to determine current market
opportunities and threats for an organisation. Following is the SWOT analysis of hotel:
Strengths: Marriott hotel west India quay is having reputed position in market and the brand is
very popular globally. The hotel has ability to gain position in local market. It has popular
brand image and organisation is famous among its customers. Organisation' internal control
system is very effective and well organised. The hotel use effective leadership style and have
skilled management staff. Its positive image and popularity makes it able to provide services
according to expectation of customers. Hotel is continuously implementing innovation and
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technical development in order to improve customer satisfaction . It has strong employee base
and having 200000 staff members worldwide. Hotel is upgrading its business constantly and
attaining good customer base. Further the strength of the firm is that it have highly skilled
employees who make innovative product and deliver high quality services to their customers.
Employee were provided training and development facility due to which there skills get
upgraded and they serve quality products. Further firm also motivates it employees which help in
increasing the productivity as well as profitability.
Weaknesses: The hotel does not concentrate on people who have middle class lifestyle and
cannot afford high priced hotels (Galliers and Leidner, 2014). Hotel provides service only for
people who have business class. The organization is ignoring need and expectation of middle
class customers. Due to this reason they are working in limited market and only with business
class people. The hotel is not able to diversified it services and due to that management is unable
to focus on needs of customers. Global expansion is also the weakness of the hotel. Due to
unavailability of advanced technology, firm need to pay high cost to employees. Along with this,
there are many competitor in market who sale same type of products and services at lower price.
Due to this reason firm unable to make huge profit by selling its products and services.
Opportunity: Marriott hotel is operating its business in more than 110 countries. The
management of hotel is bale to attain loyalty and trust for brand. Organisation has the
opportunity to get more revenue and profits (Dinnie, 2015). Operating in many countries is
giving opportunities to hotel to grow it business and revenue. Organisation is implementing
innovation in its services which is attracting customers towards it. Marriott is operating its
business in eco friendly manner. Organisation is also following sustainable development of its
business. It is creating opportunities for hotel to enhance it business. Marriott is currently
providing services for business class people and for tourist which is giving organisation and
opportunity to expand it business. Marriott hotel can adopt new technology so that it can reduce
the cost of production and deliver quality services to their customers
Threats: Terrorism in world and corruption politics is a big threat for its business activities.
Continuously increasing new organisations in market is also creating threat to the Marriott hotel
west India quay. For example Hilton hotel , Hotel Langham and star wood Hotel are present
competitors of Marriott hotel. Several international brands are also entering in market and these
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brands have strong brand image. This is a big challenge for venture to survive. Growth of the
organisation is also stagnate which is also a major threat for the hotel.
PEST analysis for emerging market(Sri Lanka)
Marriott hotel west India Quay can expand it business in Sri Lanka as it is the suitable
place for the organization. Sri Lanka is one of the emerging markets and it is hospitality
industry is growing very fast. Tourism and hospitality of the country contributes to 4 % of total
GDP. Hospitality industry of the country is expected to grow by US$140 billion at the ed of
2017. Hospitality industry is in top 10 sectors of Sri Lanka and is attracting large amount of FDI.
Government of the country is providing visa for tourist of selected countries in order to increase
tourism and hospitality industry (Altinay , Paraskevas and Jang, 2015). Sri Lanka is continuously
investing in tourism and hospitality industry. This sector is also generating employment in
country and ministry of tourism is also supporting industry to increase hospitality awareness .
Expanding and investing in Sri Lanka's hospitality industry would be profitable for Marriott
hotel west India quay. Possible issue which could be faced by hotel are analyzed below in
PESTLE analysis of Sri Lankan market:
Political issues: Political issue are referred as stability of government and current political
condition of Sri Lanka. Sri Lanka is largest democratic country in world. It political factors like
policies made by government and interest of politician largely affects the hospitality industry of
the country. Hotel and tourism industry are backbone of the country's government. If
government changes its polices and make amendments in rules then hospitality sector of Sri
Lanka would impact greatly. Hotel sector is generating large amount of revenue and government
of country is also supporting in development of this industry (Medlik ed., 2016). Terrorism is
also a major issue of concern in Sri Lanka . So Marriott hotel west India quay should consider
all these issue before expanding its business.
Economic issues : Economy of Sri Lanka is stable and it is attracting foreign direct investment
by encouraging tourism in the country. According to industrial reform policy it can be concluded
that flexibility in industrial licensing and advancement in FDI has supported country in
economic development. Economic issues involves rate of interest , taxation system and rate of
exchange. As per recent survey it is found that tourist in Sri LankaLanka are spending more in
hotel and hospitality. This is supporting hospitality sector of country to grow. Increased power of
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tourist is increasing demand of more hotels in the region. Luxurious hotels preferred by business
class are also in demand. This can be profitable for Marriott hotel west India Quay because it
focuses on business class people more than middle class. Sri Lankan economy has faced
minimal fall in comparison to other countries in world. This is supporting hotel to focus on
foreign tourists which is the biggest relief for the hospitality sector of Sri Lanka.
Social factors: Social issues involves changes in trends and lifestyle that can affect business of
any organisation. Changes in social value and trends affects the demand of hotels services and
products. Rate and price of product is very important issue for customers in Sri Lanka. Hotels in
country have to make services according to the social trend of people. Changes in demography
also impacts the social values of country. Population of Sri Lanka is diversified in various class
which makes hotels to structures the services according to class. So Marriott hotel west India
Quay need to concern these social issues and have to amend its policy of focusing only on
business class people.
Technological factors: Technological issues impacts largely on development of hospitality
sector. Sri Lanka has both 3G and 4G technology and taking steps in development of technology
in the country. Government of country is promoting technology development and trying to
upgrade its technical sector (Cantallops and Salvi , 2014). Technology is always considered to
reduce manpower and energy needed by workforce. Internet connectivity and Wi-Fi facility are
in demand of guests visiting the hotel. Since Marriott hotel has strong brand image when it
comes to technology. Being well developed in technology will support hotel to attract
customers of Sri Lanka. So organisation can take advantage of technology issue in country and
enter in hospitality industry of Sri Lanka successfully.
Legal factors: Legal factors involve laws, rule and legislations made by government of country
which can impact the business of any venture. Changes in laws and rules affects the hospitality
industry of the country to great extent. Sri Lankan government has amend many laws for worker
working in hospitality industry (Dinnie, 2015). Minimum wage law made by government of Sri
Lanka is impacting hotel industry of the country.
Environmental factors: Government of Sri Lanka is making some rules regarding safety of
environment .These rule need to followed by companies working in hospitality sector.
Legislations in recycling, decreased carbon footprint and eco friendly products are made which
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should be followed by Marriott hotel west India Quay (Dredge, Airey and Gross 2014).
Industrialization and urbanisation has impacted the environment to great extent and it is causing
harm to surroundings. Government is taking necessary steps to minimize air pollution problem.
Large amount of waste comes from hotels and this waste causes harm to environment. Some
rules and regulations have been made by local authorities to solve the problem of waste
management. So Marriott hotel before expanding ned to take these rules in account for success
full business operations.
Porters five forces analysis of emerging market(Sri Lanka)
Porters five forces analysis is too used to determine the current threats and power of
consumers and suppliers in market. Marriott hotel west India Quay to expand its business in Sri
Lanka should consider these threats and power for successful business operations. Analysation
of these factors is as follows:
Threat of new entrants: Threat of new entrants is high in the hospitality industry of Sri Lanka.
There is very high competition among the existing hotels in the sectors. In this condition any
new entrant can change the existing company's customers loyalty (Sharpley and Stone, 2014).
Many foreign hotel chains are entering in Sri Lankan market to increase their brand popularity.
Brand loyalty of existing hotel like can impact the Marriott hotel's business in Sri Lanka. Cost
of land in the country is high which is the major problem for any new comer to enter in
industry. Sales tax and luxury tax on hotel bills is also very high in country which restricts the
new entrants to get place in hospitality sector. There is always a force on existing organisation to
make adjustments if any new entrant comes in the industry.
Consumers bargaining power: This power of consumers identifies to which extent a customer
can impact the business of any organization. Customers of Sri Lanka have tendency to get
attracted to lower price services and products. Customers have high power in this industry to
change the services and product of hotel according to their needs. If the hotel service prices are
of moderate level then customers becomes price sensitive. Many suppliers available in the sector
are providing information to customers about suitable options in hotel. Due to that reason
customers are known of everything about the hotel prices (Mohammed, Guillet and Law, 2015).
Hotel is trying to reduce power of customers by providing discounts and various kind of
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offerings. Marriott hotel west India Quay have to consider power of consumers in Sri Lanka to
implement its business activities.
Supplier's bargaining power: Supplier's are defined sources who provide good and services to
hotels. They have large control in the hospitality industry. Though suppliers have high power in
the sector yet they need to reduce their power of bargaining to gain customers attention.
Customer of hotel in the region are distributed and prefers hotel which provides services at
moderate price. Due to this reason supplier have to reduce their power to bring more customers.
Big hotels and in the country have good brand image and they do not rely on suppliers.
Marriott hotel west India Quay has its own brand image and can take advantage of supplier's
power.
Threat of substitute: Substitution threat arises when there is availability of lower priced
products in market. Existence of alternatives makes the threat of substitution the hospitality
industry (Lu and Stepchenkov, 2015). There are various local and foreign hotel chains are
working the hospitality sector of Sri Lanka. Threat of getting substituted by any other
organisation is high for Marriott hotel west India Quay. Present hotel in sector have potential to
attract customers and hence sales of other hotel reduces.
Competitive rivalry: Rivalry among existing organisation in the hospitality industry of Sri
Lanka is relatively high. Every hotel in the sector is competing to attract more and more
customers. In this industry it easy for consumers to switch from one hotel to the other. Cost of
switching is very low thus customer can change their priority any time. This is making high level
of rivalry among existing organisation in hotel sector. New entrant in the industry are
providing all the services like internet facility and other technological services. This is increasing
competition among the hotels in the sector.
Market growth strategy for hotel
There are various strategies that hotel can use to expand its business in Sri Lanka.
Following are the strategies for Marriott hotel west India Quay:
Porters generic strategies: Strategies defined by Porter's can be used by organisation to make
strategic plans to implement its business operations. Porters strategy has three parts which are as
follows:
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Cost leadership strategy : This strategy focuses on making low cost products and services.
Making low cost products helps hotel to attract customers towards it. In this strategy business
entity reduces cost by increasing profits and this is done by charging average cost. Marriott
hotel west India Quay can try to increase its market share by providing services at low cost
(Law, Leung and Fong, 2015) . Th hotel can still make profits by reducing cost.
Differentiation strategy : In this strategy organisation makes products which are different form
others. Hotel can make its services by making amendments in existing services. In hospitality
industry differentiation form other is very necessary to survive in sector. To implement this
strategy Marriott hotel west India Quay need to innovate and provide high quality services.
Hotel should promote inst services effectively so that industry get to know about the uniqueness
of organisation.
Focus strategy: In focus strategy organisations only focus on particular market so that it can
understand requirement of consumers in specific market. This strategy helps business entities to
build strong consumer loyalty in brand. This strategy reduces competition by focusing in single
niche markets (Zhou, Ye, Pearce and Wu, 2014).
Marriott hotel is using focused strategy for entering into Sri Lanka, it is one of the effective
strategy as it concentrate on narrow segment and with this segments it become easy to achieve
differentiation and cost advantage (Brenes, Montoya and Ciravegna, 2014). With the help of this
focus strategy Marriott hotel can increase high degree of customers loyalty. This focus strategy
have lower volume because it focus on narrow segment. Further bargaining power with supplier
is less. On the other side if Marriott hotel pursued a differentiation focus strategy then it can
charge higher cost from its customers in Sri Lanka.
Through this organisation can achieves success in focus strategy then it can easily tailor a
broad range of products and enhance its strength. There are so many risk which are associated
with focus strategies that is limitation and few changes in target segments (Tansey , Spillane and
Meng, 2014). It focus on core competencies which lead to create barrier in entry. If there is large
number of buyer then Marriott hotel cannot negotiated because of alternatives are available at
Sri Lanka.
The focus differentiation strategy can provide unique characteristic which fulfil the
needs and demands of a narrow segment of market. This focus differentiation strategy used the
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efforts on a particular sales channels that online selling products etc. it have unique features
which attract a large number of customers. There are some benefits of focused strategies that is
Marriott hotel can charge high price because of its unique feathers of products and services.
Along with this it become difficult for other firm to enter into a market and compete with other
firm who followed a focus strategy. On the other hand, there are some disadvantage of focused
strategies that is limited demand of products and services. It help in building the strong
relationship with the target market in Sri Lanka because here firm listened to needs and wants of
its customers (Adner, Ruiz-Aliseda and Zemsky, 2016). Due to this buyer feel strong affinity for
particular brand and are loyal for company. Hence it can be stated that focus strategy is one of
the key success of the firm.
Implementation of strategy
For successful expansion of Marriott hotel west India quay, it can use porters generic
strategy. This strategy can help hotel to expand its business operations in Sri Lanka. It provides
a proper way for business to focus on specific industry. Focused strategy is best for hotel which
focuses on generating profits by reducing cost (Dinnie, 2015). For implementing this strategy
organisation need to allocate resources to management of hotel. Proper action plan should be
made by hotel management staff to implement this approach .Duties and responsibilities should
be divided among employees so that they can do their work accordingly. Deadline should be set
by hotel management to implement the approach successfully. Organisation need to define its
objective for successful establishment of strategy so that it can get place in hospitality industry
of Sri Lanka. Hotel by using focused strategies can make more profits and increase it brand
image in Sri Lanka. Marriott hotel need to make its product of unique features so that it can keep
the price of its product high. Hence, can be stated that through implementing focused strategy
firm can easily grab the attention of large number of customers. Further it can easily keep high
price of its products because it have unique products and services.
CONCLUSION
Summing up the above report it can be concluded that hospitality industry is growing at
faster rate. Hotel and business entities working in this industry are required to expand their
business in order to increase profitability. Repost concludes that Marriott hotel west India Quay
can expand it business in Sri Lanka. There are various opportunities available in Sri Lanka
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which can be fruitful for hotel's successful expansion. Pestle and porter's five forces analysis
evaluates that Sri Lanka has good economic strength and proper customer environment for
expansion of hotel business. Many foreign hotel chains are expanding their business in Sri Lanka
and generating revenue. Marriott can also take advantage of these opportunities available in Sri
Lanka. Various market strategies for hotel has been evaluated which concludes that hotel can
follow these strategies to get success in expansion of its business operations.
RECOMMENDATIONS
It is recommended that new business of Marriott hotel west India quay can expand in Sri
Lanka. Hotel can start its operation by taking various opportunities available in the country.
Hospitality industry of the country it is growing at faster rate and it is very profitable for hotel to
choose Sri Lanka for starting business. Organisation should analyse market of the country
properly for successful implementation. Hotel need to follow the current rules and norms made
for hospitality industry. Environment of the country is also suitable for hotel's business
activities. Hotel need to provide services according to customers need and expectations .
Organisation should give services which are affordable for Sri Lankan consumers. For
successfully expansion in the country hotel should follow cost leadership strategy to attract more
consumers towards it. Customers of Sri Lanka gets attracted to lower price products and
services, so this strategy could be effective for hotel. Organisation need to define its objective
for successful establishment of strategy so that it can get place in hospitality industry of Sri
Lanka. Business of hotel would be successful in the country if it works according to the
strategies.
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REFERENCES
Books and Journals
Adner, R., Ruiz-Aliseda, F. and Zemsky, P., 2016, January. Breaking Trade-Offs: When is
Dominating from the Middle a Winning Generic Strategy?. InAcademy of Management
Proceedings (Vol. 2016, No. 1, p. 16580). Academy of Management.
Altinay, L., Paraskevas, A. and Jang, S.S., 2015. Planning research in hospitality and tourism.
Routledge.
Brenes, E. R., Montoya, D. and Ciravegna, L., 2014. Differentiation strategies in emerging
markets: The case of Latin American agribusinesses.Journal of Business Research. 67(5).
pp.847-855.
Cantallops, A.S. and Salvi, F., 2014. New consumer behavior: A review of research on eWOM
and hotels. International Journal of Hospitality Management. 36. pp.41-51.
Dinnie, K., 2015. Nation branding: Concepts, issues, practice. Routledge.
Dredge, D., Airey, D. and Gross, M.J., 2014. The routledge handbook of tourism and hospitality
education. Routledge.
Galliers, R.D. and Leidner, D.E., 2014. Strategic information management: challenges and
strategies in managing information systems. Routledge.
Law, R., Leung, R. and Fong, L.H.N., 2015. Distribution channel in hospitality and tourism:
Revisiting disintermediation from the perspectives of hotels and travel agencies.
International Journal of Contemporary Hospitality Management. 27(3). pp.431-452.
Lu, W. and Stepchenkova, S., 2015. User-generated content as a research mode in tourism and
hospitality applications: Topics, methods, and software. Journal of Hospitality Marketing &
Management. 24(2). pp.119-154.
Medlik, S. ed., 2016. Managing tourism. Elsevier.
Mohammed, I., Guillet, B.D. and Law, R., 2015. The contributions of economics to hospitality
literature: A content analysis of hospitality and tourism journals. International Journal of
Hospitality Management. 44. pp.99-110.
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Mok, C., Sparks, B. and Kadampully, J., 2013. Service quality management in hospitality,
tourism, and leisure. Routledge.
Sharpley, R. and Stone, P., 2014. Contemporary tourist experience: Concepts and consequences
(Vol. 27). Routledge.
Tansey, P., Spillane, J. P. and Meng, X., 2014. Linking response strategies adopted by
construction firms during the 2007 economic recession to Porter’s generic
strategies.Construction Management and Economics. 32(7-8). pp.705-724.
Veijola, S., Molz, J.G. and Höckert, E., 2014. Disruptive tourism and its untidy guests:
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38.pp.1
Online
Marriott hotel .2017. Accessed through<http://www.marriott.com/>[Accessed on 6th June2017]
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APPENDICES
SWOT analysis
Porter’s Five Forces Analysis
Ansoffs matrix
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Porters generic strategies
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