Strategic Planning for Hospitality Industry

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Added on 2020-01-07

Strategic Planning for Hospitality Industry

Added on 2020-01-07

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Strategic Planning for Hospitality Industry

Table of ContentsINTRODUCTION............................................................................................................1TASK 1.............................................................................................................................11.1 Identification of the external and internal factors that impacts the performance ofCoach House Hotel................................................................................................................1PESTEL Analysis:....................................................................................................1Porter’s Five Force Analysis....................................................................................4SWOT Analysis........................................................................................................51.2 Generating and evaluating strategies to expansion or downsizing needs in ahospitality organization..........................................................................................................5Generic Strategies.....................................................................................................6Alternative strategic directions.................................................................................6Alternative strategy implementation methods..............................................................71.3 Implementation of the chosen strategy and critically evaluating the effectivenessof the strategy in the context of Coach House Hotel.............................................................7CONCLUSION.................................................................................................................9REFERENCES...............................................................................................................10

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INTRODUCTIONThe Coach House Hotel is well established business which specializes in the provisionof accommodation services since 1960s. John and Mary are the current owners who arepassionate and enthusiastic entrepreneurs with great family support. By providing hospitalityrelated services, Coach House Hotel has captured a considerable market from corporateentities and individual customers of the locality as well as outside visitors. Currently, thesecustomers are provided with the accommodation services offered at the property on a regularbasis. While breakfast is served in the morning, customers take up catering serviceselsewhere during lunch and again the dinner is provided at the hotel which may causeinconveniences to some clients. There are also scenarios where the business is unable to meetthe capacity requirements of corporate clients and big marriage functions. This has promptedthe management of the hotel to come up with a strategic solution to address issues. The business intends to achieve this by expanding in terms of capacity and offeradditional new services. The new services and facilities shall include a bigger restaurant andcatering unit, conference facilities, bigger function room and additional rooms for theprovision of accommodation services. The additional staff may be required to manage theexpanded business to relive some burden off the owners to managerial people so that ownersare not engaged in day-to-day activities and focus more on strategic and corporate issues.Apart from this, additional staff at operational level will be required to meet the needs of theimproved business. This assignment report will start with identifying the external and internalfactors which affect the performance of the hotel. The next part will deal with evaluatingseveral strategic options available for the hotel to deal with its issues and finally theimplementation guidelines will be analysed. TASK 11.1 Identification of the external and internal factors that impacts the performance of CoachHouse HotelPESTEL Analysis: The external environment analysis is conducted in order to identity the opportunitiesand threats of Coach House Hotel. It will include analysis of the external environmentthrough PESTEL framework with regards to political, economic, social, technological andlegislative factors in the UK that are within the context of the identified business opportunity.1

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Political factors: Rational and encouraging association with UK Government has broughtHospitality Industry to play a significant role in economic development in the country.Hospitality is the fifth largest industry in the UK which provide employment to around 3million people and contributes over £35 billion in gross tax revenues. As the generator ofeight per cent of total employment, the industry is ahead of the financial services, transportand communications, and constructions sectors (CHRISTIAN, 2015). The UK governmenthas established a regional growth fund for hospitality industry which is also a major sign ofexpected growth in the sector. As a result, hospitality generates more than 250,000 additionaljobs across the UK by 2020 bringing the total number employed by the British HospitalityIndustry to 3.2 million. While these changes have resulted in the empowerment of businessesand the general livelihood of people, an increased level of competition in the industry can benoted (Evans, 2015). However, the major political factors that could affect Coach House Hotel are the dangerfrom terrorism incidents, international relations and the political climate in popular touristdestinations. The biggest threat is terrorist attack or military conflict that could disruptinternational air travel or even may frighten people to travel to the UK. Incidents such as theSeptember 11 attacks in 2001, the downing of Malaysian Airlines Flight MH17 by a missilein July 2014, and recent attack on the UK parliament house in 2017 increase tensions amonginternational visitors (Harrison and Enz, 2005). The rise of aggressive new terroristorganizations such as ISIS make such events more likely in the future as a result, any drop inair travel would decrease the demand for hotel rooms. Another danger Coach House faces isthat any terrorist attack may target local tourist sites or directly the hotel. There have beenmany evidence that terrorists may target hotels and tourist sites; as in 2008 Mumbai attack inIndia terrorist targeted the Hotel Taj, in 2015, 39 people were victimised at a hotel beach inTunisia from the terrorist attack. Such attacks could hurt the Hotels by scaring away potentialguests and creating the need for costly security measures (Hasek, 2007).Economic factors:The hospitality industry comes under the tourism services sector, which iscurrently among the fastest growing sectors in the Europe and especially the UK’s economy.Tourism has the highest contribution to the economy at both national and local level. Thehospitality industry positively impacted by the low inflation and interest rates however,overall global economic downturn distresses the individual consumption and purchasingpower which negatively affects the hotels business. At present, the high inflation rate andinterest rates cut the traveling volume by visitors, which in turn negatively effects the overallhotel demand. Moreover, the rising prices of fuel over the last couple of years negatively2

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