Strategic Planning Report: Hospitality Industry Analysis

This report delves into the realm of strategic planning within the hospitality industry, focusing on the application of strategic options such as franchising, mergers and acquisitions, joint ventures, and management contracts, specifically using Holiday Inn as a case study. It analyzes the critical factors affecting the implementation of these strategies, including leadership, structural design, human resources, and information and control systems. Furthermore, the report evaluates performance metrics through critical success factors, key performance indicators, and a balanced scorecard approach. The analysis emphasizes the importance of these elements in achieving organizational goals, improving productivity, and ensuring the long-term success of hospitality businesses.

Strategic Planning for
Hospitality Industry

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
Knowledge and understanding of strategic options................................................................1
TASK 2............................................................................................................................................3
Factors affecting implementation of strategies.......................................................................3
TASK 3............................................................................................................................................6
Analysing and evaluation of performance metrics.................................................................6
CONCLUSION................................................................................................................................8
REFERENCES................................................................................................................................9

INTRODUCTION
Strategic planning refers to defining of decisions or directions or making of strategies for
proper allocation of resources. It can also be defined as the framing of plans and policies through
which organisation's objectives can be achieved. The following report will describe knowledge
and understanding of popular strategies which are used for achieving organisation's goals.
Furthermore, it will analyse the factors which are affecting the implementation of strategies some
of them are leadership, structural design information and control systems as well as human
resources. Present study will evaluate the performance metrics with the help of critical success
factors, key performance indicators and balance scorecard of organisation.
TASK 1
Knowledge and understanding of strategic options
Strategic options can be defined as a plan which are made to achieve organisation's goals
and objectives. These are based on smart choices which are helpful in dealing with the
complexities and increasing success of organisation. The strategic options which are used by
Holiday Inn are as follows:
Franchising- This is concerned with determining whether business is all set to expand or
not and that franchising can be proved to be a beneficial strategy for the firm or not. This
decision can be taken on the basis of company's success and its growth level. Franchising
decision can be suitable for hotel Holiday Inn as they have a recognised brand and sales
propositions is clear to consumers. Hotel Holiday Inn provides the best and friendly experience
to their customers which is helpful in increasing success of organisation and so, they have an
opportunity for expansion (Bai and Sarkis, 2014). Franchising decision can prove to be
beneficial for the organisation as they will help in further development and growth of business
and will attract a greater number of customers towards them. Franchising decisions is based on
proper research of markets and making appropriate plans to expand the business. This will
include research made on the basis of market and formation of strategic plans. Franchising will
also help in introducing new ideas and welcoming of new talents for the growth of hotel Holiday
Inn.
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Mergers and Acquisitions- It refers to combining of two companies to form one
company. Merger happens when two companies joins together and Acquisition occurs when one
company is sold to another company. The final results of this both processes are similar but
relationship of the two companies are different based on type of process occurred. Mergers and
acquisitions play a very significant roles for growth and success of the company. These two
processes can prove to be profitable for hotel Holiday Inn as these are helpful in accelerating a
company's growth and productivity by merging with another organisation (Cassidy, 2016). These
would be helpful in using new ideas and resources of other company for the development of
hotel Holiday Inn. Merging of hotel Holiday Inn with other firm can give an advantage of
coming of more qualified persons and use of other company's brand image for attracting a
greater number of customers. This will also help in reducing financial constraints and debt
capacity can be enhanced.
Joint Ventures- It is a partnership between two companies to contribute cash, personnel
or other assets. These companies agree to share its profits, revenues and costs for a specific time
period for completion of a project. A joint venture for hotel Holiday Inn can give them the
opportunity to encourage access of greater technology and specialised staff with new capacity.
Through joint ventures, Holiday Inn can have a chance of entering new markets and share the
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Illustration 1: Franchising
(Source: THE BENEFITS OF FRANCHISING, 2017)

risks. Joint venture can also be an advantage of having flexible nature in the working of an
organisation and for a new company to establish it can be helpful in becoming a push to start the
business. Joint ventures are also helpful in lowering the financial burden of the firm as it allows
to share the costs, profits, expenses, benefits and risks. Joint venture proves to be beneficial for
hotel Holiday Inn as it becomes a learning base for people to learn the new technology and get
more experience of practical knowledge. Through joint ventures, Holiday Inn have an
opportunity to increase its number of contacts and consumer base for increasing growth and
success.
Management Contracts- It involves performing of managerial functions of other
enterprise in return for a pay. It means actually doing of those functions such as production
facility, accounting and training, marketing services, technical operation and management of
personnel. These are used for enhancing and improving business operations of a company
(Cooper, Ezzamel and Qu, 2017). Hotel Holiday Inn can gain a competitive advantage with the
help of management contracts and also can lower their costs. They can now concentrate on their
expansion chances and by hiring experienced employees for contract management, they can
distribute some of their responsibilities such as retention and recruitment to these employees.
Management contracts give assurance of continuity to Holiday Inn by gaining more experienced
and specialised staff in their organisation. Through this, Holiday Inn have an opportunity to join
with international business to grow and succeed. Management contracts will help hotel Holiday
Inn to improve its productivity and efficiency by monitoring the impacts whether they are
positive and negative of these contracts which will help in improving the way of working.
TASK 2
Factors affecting implementation of strategies
Strategies are needed for smooth working of an organisation. They define proper plan to
work accordingly for every employee working in the organisation. Strategies are formed to
achieve organisational goals and objectives effectively and efficiently (Bryson, Edwards and Van
Slyke, 2018). There are some factors which affects the implementation of these strategies such
as:
Leadership- It is known as an ability of a person to lead and guide people or a group of
people to achieve a set of determined objectives and goals and the person who guides other
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people is known as a leader. Leadership can influence the implementation of strategies both
positively and negatively. A positive leadership in hotel Holiday
Inn will guide and motivate their people in accomplishment of organisation's goals and
objectives. Positive leadership will help Holiday Inn to increase its growth and success. Positive
leaders of Holiday Inn will ensure proper and smooth working of the organisation and also
discipline in the firm can be maintained. Through these strategies can be implemented effectively
made by top level management. Whereas negative leadership will always try to create confusion
and a conflicting nature of environment in the organisation. Because of this, employees working
will resist themselves towards implementation of new strategies and this will also affect the
growth and success of hotel Holiday Inn. Negative leadership will demotivate the employees and
strategies cannot be implemented appropriately in the organisation.
Structural design- It can also be referred to as organisation structure which includes size
of organisation, age of organisation and environment of organisation. Organisation structure can
also affect the implementation of strategies depending upon its size, age and environment. Size
of Holiday Inn can be considered as big which consists of different kinds of people with different
beliefs, nature and style of working which have a positive and negative effect on its working.
This difference influences the process of implementation of strategies as big size will consist
different working styles and beliefs which will affect the employees to accept new plans and
policies. Whereas small size of an organisation will help in quick and smooth absorption of
strategies by people working in it. Structural design also includes the level of development of
company. Development of hotel Hilton is improving this will have a positive impact on
employees and they will be motivated to work more effectively this will further help in
acceptance of new strategies by them. This will increase the growth of firm. Decreased level of
development of hotel Holiday Inn will contribute less in motivating and influencing the
employees which will hinder process of implementation of strategies in the hotel.
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Figure 1: Management structure of Holiday Inn
Human resources- It is concerned with having required and qualified candidates in
organisation. HR department is responsible to fill the vacant job positions of the company with
most qualified and experienced candidate which will help in generating more profits and growth
for the company. Trained and qualified personnel of hotel Holiday Inn will help in proper
implementation of strategies in the firm. These effective candidates will accept the strategies for
better working and improving efficiency of the hotel. This will help in increasing the parameter
of growth and success. This can also have negative impact on strategies as there are some
negative persons working in the hotel which will create a negative effect on implementation of
strategies. These people because of their negative nature will not accept strategies through which
success of the hotel will be affected. Because of non-implementation of strategies, the entire
working, growth and success of hotel Holiday Inn will get affected and many problems and
issues are generated.
Information and control system- It is a system which utilises the information for
evaluating the performance of various company's resources such as physical, financial and
human to frame different strategies. These are the tools used by manager of hotel Holiday Inn to
implement the required strategies. An effective management control system will help in accurate
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Illustration 2: Information control system
(Source: Information Management Systems, 2018)

implementation of strategies with the help of true and reliable information which are helpful in
increasing the success of the hotel. Strategies requires correct and reliable information regarding
markets, different prices prevailing in the market and consumer's needs and demands on the basis
of which strategies can be framed (Fürst and et.al., 2014). These strategies will help in
generating more profits for the hotel and with effective control system, strategies can be
implemented more precisely. Ineffective information and control system will provide irrelevant
and wrong information because of which unclear strategies are formed and this will have a
negative impact on the growth and success of hotel Holiday Inn.
TASK 3
Analysing and evaluation of performance metrics
Organisation's activities, behaviour and performance is measured by the performance
metrics. Following are the techniques used for evaluation of performance metrics-
Critical Success Factors (CSF) - These are necessary for ensuring success of the
company. These involves those managerial areas which should be given continuous attention for
enhancing the growth and success of the organisation. These success factors become important
for evaluating the performance of people working in hotel Holiday Inn as these are helpful in
making the strategies successful for the company. These are said to be critical as this drives
strategy forward and can have a positive as well as negative impact. With the help of this success
factors performance are better evaluated and high performing employees are rewarded. With the
help of rewards employees get motivated and they contribute more for the firm. Motivated
people of hotel Holiday Inn will work efficiently and effectively towards the achievement of
determined objectives and goals (Jiang and et.al., 2014).
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Through CSFs goals and objectives which are beneficial for hotel Holiday Inn are
developed and performance is evaluated accordingly. Identification of this success factors will
help the hotel to know better about their profitable goals which are necessary for their future
success and more attention is made on them. As more concentration is made on these success
factors, Holiday Inn is able to increase its efficiency and productivity which is helpful in
generating more profits for the enterprise. Identification of this success factors will help in
understanding the activities which are profitable for hotel Holiday Inn and therefore it becomes
necessary to identify these factors so that growth can be maximised. Chances of development
and expansion in future can be known with help of these success factors.
The CSFs will be hereby based on some below mentioned points-
 Location- This indicates a key success factor for hotel industry, on which, the
incoming rate of customers depends to a great extent.
 Global outlook- It refers to the attitude of competing at international level to
become successful in the future. A vital level of awareness in Holiday Inn is
required to know what their contenders are doing worldwide.
 Quality management- It refers to a complex aspect of going beyond the notion of
customer service and include some additive factors like employee satisfaction
and their active engagement in the work practices. By which, Holiday Inn can
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Illustration 3: Critical Success Factors
(Source: Critical Success Factors, 2016)

assure providing effective services to its customers through a contented set of
workers.
Key Performance Indicators (KPI) - They are concerned with evaluation of success of
a particular activity in which they are engaged. They can be said as a sort of measuring
performance. Business functions and processes are focussed with effective KPIs which are
important for achieving strategic goals and targeted performance. These KPIs will help hotel
Holiday Inn to manage its operations more effectively as it involves communication of mangers
with their followers in case of any necessary steps needed based on performance evaluation.
With the help of key performance indicators attention of people working for Holiday Inn are
made on the activities which are important for smooth working of an organisation (Semenova
and Hassel, 2015). Through these indicators people can now focus on the important aspects of
hotel which will help in generating more profits for Holiday Inn.
KPIs also includes making clear the performance expectations of managers with their
subordinates. KPIs will help employees working in hotel Holiday Inn to know the required level
of performance to increase the productivity and efficiency of the hotel. KPIs will help the hotel
to monitor and track the performance of every employee more effectively and know the
requirement of any changes or adjustments to be made to improve their performance. This will
further help in improving the flexibility of hotel and will indicate earlier problems and issues of
the firm. Through this performance of employees of hotel Holiday Inn are evaluated more
accurately and the issues and problems which are hampering the effectiveness of their
performance are identified and they are resolved timely which will improve performance of
employees and increase their efficiency and productivity.
The KPI’s of this cited firm will be measured on considering some below stated points-
 Online rating- This is basically to check the visitor’s ratings acquired by hotel Holiday
Inn on their official website and on whose basis, they can refer ensuring the satisfaction
level of their customers.
 Occupancy percentage- This is yet another effective KPI and is among the most
significant success indicator for the cited firm. A 75% occupancy rate determines an
average proportion where Holiday Inn can hereby refer employing effective strategies
for restricting the stay length to further increase its rate of occupancy.
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 ADR- This refers to the average daily rate of the rooms sold by the quoted entity and
helps in measuring the income earned per room. It works as an effective tool for
measuring performance on the basis of a competitive base.
 RevPAR- This is yet another effective tool of performance metrics to assess the
undertaken operations of the cited firm in terms of filling up the vacant rooms.
 ROI- This refers to measure the return on investments done on training individuals in
hospitality organisations like Holiday Inn.
The Balance Scorecard- It is a tool used by managers to keep a record of activities
which are performed by their staff members under their control and monitoring. Through balance
score card performance outcomes and key enablers of future performance are identified and
through this strategic planning can be made better for Holiday Inn which will help in generating
more profits for the firm. Balance score card will also help hotel Holiday Inn to communicate
their strategies more effectively internally and externally and they can be executed better in
company. Balance scorecard will help the hotel to align their projects and initiatives which focus
on achievement of organisation's goals and objectives more accurately (Wolf and Floyd, 2017).
Below are the aspects referring to the quoted entity’s balanced scorecard-
 Financial procedures- This provides a consistent approach for successfully managing the
performance of Holiday Inn in terms of earning profits. It is basically to fulfil the long-
term objectives of the business and operate with a controlled financial system.
 Customer processes- Use of balance score card can be done to improve both internal and
external means of communication for the customers in light of Holiday Inn’s strategic
goals. Also, producing good quality products to serve the consumers is referred to be yet
another major agenda.
 Internal proceedings- This refers to the internal operations of the business that leads to a
satisfied set of customers and improved financial performance. Core business procedures
are hereby identified to meet both expectations of the customers as well as attain the
undertaken business objectives on time.
 Learning and growth- This refers to work within an aligned set of teams with a positive
culture and leadership to operate with a quality information system like networks and
databases. It also refers to the procedures imparting effective skills to the workers as a
mean of support to understand organisation’s viewpoint and work accordingly.
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Hotel Holiday Inn will have an advantage of better management information which is
required for decision making process. This can be done through proper research and focus is
made on activities which are beneficial for company's growth and which enhances chances of
expansion. The organisational structure can be better aligned with strategic objectives with the
help of Balance scorecard as it involves assuring that all functions of hotel Holiday Inn is
working towards the achievement of common goals. With better implementation of balance
score card, all processes and functions of the hotel such as risk management, analytics and
budgeting are aligned towards achievement of hotel Holiday Inn goals.
CONCLUSION
From the above study, strategic planning for hospitality industry with the use of
appropriate theories have been concluded. This study has also evaluated the knowledge and
understanding of strategic options which are helpful in generating chances of expansion of
business and factors which are affecting implementation of strategies. Evaluation and analysis of
performance metrics techniques which are used for measuring the performance are articulated
here as well.
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