Strategic Planning for Hospitality Industry

This document discusses the strategic planning for the hospitality industry, focusing on the analysis of appropriate factors for implementing a chosen strategy, research on creative business strategies for future competitiveness, and evaluation of performance metrics. The case study is based on CitizenM Hotels, operating in North America, Europe, and Asia.

Strategic Planning for
Hospitality Industry

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
P1 Analysis of appropriate factor to be implemented for chosen strategy.................................1
P2 Research of creative business strategies for organisation's future to be competitive in
hospitality industry......................................................................................................................3
P3 Evaluation of different performance metrics.........................................................................5
CONCLUSION................................................................................................................................7
REFERENCES................................................................................................................................8

INTRODUCTION
Strategic planning typically focuses on long term goals and gives basic strategies for
achieving those goals and objectives of company (Usoro and Abiagam, 2018). Its main purpose
is to set overall aim for business and according to that develop a plan which will help managers
to perform their activities . The plan may involve day to day activities and operations which
needs to be achieved on time and head towards the goals step by step. The organisation selected
for this report is CitizenM Hotels, which are operated in north America, Europe and Asia. It is
embraced with international style with large windows of glass cladded with black metal exterior
walls. The report focuses on analysis of appropriate factors which can be implemented in
franchising, creative business strategies which can be chosen for organisations future strategies
to be competitive in hospitality industry. Apart form this evaluation of different performance
metrics like critical success factors, performance indicators and balance scorecard have also been
covered.
TASK 1
P1 Analysis of appropriate factor to be implemented for chosen strategy
There are many of the factors which are there to be implemented for the chosen strategy
which should be there for effective strategy. Where franchising is one of the most important one
which can help in growing the business of the hospitality business for the higher productivity
and the profitability. There is the description which should be there for applying it with an
effective manner which can help in increase the business and the profit. Franchising is the one
which is having the brand value of the other brand which is having higher brand value and to use
their name for growing of your business which can help in getting the higher number of customer
base and can help in getting the higher profit with getting large business. This can help in getting
advantages over the competitors. For the CitizenM Hotel there is selection of strategic option is
Franchising.
There are some of the significance or values which are there due to having this strategy for the
business strategy are discussed further.
 Brand Recognition- This is one of the significance of having the franchisee of the
popular brand with related industry. It is one of the greatest asset of a franchise that brand
is already recognised in marketplace. This gives company chance to acquire good
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customer base which is already introduced to company's services and products. It has
been seen that building trust with customers may take years for some companies while
for some companies it may take months. For CitizenM Hotels it is advantage that it has
already been well recognised in market of many countries, so it will be easy for them to
operate at new place (Zopiatis, Theocharous, and Constanti, 2018). With this it has
benefit that company do not have to make much efforts on promotional activities. As
customers well aware about the brand, company can lead in its competitive environment
easily. The more recognition received by company can build that brand more effectively.
 Profitability- Due to having the franchisee of the popular brand allows you to get the
large number of customer base in just few time which allows one to get the higher
business and in response to get high profitability. Company needs to make sure that
business will achieve its financial results necessarily to sustain in short term and create
financial resources for long term (Minor and Bratec, 2020). As company has to make
significant investments and take risk they need to earn substantial returns. When the
profitability is confirmed, company needs to conduct own analysis on the financial
resources to determine requirement of getting into franchise or not. For CitizenM Hotels
needs to make sure with its other franchisees that they are able to achieve their revenues
and profits aims properly. Once it is known that franchisees are able to attain those
objectives, company needs to analysis its financial position and determine that capital
required for buying franchise.
 Sustainability- The franchise needs to survive in new market apart from being
financially feasible. For this propose the company can analysis the potential growth of
other companies which are operating in the desired location of company. As the objective
of every organisation is to operate its activities in any market for long term and survive as
long as it can. For CitizenM Hotels it is necessary to analysis the marketplace first were it
wants to franchise its business. Although the strategic manager have enough potential to
recognise the sustainability of any market but it is important to focus of the growth
opportunities in targeted market.
 Clear market position- For franchisee of every company that is the franchisor sets the
structure of its business which needs to be followed by every franchisee it has. When the
market position and its customers are defined it can target the market properly. It
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involves different steps which help in establishing brand image with identification of
company to generate awareness amongst its customers. To implement this franchising
strategy, the strategic managers of CitizenM Hotels needs to evaluate the market position
of company which would help in gaining customer attention to make business survive in
market (Maharjan, 2020). Once the market position is evaluated, the franchising structure
of company can be managed with addition to perception of brand.
 Working staff- To make company work properly the staff plays vital role for this part. It
is necessary that the employees and managers have proper knowledge about the work
procedure of organisation and other such informations of their work. Many times it has
been seen that strategies can fail because of the dispute with workforce which many arise
due to lack of commitments and trust. So, CitizenM Hotels needs to ensure that its
workforce has adequate presence and has full knowledge which can be delivered by them
to company's customers (Van der Wagen and White, 2018). The staff members are the
people who directly have connect with the people visit the hotels that is why it is
necessary that they have those qualities to address them properly as it represents the
image of company.
 Resource management- To have successful franchising strategy, it is important to
allocate the resources of company properly. The resources which are required in
implementation of strategy by company can be human resources, financial resources, and
others. It is duty of mangers in CitizenM Hotels to ensure that while implementing
franchising strategies, that resources are properly allocated and utilized which are within
the organisation and there lesser need of investing more on such resources.
P2 Research of creative business strategies for organisation's future to be competitive in
hospitality industry.
Business strategies are combination of the decisions which are taken and actions
performed by company to achieve goals and aims of business and to acquire competitive position
in market. Like every business, in franchising also strategy formulation is important it helps in
managing and goals. When the company makes proper strategies for managing the working of
company it would increase productivity and changes due to franchising can be minimized. The
business strategies which can be implemented by CitizenM Hotels which may help in obtaining
the competitive advantage for its future franchising strategies are discussed below:
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 Focus over three decision lens- It is shift from common corporate structure in paradigm
form. Basically, the leader who is on the top of pyramid governs the team member and
trickles down the employees and then customers of company. As franchising is a unique
model to carry out the business, franchise owners are primarily independent business
operators not the employees of company. With the help of upside down pyramid strategy,
CitizenM Hotels can flip the model by placing leaders at bottom and make them bear the
weight of company infrastructure (Ogbu Edeh PhD, 2020). Company then needs to view
more its customers and support them accordingly.
 Improvement in customer services- It is really important factor that business focus on
improving the services which may attract the attention of more customers. With the help
of improved services the competitive advantage in market (Sapovadia, 2019). Many
times customers face problem in selection of hotels and them book hotel which may fit
into their desires. That is any while franchising its business, CitizenM Hotels can analysis
the ongoing situation of the companies and according to that make changes in its services
which can fulfil desire of targeted customers.
 Use of new technology- Now a days apart from the services and infrastructure of hotels,
people tend to look for the technological tools and techniques used by organisations.
Lifts, Wi-Fi facilities, intercom services, and such other things which can make the daily
activities much easier. But adopting this changes in technology may be not possible at
every location. Before franchising, CitizenM Hotels need to evaluate the technological
sources which can help enterprise sustain in the competitive environment. Innovative
techniques like robots can be used for room services, chatbots can be also be used and
other options which can make company stand out in its competition.
 Maintenance of quality and hygiene- People are getting conscious about their health
day by day. They focus on having quality food with quality rooms which are hygienic
enough. These people look for those hotels which provide the facilities which fulfil their
desires of quality rooms which are highly hygienic. Selected organisation can get it as an
opportunity and work on providing quality services to people. Although it is not only for
people how are conscious about health needs to be treated like they want, but to get
highlight amongst the competition the company can adopt this strategy while it is
franchising its business.
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 Pricing strategies- It refers to the ways which are used by companies to price its
products and services. The bases on which the prices are set by companies are
production, labour, advertising and many more. Well all these are general pricing
strategies which every company follows to get the prices of its different units but when
the company has opted the to franchise its business than it has to bear other prices also.
Mainly while franchising the business company has to cover some costs like general
office equipments, industry specific equipments, inventory and much more. So, to
perform in its competitive market CitizenM Hotels needs to focus on pricing of its
services and the expenses which its going to bear while franchising. In starting to sustain
and settle down in the competitive market it can provide its services at lower prices and
then according to change in some factor can change its prices.
The strategies which are stated above can be good enough for the selected company but
some strategies have to be changed according to place where it is franchising its business. It is
important that strategic managers keep eye over the change in factors and accordingly formulate
the strategies (Elbanna, Andrews, and Pollanen, 2016). These plan of action are not mainly
necessary for achieving only the competitive advantages only, with the help of these schemes the
company can attain other factors also.
P3 Evaluation of different performance metrics.
Performance metrics can be defined as the process of collecting, analysing or reporting
the information which is related to performance of any individual, group or system. It can be
used to measure the performance and behaviour of company. Performance metrics are the ways
through workforce evaluated according to their targets accomplished. It can be effectively
provide information with yields the outcomes and measures identified quantities to permit further
improvements. The departmental leaders of CitizenM Hotels can use performance metrics and
evaluate the performance of employees and the staff members. The various kinds metrics which
can be adopted in the hospitality industry to effectively track business process are as follows:
 Critical success factors- It is an element for management team of any organisation to
achieve its objective in efficient and effective manner. The management term gets help to
measure and monitor its strategic decisions of an organisation. It is necessary to identify
the “key indicators” that will be helps the manager to plan, manage and control about its
duties. The method is based on the managers need to identify and control, oversee its
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strategies, in timely manner. It is typical to store, gather, make information required for
decision making. The critical success factor of CitizenM Hotels is acquire its market
share and generate profits and to make sure that the employees are were about the
objectives of company. However, critical success factor may allow institutions to mainly
focus on the identification of its objectives. It can also evaluate the identification of
wrong success factors do not damage the working of organisation. The business many
mainly emphasis on generating profit but it can not ignore the debt on long term bases
which many result in difficult situations. In context to CitizenM Hotels need to have
some of the competitive advantages over their competitors which are there in the
hospitality industry which is by performing well along with effectively and efficient
in providing the one of the best services to their customer which can help in getting
more and more businesses along with profit. This may also help in creating
awareness which is word of mouth which can be one of the best strategy for the
business as in providing the higher level of services to their customer. This can help
in getting the advantages for the business to get higher profit which also can help in
leaving their competitors far away.
 Key performance indicators- It is a type of measurement to evaluate the activities
which is running in the organisation, or the success of it. It actually determines the
company's strategies, financial, operational achievements, and compared with other
businesses within the same sector (Helmold, 2020). Effective KPIs focuses on the
business functions, process that senior managers sees as the most important success
towards meeting the organisation targets. It differ from organisation to organisation
depends on the business strategies. KPIs define, analyse, solve, implement, monitor,
review the strategies. Basically it monitors the task and help to solve that. It gives a root
to business, to achieve its task , execute them in better manner and identify the success.
For CitizenM Hotels the important financial KPIs like revenue growth, profitability
overtime, income sources, revenue concentration and working capital are forms of
strategies. Apart from this various non financial metrics like competitiveness, reputation
of organisation, innovative techniques and customer influence can be adopted by
company. It has been evaluated that all KPI can benefit the managers of organisation as
while setting business objectives, at the time of offering rewards and while positioning
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efforts with goals. This involves the energy management, water consumption, labour
cost, employee performance, gross operating profit, occupancy rate, average daily rate,
average room rate, revenue per available room, online rating, customer satisfaction and
loyalty programme which are there for getting the high revenue to the business along
with help in getting the key performance which is according to the provided services.
This one is able to help in getting the higher competitive advantage which helps in
getting higher business than the competitors.
CONCLUSION
From the above project report it can be concluded that strategic planning is an important
part of an organisation as it provides direction to measure its goals. It is a tool which is used to
guide in decisions and evaluate progress of company. The factors which are appropriate for
implementation of franchising are Brand Recognition, Profitability, Sustainability, Clear market
position, Working staff, and Resource management. Different creative business strategies for the
organisations future strategies are selected so that company can easily take competitive
advantage in market. Apart from this some performance metrics like critical success factors, key
performance indicators and balance scorecard help in evaluation of performance within the
organisation.
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REFERENCES
Books and Journals
Elbanna, S., Andrews, R. and Pollanen, R., 2016. Strategic planning and implementation success
in public service organizations: Evidence from Canada. Public Management Review.
18(7). pp.1017-1042.
Helmold, M., 2020. Pricing in the Hospitality Industry. In Total Revenue Management (TRM)
(pp. 115-127). Springer, Cham.
Maharjan, P., 2020. Knowledge Management Enablers for Knowledge Creation Combination in
Nepalese Hospitality Industry. Journal of Balkumari College. 9(1). pp.25-33.
Minor, K. B. and Bratec, M., 2020. Management and Implications of Daily Deal Promotions in
the Hospitality Industry: Toward Their Holistic Understanding. In Digital Marketing
Strategies for Tourism, Hospitality, and Airline Industries (pp. 156-178). IGI Global.
Ogbu Edeh PhD, F., 2020. Effect of Human Resource Planning on Organizational Performance
of the Hospitality Sector in Nigeria. Effect of Human Resource Planning on
Organizational Performance of the Hospitality Sector in Nigeria (June 16, 2020).
Ozturk, A. B., 2016. Customer acceptance of cashless payment systems in the hospitality
industry. International Journal of Contemporary Hospitality Management.
Sapovadia, V. K., 2019. A Case Study-Doyen in American Hospitality Industry: Entrepreneur
Spirit of Mike Chaudhari. Available at SSRN 3392044.
Semeradova, T. and Vávrová, J. N., 2016. Using a systemic approach to assess Internet
marketing communication within hospitality industry. Tourism Management
Perspectives. 20. pp.276-289.
Usoro, A. and Abiagam, B., 2018. Culture effect on knowledge management adoption in
Nigerian hospitality industry. VINE Journal of Information and Knowledge
Management Systems.
Van der Wagen, L. and White, L., 2018. Hospitality management. Cengage AU.
Zopiatis, A., Theocharous, A. L. and Constanti, P., 2018. Career satisfaction and future
intentions in the hospitality industry: An intrinsic or an extrinsic proposition?. Journal
of Human Resources in Hospitality & Tourism. 17(1). pp.98-120.
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