Marketing Plan for Hotel Industry - Desklib

This report covers the marketing plan for the hotel industry including current trends, internal and external factors affecting the industry, PESTLE and SWOT analysis, competitor analysis, STP strategy, and marketing mix tools.

TASK-Creation of a Marketing Plan
Marketing Plan
10/25/2019
Hotel Industry
smrc

Abstract
This report is based on the marketing plan of the hotel industry. The Various factors that
might impact the working of the hotel industry are covered in this report. The flow of the
report starts with the introduction to the hotel industry which is followed by the current trends
of the hotel industry. Then there are various internal as well as external factors affecting the
working of the industry. Along with this the report also covers the proper pestle analysis as
well as SWOT analysis of the industry. The competitor analysis and STP analysis are also
very well covered in the report. This is then followed by conclusion to the report.

Contents
Abstract.......................................................................................................................................................2
Introduction.................................................................................................................................................6
Trends in the Hotel Industry........................................................................................................................6
Booming global tourism..........................................................................................................................6
Virtual communities................................................................................................................................6
Factors affecting hotel industry-..................................................................................................................6
External Factors.......................................................................................................................................7
PESTLE Analysis........................................................................................................................................7
PESTEL ANALYSIS-........................................................................................................................................7
Political Factors-......................................................................................................................................7
Economic Factors.....................................................................................................................................8
Social Factors.......................................................................................................................................9
Technological Factors..........................................................................................................................9
Environmental Factors.........................................................................................................................9
Legal factors......................................................................................................................................10
Internal factors affecting hotel industry-...................................................................................................11
 Customers......................................................................................................................................11
 Board of Directors (BOD)-..............................................................................................................11
 Government...................................................................................................................................11
SWOT analysis...........................................................................................................................................11
Strengths of Hotel Royal:.......................................................................................................................11
 Provides secure Place Away from Home....................................................................................11
 Contributes to the Economy......................................................................................................12
 It Provides Employment.............................................................................................................12
 High-Profit.................................................................................................................................12
WEAKNESS OF HOTEL INDUSTRY...........................................................................................................12
 Hotel Charges............................................................................................................................12
 Unfavourable Tax Rates.............................................................................................................12
Opportunities to the Hotel Industry......................................................................................................12
 New policies...............................................................................................................................12
 New customers from online platform........................................................................................12

Threats to the hotel industry.................................................................................................................13
 Less innovative products...........................................................................................................13
 Improving strengths...................................................................................................................13
STP STRATEGY-..........................................................................................................................................13
Segmentation........................................................................................................................................14
Location.................................................................................................................................................14
Size........................................................................................................................................................14
Preferred Amenities..............................................................................................................................14
Traveller Type........................................................................................................................................14
Targeting:..................................................................................................................................................15
Positioning-............................................................................................................................................15
Smart Objectives of Amazon company-.....................................................................................................15
a) Growth objectives..........................................................................................................................16
Branding objectives:..............................................................................................................................16
Profitability objectives:..........................................................................................................................16
ANSOF Matrix of hospitality industry........................................................................................................16
Product development............................................................................................................................17
Diversification........................................................................................................................................17
Market Penetration...............................................................................................................................17
Market development.............................................................................................................................17
Apply Tools of marketing mix-...................................................................................................................17
Products:...............................................................................................................................................18
Positioning:............................................................................................................................................18
Process:.................................................................................................................................................18
Packaging...............................................................................................................................................18
Pricing:...................................................................................................................................................18
Place;.....................................................................................................................................................19
Promotion:.............................................................................................................................................19
Porter’s Five forces Analysis......................................................................................................................19
Threat of new entrant:..........................................................................................................................19
Threat of substitute products:...............................................................................................................19
Bargaining power of suppliers:..............................................................................................................20
Bargaining power of customers:............................................................................................................20
Recommendations.....................................................................................................................................20
References.................................................................................................................................................21

Introduction
The hospitality is experiencing enormous variations and burden over the previous
decades(Zagade and Fernandes, 2018).
What main trends have been uniformly changing the industry and where is hospitality going
in the future?
Online travel agents usually have three basic impact on the hotel industry. Among these
impacts, first one is regarding their role in modifying various distribution channels. They are also
responsible for diverting values away from people. Second impact mentioned the notorious
behaviour of various brands. It means that these companies have replaced the hotel brands to a
great extent. In the end, the third one is that, they are responsible for building harmonious
relationship with travellers.
Trends in the Hotel Industry
Booming global tourism
More people travels because of low cost carriers, the people travel across the world at a very
reasonable price. Various new markets have confirmed that their GDP started increases at a
very high rate, which helps in planning their citizens to travel across the world.
Virtual communities
Various Social networks or TripAdvisor have had a reflective effect on customers. These
networks help in providing more transparency and helps in providing better quality of the
services hospitality companies.
Factors affecting hotel industry-
There are various factors that affect the hotel industry. These factors are categorised in
External factors or internal factors;

External Factors
 External factors are also termed as the macro factors. The Market environment has all the
factors, which may affect the decision of the organization. The external factors (Bernini and
Guizzardi, 2010) may affects in the internal settings of an organization.
PESTLE Analysis
The factors which can affect the organisation indirectly:-
 Political
 Social
 Technological
 Economical
 Legal factor
 Environmental
PESTEL ANALYSIS-
Pestel Analysis for the industry is the superlative and new way to find various factors which
may affect the hotel industry. Various factors like social and environmental play an important
role in the strategic management. However, economic factors are divided into many legal
factors. The various factors also include the political factor, economic, social and
technological factors, the PESTEL analysis helps in understanding these factors:-
Political Factors-
Political factors have a major role in finding the different factors that can impact the, Hotel
Royal’s long term profitability in a country or the particular market (Saavedra-Rivano, 1979).
Hotel Royal is effective in accommodating in more than 10 countries and providing itself to
various types of political environment and system risks(Moonsri and Moonsri, 2019).
 Political stability and need of accommodating sector in the country.
 Various Regulations in hotel industry.
 Bureaucracy and interference in lodging industry by government.

 Legal structure for contract procedure.
 The protection of intellectual property of the industry
 Trade regulations & tariffs related to industry
 Laws related to accommodation.
 Regulation relating to prices
 Taxation - tax slabs and deductions
 Minimum Wages to the labour class.
 Regulations relating to work
 Schemes regarding benefits of employee.
 Regulatory measures regarding industrial safety.
Economic Factors
Various economic factors including inflation rate, savings rate, interest rate, forex rates and
other economic cycles usually assist in the estimation of aggregate demands along with
investment in any viable economy. Apart from these, certain other factors such as competition
among major players also play a vital role in the aggressive impact of the firm(Turner and
Guilding, 2012).
 Kinds of economic mechanism in the economy
 Governmental interventions in the market and the services related to it
 Exchange rates of the base country
 Quality of Infrastructure in accommodating industry
 Advantages of base country and Services sector.
 Skill level of management in accommodating industry.
 Level of education in the economy
 Cost of the labor
 Restricted income
 Rate of unemployment in the economy
 Inflation rate in the country

Social Factors
Social factors involve social culture and other processes of performance of certain activities
are responsible for affecting the industrial environment. Beliefs and attitudes of the general
public plays a major role in how the service providers at Hotel Royal understand the
customers of a market and how they make the message relating to market for accommodating
industry customers(Leroux and Pupion, 2018).
.
 Level of skills in the population
 Different hierarchy and structure of power in the industry
 Education level and the standard in the Hotel Royal
 Culture in the economy
 Wider character of the society. Some societies promote entrepreneurship
 Attitudes of the management as well as tourist
 Leisure interests
Technological Factors
An industry shall take various steps in performing the technological analysis in the industry also
it should check the speed at which technology affect that industry. Slow speed will give more
time while fast speed of technological disruption may give a firm little time to cope and be
profitable. Technology analysis involves understanding the following impacts -
 Current technological amendments by Hotel Royal competitors
 Impact of technology on product offering
 Cost structure impact in accommodating industry
 Rate of technological diffusion
Environmental Factors: Profitability of any enterprise is determined by various market
conditions. And different market conditions include diverse environment standard. In fact,
usually states inside any country have their own environmental standards and relevant liability
laws. As, in the United States, Texas and Florida has their different liability clauses and
varied environmental laws in case of environmental hazards. Similarly there are lot of

European nations which are know for providing health tax benefits to companies operating in
renewable sector(Leroux and Pupion, 2018).
 Weather and associated systems.
 Climate change and vulnerability
 Laws for regulation of environmental pollution
 Regulation regarding air and water in the hospitality sector.
 Recycling mechanism.
 Waste disposal and management.
 Behavioural changes regarding green and ecological products.
 Endangered and vulnerable species
 Adoption of renewable energy.
Legal factors- various countries have a number of regulations in the form of legal compliance.
There are counties where legal framework and relevant institutions are not that much robust to
protect intellectual property rights of their organisations. There must be careful evaluation of
such factors before entering into that market as these factors can cause serious repercussions.
There are list of various legal factors that Hotel Royal should consider at the verge of entering
new market:
 Provisions of Anti-trust law in Hospitality industry and relevant regulations overall in the
country.
 Provisions of Discrimination law
 Copyright, patents / Intellectual property law related laws and statutes.
 Adequate regulations of Consumer protection and e-commerce.
 Employment laws and various mechanisms.
 Health and safety law
 Regulations regarding data protections
Internal factors affecting hotel industry-

There are some internal factors that may affect the hotel industry.
 Customers- Customers plays a key role in the hospitality industry. The service provider
should focus on providing good customer service, Quality products at good price, nice and
clean environment to attract the tourist, that help in increasing their profit margin(Bernini and
Guizzardi, 2010).
 Board of Directors (BOD)- Board of Directors play an important role in managing
the hotel industry(Farhangmehr and Sim[otilde]es, 2001). Board of Directors are pillar of any
organisation that helps industry to grow. It helps them in making high profit margin, in
expanding the business or providing high turnover.
 Government- Government also play an important role in the hotel industry, as these
factors may affect the industries. Tax rates by the government, security deposits, deductions
provided by the government etc.
SWOT analysis
SWOT analysis is a technique which helps in identifying the factors that may affect the
industry, in context of Hotel Royal.
Strengths of Hotel Royal:
 Provides secure Place Away from Home- The hotel industry have many well -mannered
spaces. With a various range of hotels across the world which ranges from boutique type
hotels to the well recognised name brands along with other hotel that will fulfil the customer’s
needs(Hotel Industry Research Progresses At Cornell, 2013).

 Contributes to the Economy:Industry that provides important financial control,the hotel
industry has ability to mutually coordinate along with local economy. The local attractions
that attracts the tourist, but it’s the hotels that help them to stay there.
 It Provides Employment: The hotel industry has enormous scope and provide
employment to many people.(Mohammad Arabzad an, 2012) Hotel industries provide
employment to various local peoples, which help them to earn their livelihood.
 High-Profit: The hotel industry needs huge initial capital, but the cost of labour is lower,
and the profit ratios are higher.
WEAKNESS OF HOTEL INDUSTRY
 Hotel Charges-The charges of the hotels are so high that the average person are not able
to afford the same. Hence, hotels are trailing its customers to competition in the industry.
 Unfavourable Tax Rates-In some countries, the tax rates are not favourable to the hotel
industries which, make the cost of services very high. These unfavourable tax rates down the
market because it makes the cost high(The Future of the Restaurant Industry, 2016).
Opportunities to the Hotel Industry
 New policies– Various opportunities will make field for all the participants of the hotel
industry. It provides a new opportunity to provide the advantages of new technology and help
in gaining the share in the market.
 New customers from online platform – In the past few years, the industry has invested
large amount of money into the online channel. Due to this investment, The investment has
opened various opportunities for the hotel industry (V, 2016). In the coming years the

industry can use this opportunity by fulfilling the needs of the customers(Choy and Gee,
2014).
Threats to the hotel industry
 Less innovative products – The industry has launched various products. Then, the
supply of new products is not usual thus it leads to high and low levels in the sales in the
industry.
 Improving strengths of the distributors also act a threat in the markets as the competition
is paying higher profits to the local service provider(The hospitality industry, 2015).
STP STRATEGY-
The segmentation of services provided by Hotel Royal is based on the facilities of offerings,
ambience and complementary services like spa, gym, bar etc. Along with these, it also
includes housekeeping services and the services offered by the locality of the hotel.
Also the offerings made by these hotels, typically based upon the income level of the
customer and therefore there exists a marvellous differentiating technique in the form of
multiple stars rating such as 3-star, 4-star, 5-star etc.
The Hotel Royal has already placed itself at a lead position in the whether culturally or
industriallyasaprominentbrandgivingadequateemphasis over
localcultureandtraditions(Harrison, 2013).

 Segmentation
 Targeting
 Positioning
Segmentation
It is the process of dividing consumers’ kr business market. It usually consists of all the
potential customers into subgroups of potential customers, which are known as segments,
depends upon certain shared characteristics(Crawford-Welch, 2015).
Location
It determine whether your hotel is in big city or rural town, beach or land locked, distance
from hospital, amusement park etc
Size
There must be a reason to attract people to stay at your place , irrespective of the fact whether
you have boutique bed or a part of a brand hotel chain.
Preferred Amenities
There also exist persons who cancel their bookings because of absence of certain amenities.
Therefore, segmentation here helps to cater them.
Traveller Type
Hotels must determine the need of traveler as the needs of a business professional will be
different from that of family of five with children. Therefore, awareness about the type of
traveller attracted towards your hotel is also major observation.

Targeting:
It is one of the major cornerstone of
service development process.Hotel
Royal uses comprehensive targeting
strategy in order to target different
segments. It always positioned
itself as a brand which strives to
give world class experience with
every level of amenities to provide
the best. It also uses value based
positioning strategy to achieve its
target.
Positioning-
Positioning is the process involving complex sets of perception and opinion, impressions,
feelings which are customers are about to exposed. This is the kind of scale used to compare
ourselves with the other competitors.
Hotel bookings are recorded as a purchase by a customer on the basis of perception attributed
by the brand. For example of corporate level offices, the customer is always the person doing
formalities but not the one who stays. The attributes perceived by the brand are tangible and
intangible both(Lewis, 2014).
Smart Objectives of Amazon company-
SMART objective are those aspirations which have potential to channel the attention and
achieve the respective commitments from all the level of business. Hotel Royal has
determined some of the below mentioned smart objectives.
a) Growth objectives:

One of the prime smart objectives for Hotel is to grow by 15% per year for at-least half a
decade. And in order to achieve this objective,
Hotel Royal is determined to invest additional of $1M in advertisement along with expansion
of business by opening at least 10 new hotels..
Branding objectives:
Hotel Royal is also determined for making their hospitality brand to become the most
preferred brand amongst corporate travellers. It has decided to achieve this objective within
three years.
Founder of Amazon, in context of branding, told that “Your brand is what other people say
about you when you’re not in the room”. Therefore, to achieve this objective, identification of
target customers, and focusing on niche customers can be a major step towards achieving their
branding objective.
Profitability objectives:
Hotel Royal is also determined to augment its profit margin and reach a net of 11% within
next five years.
In specific context of hospitality sectors, business expansion in International markets,
focusing on online service expansion and efficient management of services for utmost
consumer satisfaction can assist the company in achieving those profitability objectives.
ANSOF Matrix of hospitality industry
There are four factors that are considered under the Ansof matrix and they include:
 Product development
 Diversification
 Market penetration
 Market development

Product development: under this strategy the company or the industry is required to
focus mainly on the development of either new product or make changes in the existing
product or services.
Diversification: Diversification includes diversifying various operations of the industry
so that the focus is not made entirely on either one product or one market. Product
diversification is a very good strategy that can be followed by the hotel industry.
Market Penetration: This strategy is usually concerned with changing the existing
strategy in the market for the same product or service that is being delivered to the
customers. A good amount of profit and revenue can be generated by the company by
following this strategy.
Market development: The main focus of the market development strategy is on the
developments to be made in the existing market itself and not expanding its operations in a
different market.
Under the above mentioned case the company or the hospitality industry should use either
the diversification strategy or the market penetration strategy so that it can generate a good
amount of revenue and profit for itself.
Apply Tools of marketing mix-
Marketing Mix in business studies is known as the foundation model for business. It has been
defined as the “set of marketing tools that any firm implements in order to pursue its market
aspirations and objectives with reference to target market. It usually includes decision making
at four broad levels which are Product, price, place and promotion. Therefore, implanting
the tools of market mix in context of promotion of hospitality industry includes following
considerations.

Products:
Inclusion of display boards that can assist in awareness about the product of the business.It is
type of display usually seen at the counters of any restaurant. It’s prime objective is to
stimulate the increasing sale. It contains signs , banners for exteriors, table tents in the lobbies,
room service menu, guest room and elevators etc to assist the smooth functioning and self
help culture in the hospitality industry.
Example: various hotels implement displays to announce certain promotional events like food
festivals, beverage festivals etc. for sales promotions.
Positioning:
Hotel bookings are recorded as a purchase by a customer on the basis of perception attributed by
the brand. For example of corporate level offices, the customer is always the person doing
formalities but not the one who stays. The attributes perceived by the brand are tangible and
intangible both.
Process:
The Hotel Industry is required to follow a particular process in order to complete its various
tasks. A particular process if followed in line and in proper manner can prove out to be highly
beneficial for the company.
Packaging
For the various products or services that the company is delivering to its customers it is highly
recommended that it follows a good packaging for those products so that it can look creative
and attractive to the customers.
Pricing:
It’s a joint marketing conduct and require teamwork. It also includes special packages for
tourist with common destinations. These offers are intended to meet the aspirations of large
group of people. Usually it includes accommodation along with meals but there can also be
innovations to include sight seen, attractions , special local events or programs etc.

Place;
It is the method which helps in distribution of products. It includes analysis of geographical
areas in the close proximity of buyers preferred areas. Also known as the location where
buyer was looking for service and adequate availability at required geographical location.
Promotion:
This includes the advertising and events in order to support certain devices and products. It
requires various strategies that are made to promote the product in real market. This system is
intended to make the end user well aware about the product.
Porter’s Five forces Analysis
Threat of new entrant:
For entering in to hospitality industry at the global level it is essential to have high capital costs and fixed
costs. It is required to have a good amount of cost so that all the work related to establishment of hotel
industry is available. Therefore, it can be said that there is high level of threat of new entrant to enter in
the hospitality industry.
Threat of substitute products:
There is not much threat of availability of substitute products and services in the hotel industry. A hotel
can operate with a low level of threat of substitute products. Therefore, it is not a much concerned issue
in case of hotel industry.
Bargaining power of suppliers:
The bargaining power of the supplier is low in case of hotel industry. There are many suppliers who can
supply various services and products to the industry hence the bargaining power of suppliers is seen to
be quite low here.

Bargaining power of customers:
As it has been observed that there are many customers for the hotel industry and the demands of the
customers keep on changing therefore, the bargaining power of the customers is also low. If one
customer is not happy with the services provided than then hotel industry tends to have many more
customers.
Recommendations
The hospitality industry has been experiencing spike due to hike in global tourism industry
over the past years. This, industry now supports 9.8% of GDP of Australia. With the expected
growth of the sector at nearly 4% annual, concerns are already arising in context of climate
change and the future of global tourism industry.

References
Bernini, C. and Guizzardi, A. (2010). Internal and Locational Factors Affecting Hotel Industry
Efficiency:. Tourism Economics, 16(4), pp.883-913.
Choy, D. and Gee, C. (2014). Employment Opportunities in Tourism. Cornell Hotel and
Restaurant Administration Quarterly, 19(3), pp.57-64.
Crawford-Welch, S. (2015). Market Segmentation in the Hospitality Industry. Hospitality
Research Journal, 14(2), pp.295-308.
Harrison, J. (2013). Strategic analysis for the hospitality industry. The Cornell Hotel and
Restaurant Administration Quarterly, 44(2), p.8.
Hotel Industry Research Progresses At Cornell. (2013). Cornell Hotel and Restaurant
Administration Quarterly, 6(4), pp.40-40.
Leroux, E. and Pupion, P. (2018). Factors of adoption of eco-labelling in hotel
industry. Technological Forecasting and Social Change, 129, pp.194-209.
Lewis, R. (2014). Positioning analysis for hospitality firms. International Journal of Hospitality
Management, 1(2), pp.115-118.
Moonsri, K. and Moonsri, P. (2019). The Elements of Causal Factors Affecting Customer’s
Satisfaction at Hotels and Resorts. SSRN Electronic Journal.
The Future of the Restaurant Industry. (2016). Cornell Hotel and Restaurant Administration
Quarterly, 17(1), pp.2-3.
The hospitality industry. (2015). The Cornell Hotel and Restaurant Administration Quarterly,
39(4), pp.80-80.
Turner, M. and Guilding, C. (2012). Factors affecting biasing of capital budgeting cash flow
forecasts: evidence from the hotel industry. Accounting and Business Research, 42(5),
pp.519-545.

Zagade, D. and Fernandes, M. (2018). Do guests prefer Tech Savvy Rooms A perspective from
hotel guests. International Journal of Trend in Scientific Research and Development,
Volume-2(Issue-4), pp.293-300.