Marriott Hotel: Strategic Entry into Nigeria's Hospitality Sector

This report provides a comprehensive analysis of Marriott Hotel's potential expansion into the emerging market of Nigeria. It begins by outlining the background of the international hotel industry and Marriott International, followed by a SWOT analysis identifying the company's strengths, weaknesses, opportunities, and threats. The report then delves into the global hotel and tourism industry, with a focus on emerging markets like Nigeria. A PEST analysis is conducted to assess the political, economic, social, and technological factors affecting the Nigerian market. Based on these analyses, the report proposes and justifies specific hotel strategies for Marriott to adopt and implement within the Nigerian market, utilizing strategic models and frameworks. Finally, it discusses the practical application of these strategies over a 5- and 10-year horizon, concluding with key recommendations for Marriott's successful entry into Nigeria. Desklib offers similar solved assignments and past papers for students.

INTERNATIONAL HOSPITALITY MANAGEMENT
MARRIOTT HOTEL WEST INDIA QUAY

Table of Contents
BACKGROUND TO INTERNATIONAL HOTEL INDUSTRY..............................................................2
BACKGROUND OF INTERNATIONAL HOTEL MARRIOTT.............................................................3
SWOT ANALYSIS.........................................................................................................................4
BACKGROUND OF GLOBAL HOTEL AND TOURISM INDUSTRY...................................................7
BACKGROUND OF EMERGING MARKETS (NIGERIA, AFRICA)....................................................9
PEST ANALYSIS FOR EMERGING MARKET- NIGERIA................................................................10
ANALYSIS OF SWOT AND PEST.................................................................................................12
HOTEL STRATEGY TO BE ADOPT AND TO BE IMPLEMENTED (USING STRATEGIC MODEL AND
FRAMEWORKS) WITHIN THE ENTERING MARKET...................................................................13
JUSTIFICATION OF STRATEGIES................................................................................................16
PRACTICAL APPLICATION OF STRATEGY – 5 AND 10 YEARS AHEAD........................................17
CONCLUSION............................................................................................................................18
REFERENCES.............................................................................................................................19
1

BACKGROUND TO INTERNATIONAL HOTEL INDUSTRY
The hospitality industry is one of the biggest industries in the world which has been
conducting their operations in collaboration with the tourism industry. The establishment of
a hotel business in the emerging market will be beneficial for the business at the huge level.
There are several trends which occurred in the International Hospitality Industry. The trends
are associated with the rapid development regarding the ownership, globalization,
integration, and management.
The ownership aspects have been the rapidly developed segment of the hospitality industry
and it will gain substantial growth in the future time. According to World Tourism
Organization, the timeshares are highly developing sectors in the industry regarding the
travel and tourism (Okumus, et al. 2010). The brand power is the potential element among
the hospitality organizations regarding the corporations like Hilton Hotels, Hyatt Hotels,
Marriott Vacation Club International, etc. who have been gaining substantial growth in the
recent time.
In the recent time, the trend of vertical integration has been growing such that the hotel
companies have started expanding their business in other areas also in order to gain
substantial development and increment in the profitability. Also, the globalization aspect is
the prime element of the international hospitality industry. The hospitality organizations
have been considering the international aspects of gaining substantial growth and
development (Tribe, 2016). In addition, the management aspect works regarding the
complex forces regarding safety, security, capacity control, technological aspects, and
capital aspects. There are certain complications occur during the communication between
the staff and customers that could be managed through the recent trends.
In the current scenario, Marriott Hotel West India Quay has been focusing on expanding
their business in an emerging market. According to the WTM 2014 Industry report and
UNWRO Tourism Highlights 2014, it has been comprehended that the most appropriate
merging market for the hotel business is Nigeria (UNWTO, 2012). This report will be working
through different tools and model for accomplishing the desired objectives effectively.
2

BACKGROUND OF INTERNATIONAL HOTEL MARRIOTT
The London Marriott Hotel is a 5-star luxury hotel in London and is located at 22 Hertsmere
roads, in West India Quay Marina. This particular hotel is operated by the Marriott Hotels
groups and has approximately 302 rooms. This hotel is owned by John Christodoulou.
Marriott hotel is the worldwide operator and franchiser of hotel and lodging facilities. In the
year 1964 the Marriott hotel was named as Marriott and later in the same year this hotel
was recognized as one of the biggest and emerging hotels of the country. In the beginning
the Marriott hotel did not provide many services to the customers instead it offered various
types of economical services like accommodation services, lodging services etc. In the initial
times Marriott provided its services to small areas and groups of people and later started
facilitating larger customers in the business. At present Marriott is one of the biggest
international brands in the tourism and hospitality segment.
In the early 1990’s only few hotels were under the banner of Marriott Corporation and
operated based on the principles of diversification and also operated in most parts of the
world with the same principle. In the year 1993 the corporation got split into two different
companies one was named as the Marriott International and the other organization was
named as the host, Marriott (Boella and Goss, 2013). The Marriott international basically
operated in the hotel and real estate management and the Host Marriott operated in real
estate segment and food delivery. The Marriott hotels contribute to approximately half a
million hotel rooms worldwide and owing only 0.3% of them.
Marriott hotels are continuously spreading its influence around the world, especially in the
hospitality segment. The prime objective of this company is to set and win the goal of the
leading position in the hotel market. Over the years the company has shown a great deal of
respect for the guests, business partners, employees and society as a whole. The businesses
of Marriott hotels are built on some fundamental ideas of service for providing service to
the customers.
3

SWOT ANALYSIS
Figure 1: SWOT Analysis
Source: (Liu, 2010)
STRENGTHS
Strengths refer to as what business does well in its area of operations which can give it an
upper hand in front of its competitors. The biggest strengths of the Marriott hotels are their
strict adherence to operational norms. The code of conduct of Marriott hotels are custom
designed by the higher management of the company and all the employees are expected to
follow the company’s norms (Boryk, 2010).
The Marriott International has a presence all over the world and currently has a presence in
122 countries around the world and has approximately 600 properties under its belt with
more than 1.2 million rooms worldwide (Boryk, 2010). The company is giving prime focus on
innovation and most of the company’s procedures and systems have started integrating
new innovative processes.
OPPORTUNITIES
4

Opportunities refer to different types of avenues in the environment that surround the
business and capitalize on return on investments. Some of the opportunities include:
People around the world are more interested in staying in luxury hotels when they travel
with their families and even alone. This is one of the biggest opportunities for the hotel
owners to lure and woo the customers by offering them a variety of services for their
accommodation needs (TAKACS and VADUVA, 2017). The Marriott group of hotels was on
the news for supporting the LGBTQ community for offering them special discounted offers
and that could be an exclusive opportunity for the hotel chain. A company should give prime
focus on personalization as now a day’s customer and tourists want personalized attention
are always willing to pay for it.
WEAKNESSES
Weakness refers to the areas where the business needs some improvements, for example,
operational improvements, infrastructural improvements etc. Some of the key weaknesses
have been identified for the Marriott International as explained below.
The company is extensively focusing on expanding its international market and it is
organizing various types of advertisements and promotional campaigns for expanding its
business which could a weakness as it may reduce the quality of service provided to the
customers (TAKACS and VADUVA, 2017). Some additional weaknesses include over-
emphasis on service standardization as each employee working in Marriott international is
given a set of guidelines and instructions for operation. This stringent adherence to rules
and regulations has brought down the morale of the employees.
THREATS
Threats refer to those factors in the environment that basically decrement the growth of the
business and some threats are identified for Marriott business as described below.
Marriott International operates in the competitive environment and the company faces a lot
of challenge from other big players in the business like Hilton Chain of Hotels etc. Due to
economic recession and impact of Brexit the company is facing a lot of financial and
economic issues (Enz, 2011). Even the global recession has hit the hospitality business and
5

declined the profit margins of many hospitality industries in the world. Premium Hotels like
Marriott are always in danger of getting attacked by the terrorist. The top-rated hotels
around the world are facing huge risks from the terrorist groups as they are easy targets
from attack (Enz, 2011).
6

BACKGROUND OF GLOBAL HOTEL AND TOURISM INDUSTRY
The background of Hospitality and Tourism industry is quite diverse and spans many nations
and time periods. The early accommodations in the hospitality segments were family
owned. In the early days, the leisurely travel was mostly confined to people from the elite
class. Some people in the past travelled mostly for getting educations, exploring the beauty
of nature and for worship. In early days there were no hotels and tourist stayed in other
people’s home and rest houses (Mok and Kadampully, 2013).
The hospitality industry has its presence from the ancient Greek times and even before that
and in the 40 BC, the services related to the hospitality segment mainly comprised of social
and religious gatherings and it was quite a common phenomenon. It is during this era that
people from the Greeks community came up along with their thermal baths which were
mainly designed for relaxation and recuperation. The word hospitality in previous times was
used with the word tourism and is used to describe individuals who travelled away from
home from the beginning of the 17th century. With the advent of Industrial revolution with
the creation of modern modes of transportation for example steamships and railways
travelling was made easier than ever before. The global size of the hospitality and tourism
sector is quite difficult to quantify as one can imagine. Data on the size of the global market
is scarce and subjective (Mok and Kadampully, 2013). The hotel industry ranges from very
privately owned families to major international groups. There is no official dimension of the
hotel industry nor there did any internationally recognize grading system.
In the early 18th and 19th century the concept of hospitality and its provision for tourism
industry came into existence. The global tourism gained popularity in the 20th century due to
some political changes in the UAE and African nations. The international tourist arrivals
grew at the rate of 4% in the year 2011 to 980 million as per the latest UNWTO world
tourism report. This growth rate is expected to for the coming years as the international
tourist's arrivals are on track (King, et al. 2011).
Tourism and Hospitality industry in the present modern era offers a wide range of services
to the customers. Today tourism and hospitality segments work in collaboration and both
the industries rely heavily on operations on each other businesses. Hospitality industry
7

provides a wide range of services to the tourist like accommodation, transportation, lodging,
food and beverages services to the customers.
8

BACKGROUND OF EMERGING MARKETS (NIGERIA, AFRICA)
Africa is considered to be one of the largest emerging and potential markets in the global
hotel and tourism industry. Studies have shown that the emerging markets have increased
volatility and there is a need for government agencies to invest heavily in creating an
environment that supports hospitality and tourism in Nigeria. Within the African country,
Nigeria is considered to be the most exciting emerging market from hospitality and tourism
point of view. The prime reason of Nigeria being an emerging market is that the current
political situation of Nigeria is quite stable, the government supports tourism-related
activities, and moreover, the region is also economically stable. People in Nigeria are from
elite class and there are many large enterprises and companies have set up their offices and
industries. It is also seen that increased number of business travellers are stimulated by the
economy and people are interested in visiting diversifies places for their tourism and leisure
needs (Okumus, et al. 2010).
At present, there are many limited hotels in Nigeria in order to facilitate the local as well as
tourists coming from the overseas nations. There are no hotels at present in Nigeria which
can provide a wide range of services as offered by bigger hotels like Hilton or Marriott. The
current situation of Nigeria appeals for setting up the infrastructural facilities in Nigeria for
promoting tourism and hospitality segments across its regions (Okumus, et al. 2010). Nigeria
is considered to be the emerging markets and it has a strong establishment for the
destination of the tourist for quite some time now. Nigeria is also facilitating the business
owners from around the world and that is also a good sign to popularize the tourism and
hospitality segment in Nigeria. Businessmen are relatively from the elite class and by
providing them quality service the tourism sector is likely to boom in the region (Tsiotsou
and Ratten, 2010).
9

PEST ANALYSIS FOR EMERGING MARKET- NIGERIA
The pest analysis for Nigeria which is a promising emerging market is done below-
Political- In Nigeria, there is a multi-party system where currently ruling is the uninterrupted
civilian government. The political situation of the country is currently stable but may change
with the elections in 2018. There is also a threat of the rise in terrorists in the north part of
the nation. The government of the country is taking every effort for diversification of the
economy (Mark and Nwaiwu, 2015). Also, there are price wars in the hospitality firms in
Nigeria, as a result of which the economic situation of the sector is unstable. Therefore, in
the area of the hospitality sector, the firm can expand well in Nigeria after analysis of its
political aspects. It is a good opportunity for the firm to flourish in a politically stable
environment.
Economic- The complete dependency of the economy of Nigeria is on its oil revenue. The
present economic state is not much flexible. As a result of this, the people in the country
are not ready to spend their income on leisure activities. On the other hand, it will be a
great opportunity for the firm to present the employment opportunity for the people. Also,
the foreign exchange rate is very high and this has caused the increase in the prices of the
consumer goods (Sakanko and David, 2018). This has led to cost-cutting of the budgets of
the businesses. The cost of the power and water resources is very high in Nigeria which can
be a hurdle in the business set up.
Social- The total population of Nigeria as of 2016 was 186 million which accounts it for being
the 7th most populous nation in the world ranking. The population size is the factor that
attracts the foreign investors and businesses to invest in the establishment of major firms in
the country (Gerland, et al. 2014). The 2 major religions here are Christianity and Islam
along with other religions which signify the regional diversity. It is studied that the people
are ready to invest in anything of their interest rather it is fashion or leisure. But it is
important for the firms to adopt effective marketing approaches to sell their products and
services in order to reach the targeted customers.
10

Technological- In the terms of technological aspect, Nigeria has gained abrupt progression.
The people in the country are becoming the computer savvy. A large part of the youth of the
country has literacy in computers which is a positive indication for the new firms to promote
their services through the digital media. There are also around 86 million users of the
internet in Nigeria which is a huge figure (Couldry, 2012). These users of the internet have
also a significant presence on the social media. Therefore, for the hotel to promote its
services and presence in Nigeria, the digital platform is one of the best media of
advertisement through which maximum of the people can receive the information about
the new venture and will avail its services.
11