International Hospitality Management: Crown Plaza Expansion Report

This report analyzes the Crown Plaza Hotel within the context of international hospitality management. It begins with an introduction to the global hotel industry and provides background information on Crown Plaza. A SWOT analysis is conducted to evaluate the hotel's internal environment, identifying its strengths, weaknesses, opportunities, and threats. The report then examines the UAE market, selected for potential expansion, using a PESTLE analysis to assess political, economic, social, technological, legal, and environmental factors. Furthermore, Porter's five forces model is applied to analyze the competitive landscape. The report also outlines the hotel's adopted strategies for market entry and growth, and discusses the application of these strategies for the upcoming 5 to 10 years, concluding with a summary of the findings and recommendations for future growth. The report draws on various sources to support its analysis and recommendations.

International Hospitality
Management

Contents
Introduction...........................................................................................................................................2
Background to international hotel industry............................................................................................2
Background of Crown Plaza..................................................................................................................3
SWOT analysis of Crown Plaza............................................................................................................3
PESTLE Analysis of selected UAE market...........................................................................................5
Porter`s five forces model......................................................................................................................8
Hotel strategy adopted and implemented in the emerging market.........................................................9
Application of strategies for upcoming 5 to 10 years ahead................................................................12
Conclusion...........................................................................................................................................13
References...........................................................................................................................................15

Introduction
With the changes in conducting business due to globalisation, it is seen that MNCs have tried
to extend their hands to expand in different countries. This globalisation has forced talented
workforce to shift to other counties to either earn their livelihood or conduct a business trip.
The report will discuss several impacts of globalisation, change management, international
marketing, and branding on the hotel industry. After viewing the trends of the international
hotel industry, Crown plaza Victoria London anticipates to expand in UAE after analysing
the macro-environmental factors such as political factors, social factors, economic factors,
technological factors, legal factors, and environmental factors of UAE.
It is important to analyse the competitive force, in which the company will face competitive
rivalry from other players, bargaining power of suppliers, bargaining power of buyers, threat
of substitutes, and threat of new entrants. These factors have been analysed from Porter five
forces model. To analyse the internal environmental of the business (Crown Plaza), the report
have used SWOT analysis.
Background to international hotel industry
With increasing purchasing power of global consumers and globalisation of business, it is
perceived that global hotel industry records higher revenue. Over the last 30 years, it is seen
that hoteliers often plan for long term with an aim to reduce its cost and maintain service
levels. As per the statistics of hotel industry, total revenue of global hospitality industry has
earned more than USD 500 billion in 2018 (The business research company, 2020).
Furthermore, hotel industry has earned 6-7 percent in 2019. Millennial has set biggest
consumer base in upcoming years for Hotel Company. Travel industry is nearly 10 percent of
world`s GDP (Yi, Thawornwiriyatrakul, and Bi, 2018). Hotel industry has noticed
tremendous upsurge because of large number of MNCs, which has opened their locations at

global level, as many business travellers will continue to increase (Arif, and Hossin, 2016).
Organisations in hotel industry focus on enhancement of customer experience. Hospitality
market is segmented through food and beverage services accounting for greater share of hotel
industry nearly 78 percent in 2018. This market is expected to increase at the rate of CAGR
of 8 percent and exceed $5891 by the end of 2022. Marriott, JW Marriott, IHG, Hilton,
Wyndham, Crown plaza, St. Regis, Rosewood, Luxury collection, and Hyatt marks the
majority of international hotel industry (Arif, and Hossin, 2016).
Background of Crown Plaza
Crown Plaza is the multinational chain of upscale hotels, which has been headquartered in
UK. The hotel is a great place to stay enabled with leisure and luxurious facilities by making
them stay in relaxed mode. It has been located at nearly 410 locations worldwide. It caters
business travellers to meetings and conventions market. It operates in more than 100 nations
with nearly 3600 hotels in these nations (Crown Plaza Victoria dockland, 2019). The hotel
avails spacious accommodating with speedy Wi-Fi connections, flat screen TV and work
desks in a room. Further, in 1990 IHG (intercontinental Hotel Group), which has purchased
Holiday inn, and Crown Plaza to become one brand of IHG brand (The business research
company, 2020).
SWOT analysis of Crown Plaza
Strengths
Global presence-
The quality assurance is undoubtable because currently Crown Plaza operates in nearly 100
nations (Crown Plaza Victoria dockland, 2019). Furthermore, it is considered that among all
the leading hotels, Crown plaza has the largest room area worldwide (Sharma, Sharma, and
Tanwar, 2020).

Profitability-
Being the part of the IHG, the crown Plaza earns maximum revenue, as it is easily available
on OYO rooms. It is well known so people often trusts its services and do not take any other
options other than crown Plaza to stay. The hotel has been delivering underlying profit and it
has opened several number of hotels through revenue (Kadtrenakes, 2019).
Weaknesses
Credit card breaching-
It is seen that nearly 1200 Crown plaza hotels have recently breached credit card stealing
malware (Kadtrenakes, 2019). The investigation is still going on some properties, which
participated with a list of affected hotels. This massive, and wide chain credit system
breaches have been increasing, which reflects vigilant possibility of fraud by checking card
statements (Sharma, Sharma, and Tanwar, 2020).
Lack of loyalty-
The group promised to conduct programs, which have drawn several negative reviews for
customers. Many customers were told and promised to redeem their points back but they are
ready to redeem them back (Domingues, and Nunes, 2018).
Opportunities
New geographical markets for expansion-
Global hospitality sector has been growing where Crown Plaza has its good presence and
growing possible with number of nations in world. While exploring several geographical
markets, it is seen that it is worth of efforts (Bohari, Hin, and Fuad, 2017).
Increasing global travel

The number of the people have been travelling for work as well as pleasure, which has
constantly increasing by using the existing properties and creating strategic alliances with
other airlines and hotel chains (Mohezar, Moghavvemi, and Zailani, 2017).
Threats-
The company faces competition threats from Marriott, Accor Hotels, Hilton, and Hyatt.
Due to high expansion in many areas, the hotel chain faces high challenges with recruitment
practises where half of the graduates denied working in skillset (Kadtrenakes, 2019).
Immigration and tariffs is one of the biggest threat for the hospitality sector but due to
recession in some countries, the policies for estimated revenue have not been helping
(Bohari, Hin, and Fuad, 2017).
PESTLE Analysis of selected UAE market
Pestle analysis is a device, which analyse macro-environmental factors such as political
factors, technological factors, social factors, legal factors, environmental factors and
economic factors (Bertozzi, Ali, and Gul, 2016).
Political factors-
UAE has a political framework, which unites cutting edges and customary structures that
have empowered nations to keep up the political structure sound. State owned ventures are
allowed to expand their business (CEIC, 2019). Government spending on infrastructure
facilities continue to have injection of capital in the economy, which indicates that the crown
Plaza will not face issues in relation to liberalisation of policies while establishing. Most
importantly, UAE has no tax imposition and no federal corporate level tax. The tax burden
equates 8.9 percent of domestic income and budget deficits have been averaged to nearly 2.6
percent GDP (CEIC, 2019).

Economic factors-
The economy of UAE has been dominated by the industrial factors, which finally contribute
58.2 percent of total GDP until 2014. The GDP per capita of UAE is estimated at USD
39704. The GDP for nation is USD 414 billion. The economic growth for 2018 is estimated
at 1.7 (Ahmed, and Maceda, 2019). With the passage of time, strong investment plan of UAE
government in infrastructure and other major projects will support the growth of UAE
economy especially tourism, hospitality, and the finance is anticipated to pace up the
economic growth. The unemployment rate is estimated at 2.6 percent with inflation rate of
3.1 percent (Statista, 2019). There is a lot of solid monetary development in UAE, which
expands interest to complete materials. The nation wanted to accomplish the higher GDP by
differentiating its economy and using its tourism to generate GDP (CEIC, 2019).
(Source: Tradingeconomies, 2019)
Social factors-
The population for 2018 is estimated at 10.4 million. The inhabitants of UAE live
comfortable standard of living by thanking to well-paying jobs. Globalisation has been
resulting into a mix of diverse cultures in the Emirates. The estimated personal disposable

income in UAE is nearly 35 thousand US dollars, which is an increased form while
comparing it to the previous year (Bertozzi, Ali, and Gul, 2016).
Technological factors-
UAE has remained a standout regarding the developing telecom arrangement. UAEs e-
commerce summit will advance computerised economy where occasion will collect
government substances, E-retailers, E-marketers, industry pioneers, and the business
visionaries to talk regarding the recent improvements. These standout e-commerce facilities
will allow Crown Plaza to use social media and advertising campaigns to promote the
business activities (Düerkop, and Huth, 2017).
Legal factors-
As per economic report of 2018, UAE ministry has attracted regarding USD 10.4 billion of
FDI with average rate of 1.6 percent in period time from 2012-2017. Furthermore, the
policies are so relaxed, which has created UAE is be one of the most attractive nation for
FDI. UAE has been ranked as first regionally amongst 62 nations analysed for the ability to
accomplish their resources to achieve long-term value creation (Domingues, and Nunes,
2018).
Environmental factors-
As per the anticipated report of 2021, it is seen that UAE has been strived to expand the
income properties by affecting forward from the oil industry. Recently, green economy aims
to create the economy, which protect the environment and laws related to environment
supporting the growth of economy. Green initiative includes a wide range of legislations,
programmes, and project-

First field of the green energy, which purposes to encourage the usage of renewable
resources.
Urban policies include the development and promotion of the green technology.
Porter`s five forces model
Threat of new entrants-
Travel and hotel industry has been strongly affected through the trends. It is strongly capital
intensive, up fronting investment in the buildings and ICT infrastructure. Threat of new
entrants is quite high because of expensive staff (Ho, 2016). With an aim to sustain revenue
in premium market, operating in hotel chain often dependent on higher investment.
Regulations and policies in real estate and purchasing, which has to be taken in consideration
by restricting in several nations. Likelihood of new entrants is quite moderate (Yi,
Thawornwiriyatrakul, and Bi, 2018).
Threat of substitutes-
There is always threat to substitute product is high where it deals with the value proposition,
which is differently from recent offerings of the industry. The substitute goods might replace
overseas travel and further destination by replacing more expensive through cost grounds
(Bell, Dyck, and Neubert, 2017). A hotel operator can compete on much lower cost basis in
niche segment. This competition is based on modern, non-luxurious, and comfortable hotel in
convenient and popular locations. Threat of substitute product and services is higher because
of new hotel brand (Suleman, Rashidirad, and Suleman, 2019).
Bargaining power of suppliers-
The bargaining power of suppliers is low because wage inflation and rate of union workforce
is high. This is defined by the market inputs where organisation can force for the advantage,

components, services, and labour that can be sourced over the industry. Bargaining power of
suppliers is low because each small supplier has low impact. Labour, experienced personnel
and real estate has greater demand in hotel industry. The industry is labour intensive with the
attraction of the qualified staff, which has greater effect by quality of service availed (Hales,
and Mclarney, 2017).
Bargaining power of buyers-
Bargaining power of buyers is high in bulling season where it is quite low in booming season.
Higher ADR and the occupancy business driving is quite high (Köseoglu, Okumus, Dogan,
and Law, 2019). Within the hotel, industry where the switching costs for the customers is
either minimal or zero as the price is no longer way to success, and innovation and
recognition assists to grab the attention of first time customers. Due to heavy dependence on
technology, the importance of mobile connections, many suppliers can exert greater power on
hotels (Köseoglu, Okumus, Dogan, and Law, 2019).
Threat of competitive rivalry-
There are several factors, on which the degree of rivalry depends such as storage costs,
number of competitors in the industry, similarity of players, easy to spread its business by
extending, lower fixed costs, lack of diversity, and lower switching costs for the hotels. From
the industrial data, it is seen that greater number of independent players are present in
industry apart for the existing and renowned hotels. There are other many international
brands such as Marriott, JW Marriott, Hilton, and Hyatt, which too have diversified
operations such as difficult packages and other value additional services, which include free
breakfast, free third night, and parking. Large hotels have been fairly operated and exert
majority of power from competitors (Hales, and Mclarney, 2017).

Hotel strategy adopted and implemented in the emerging market
Ansoff matrix
In order to analyse the hotel global growth options for Crown Plaza, the company will try to
adopt and implement the strategies, which will laid down as a responsibility of each
department (Mungai, and Ogot, 2017). The company tries to penetrate UAE`s market and
expand by achieving actual growth with the services offered to UAE`s market and other
market segments by focusing on share of market. Crown plaza seek to develop with an aim to
make new segments in market. From the Ansoff matrix, Crown Plaza will grow by
diversification in new business by developing new services for UAE`s market (Mungai, and
Ogot, 2017).
Practical implementation of next 5 to 10 years
For the strategic implementation, the company will have to use Nykiel`s fourteen strategies-
Horizontal expansion- Crown Plaza will strive to expand its one place where tourism is high
in UAE (Abu Dhabi) from various other places of the country with an aim to enter into new
market.
Geographical expansion- Crown Plaza have been growing relatively at particular place in
UAE but it can aim to the most visited point of the nation and establish a new venture (The
business research company, 2020).
Product hybridization- Crown Plaza will further expand range of services to enter in new
market.
Specialisation- specialist- Crown Plaza will have to specialise in associating with the growth
strategy in pricing and services availed to enter in new market.

Product tiering- The hotel will have to focus on dealing with forces, which are associated
with growth of population, economic changes, and demographics with increased
segmentation to enter in market (The business research company, 2020).
Product re-branding-
There is a greater proliferation of services of Crown Plaza to enter to UAE`s market.
Non-franchising-
Crown plaza will always keep greater control over its operations, quality ownership, and
services to keep control to enter into market (Köseoglu, Okumus, Dogan, and Law, 2019).
Franchising-
Crown plaza will follow highly established business strategies for the development, which
follow inside the hospitality sector to enter into new market (The business research company,
2020).
Brand collection-
Crown plaza will specialise in managing the hotels for the owners to enter into UAE`s
market.
Management contracts-
Crown Plaza will specialise in management of hotels for owners to enter into new market.
Horizontal and vertical integration-
Crown Plaza will remain a part of single hospitality segment with the aim to scope to train to
achieve the competitive advantage by investing in several elements of industry to enter into
new market.
Singleness-