MKT260 - International Marketing, Red Carnation Hotel

Running Head: INTERNATIONAL MARKETING 1
INTERNATIONAL MARKETING

INTERNATIONAL MARKETING 2
Introduction
Red Carnation is an luxury Hotel chain which offers quality services like accommodation, tours,
food and dine, spa and beauty, cruises across the UK and the Channel Islands, Ireland, South
Africa, Switzerland and the USA, and a country gastro-pub in Dorset. The Hotels came into
existence in the year 1950 in South Africa and later the company expanded to other locations.
The company core values are to consistently provide their customers with the best quality of
products and services. Through its strong core values and qualified employees the hotel has
become one of the luxury brands of hotel. The company in order to expand its customer base is
thinking to explore the opportunities for international expansion. This work carries out analysis
of the hotel market and recommends an international market for the hotel group to enter in the
year 2019. This work also develops an appropriate international marketing strategy for the hotel.
Factors that impact global hotels industry
The major factors that impact the global hotel industry are as follows:
a. Economic factor: the total expenditure by consumer on hotel accommodation is directly
related with GDP performance, thus economic downfalls naturally have the most
common and expanded effect on the hotel industry. In the period of recession a consistent
pattern is reflected by the Old trends across numerous regions (see Figure 1) (Alegre et al
2012).

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If the price sensitivity starts high then it means low in demand, tenancy ranks also
becomes low and hoteliers reduction prices to attempt to secure bookings. Recessions can
create many problems to hotel industry, it leave the industry at a risk and vulnerable
conditions to further disturbance from secondary shocks, as established by effect of the
Arab Spring.
b. Political Unrest & Terrorism: Trouble to hotel industry performance mainly concentrates
on locations directly facing political chaos and demonstrations. Terrorist attacks can
affect the hotel industry globally because the foreign travelers are afraid of these terrorist
attacks and threats by the terrorist groups. On the other hand mainly the local and
regional travelers can not discouraged by these types of threats and incidents. But due to
the security reasons and safety of people of their country the government can’t allow their
people to travel in such conditions.
c. Pandemics: The international hotel industry is also affected by diseases such as swine flu,
Ebola and SARS because of these diseases the government of many countries cannot
allow peoples of that country in which the viruses of these diseases is spread. For
Example in 2009 due to swine flu Mexico City verified a 50% decline in tenancy of the
visitors (McGuire 2015).

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d. Technology: many new and effective technologies are introduced in the hotel industry
and it affects much organization in hospitality. If new software related to the hotel
industry is not being used by the companies then competitors will take benefit and they
create problem in sustain. These new technologies and software’s are very useful in hotel
booking facilities and tour management. They are very useful in the rapid growth of the
company (McGuire 2015).
e. Changes in law and Tax rates: international hotel industry is also affected by tax rates and
changes in law. There is no control of hospitality industry on the government rules and
regulation regarding their workings and tourism department (McGuire 2015).
Internal business environment of Red Carnation hotel
Value chain
The Red Carnation hotel has 17 luxury boutique hotels and spas in South Africa, United
Kingdome, Ireland, Channel Islands, Switzerland and USA. The company emphasizes on the
values of giving warm and consistently excellent services to the customers, Value, respect and
support their staff and shareholders, and to be equally responsible for the development of
sustainable environment (The Red Carnation Hotel 2017).
The Porter value chain analysis for the company is as follows:
In bound logistics: The company has sound partnership with their suppliers and take proper care
in providing excellent quality of food and beverages, laundry services, cleaning and other
services. Inventory control, stock requisitions, back of the house storage and distribution,
transport facilities are all maintained to ensure that customers are feeling respected and satisfied.