MN2306: Marketing Strategy - Hotel Industry Analysis in Singapore

This report provides a comprehensive analysis of the Singapore hotel industry, focusing on its marketing strategy within the context of its competitive environment. The report begins with an introduction outlining the industry's significance and growth in Singapore, followed by a competitor analysis identifying key players like Capella, The Raffles, and Fullerton Bay Hotel, and discussing the high level of competition. It delves into the dominant economic features, showcasing the industry's growth and market size, supported by data from the Singapore Tourism Board. The report then examines the external environment through PESTEL analysis, assessing political, economic, social, technological, environmental, and legal factors. Porter's Five Forces are applied to evaluate the bargaining power of buyers and suppliers, industry rivalry, and threats of substitution and new entrants. Key success factors, such as environmental awareness and customer satisfaction, are highlighted. The report concludes by summarizing the key findings and the industry's potential for continued growth, referencing the increasing attractiveness of the tourism sector and the need for strategic marketing initiatives to maintain competitiveness.

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Marketing Strategy
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Contents
Introduction......................................................................................................................................1
Competitor Analysis........................................................................................................................2
Dominant Economic Features..........................................................................................................4
Market Space (External Environment)............................................................................................5
PESTEL Analysis........................................................................................................................5
Porter Five Forces........................................................................................................................6
KSF (Key Success Factors).............................................................................................................7
Conclusion.......................................................................................................................................8
References........................................................................................................................................9
Appendices....................................................................................................................................11

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Introduction
The purpose of this report is to enlighten the reader with the details about the hotel and
hospitality industry of Singapore. The report elaborates the details about the hotel industry
specifications of Singapore. The hotel industry comes under one of the most booming industries
present in the world. This industry has become one of the most significant industries that help the
country in increasing its economic value in the international environment. The hotel industry
brings prosperity to the economy of the country as they support the tourism sector and increase
international competitiveness as well. The below mentioned report highlight details about the
competition present in the industry, dominant economic features, market space and key success
factors of the industry.
Considering the hospitality industry of Singapore, it should be noted that there is wide scope of
hotel industry as the country is not large but it is heavily populated. The country is known for
serving luxurious hotels and rich cuisines to people coming in the country. The hotel industry of
Singapore has shown explicit growth in previous years. Increment in the tourism sector has rose
profitability in the hotel industry as well (Azam, Alam, and Hafeez 2018).

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Competitor Analysis
The Republic of Singapore is a metropolitan city-state and island country that is spread in the
area of 714.3 square kilometres. The country rose as an Asian Tiger economy and is growing
with the help of productivity of the hospitality industry. Analysing the level of competition in the
industry, it should be noted that Capella, The Raffles and Fullerton Bay Hotel are the three key
players present in the industry. There is high degree of competition in the industry as the
company comes on the second position in the Ease of Business index described by the World
Bank. Resulting in which, the country along with the industry provide favourable conditions to
the organization to work in the country (Naidu 2017).
The country is populated with 5.6 million people due which shows high degree favourableness
for the hotels to position them at the right place in the market to increase sales. A person can see
hotels placed at every famous location in Singapore and competitors are located close by only.
Thus, it can be said that the scope of competition is high. Further, tight competition revolves
around the economic and mid-tier hotels where as upscale hotels enjoy the market recognition
due their prosperous brand image in Singapore. The country known for its tourism sectors so all
the people traveling to Singapore are not wealthy thus they use economic hotels for stay. High
demand of economic hotel eventually increases the level of competition in the industry.

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According to Singapore Tourism Board, there were total 410 number of hotels in the country and
66,994 rooms in the year 2018. The number has subsequently increased in the year 2019 and has
started providing better assistance to people in the environment.
The products and services in the industry are differentiated on the basis of the quality provided
by the companies in Singapore. Economic hotels provide medium quality accommodation
services to the people in the environment at economic rates as well. While premium hotels chares
high amount from the customers and gives them luxurious services with add-on benefits as well
(Horwath 2019). Considering the positioning strategy of the competitors present in the industry,
it should be noted that there is presence of large number of competitors in the market due to
which the industry offer all income range services to the travellers in Singapore. The industry has
all three middle income level, lower income level and higher income segment organizations in
the market. These organizations are positioned differently on the basis of the services provided
by them and prices of the services. Companies like Capella, The Raffles and Fullerton Bay Hotel
are present at the top most position in the market. These companies are the market leaders who
develop trends in the external environment (Hanafiah, Hemdi, and Ahmad 2017).
The level of sales is dependent on the services offered by the companies, like Marina Bay hotel
in Singapore holds great position because of its luxurious services provided in the environment
(Singapore Tourism board 2019). Whereas IBIS Singapore hotel also attains profitability in the
market because of its economic rates and optimum services in the environment. The hotels in
Singapore industry succeed either because of high quality services or because of optimum price
possession.

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Dominant Economic Features
The above mentioned chart clearly explain that market size of the hotel industry of Singapore is
significantly growing. In the year 2018, the company hit historical high rate of SGD 27.1 billion
but the per capita spending reduced to SGD 1464. The Singapore Tourism Board expects that the

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accommodations organization present in the hospitality industry of Singapore have high chances
to grow because of the increasing attractiveness of the tourism sector (Bozkurt, Güler, and Bahar
2018). Considering the growth rate of the industry, it should be noted that the STB revealed that
there has been a 6.2% that is 18.7 million, this amount is expected to reach till 19.2 million in the
year 2019. However, it is expected that there is more scope for the industry to grow in the
upcoming years because there is presence of resources in Singapore that complement the tourism
sector (HVS.com 2019).
Resulting in which, it should be noted that better infrastructure would help the industry in
expanding the business structure and increasing the level of productivity. Further, it should be
noted the industry is at the growth stage in the market. All the companies present in the
Singapore hotel industry are working to increase their competitiveness in the environment.
Growth stage in the life-cycle stage means that the industry and the people present in it are
working hard to achieve the desired level of productivity in the environment. The promotion and
advertisement strategies of the companies present in the Singapore industry plays the lead role in
attracting customers towards the hotel (Navarro 2016). A person planning their Singapore hotel
trip gets to know about the hotel and its facilities through online promotions only. Social media
promotions help in attracting people from different parts of the world towards Singapore tourism
and hotels as well.
Market Space (External Environment)
PESTEL Analysis
Political: the political risk in the country is quite low as the government works in favour of the
organization to increase productivity and profitability as well. Singapore is a democratic country
so people are independent to choose the right decision. The government of the country also
works to provide stable standard of living in the environment.
Economic: The Singapore economy is vibrant and prosperous that provides opportunities to
companies present in this industry to grow and attain profitability. The per capital income of
Singapore is highest in ASEAN that elaborates profitability of environment. The financial and

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legal business framework helps in strengthening the business process and eliminating chaotic
situation (Meng, Chin, and Grant 2015).
Social: The social environment of Singapore is like an eastern country where family values and
traditions are followed. Differential traditions of the country increase the tourism and improve
the sales of hotel industry as well. The people of the country are resilient and work hard to
achieve materialistic satisfaction in the environment. There is high degree of purchasing power
in the hands of customers in the country.
Technological: technology helps the country to become advance and innovate new features for
assistance as well. The IT industry of Singapore consistently works to increase the connectivity
between several industries and reducing the costing as well. The e-commerce channels used by
companies provide advantage to people in connecting with each other and attaining desired level
of services as well (Board 2016).
Environmental: The environment of Singapore is favourable for the people to stay and live a
sustainable living in the environment. The government of the country works with the anti-
pollution units to maintain the quality of air and other environmental factors as well.
Legal: The government of Singapore has transferred all the paperwork into an electronic system
that helps in initiating transparency in the environment. The electronic mode of commerce also
helps in clearly justifying all the rules and regulations and complying with the policies as well
(Henderson 2016).
Porter Five Forces
Bargaining Power of Buyer: There is high degree of power in the hands of buyer only when they
purchase the rooms in bulk, otherwise the customers do not hold power while purchasing single
room as the hotel will not provide discount to them. Certain groups have the power in this
industry, that are, airlines, tour operators and seminar organizers.
Bargaining Power of Supplier: suppliers have relatively low power in their hands as the hotel
industry is subjected to the power of labor, staff and the people present in the industry. The
company hotel industry has high degree of people in the environment due to which the
competence of the supplier reduces (Henderson 2015).

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Industry Rivalry: there is high degree of competition in the industry as all the hotels are fighting
to provide the best services to the people in the environment and attain competitive advantage as
well. There is low degree of switching cost that gives opportunity to the people switch from one
hotel to another if they do not like the services.
Threat of Substitution: there is low degree of threat of substitution in the industry as if a person
has come of Singapore on a vacation, then they will eventually get a hotel room booked for stay
if they do not have any relatives house in Singapore. However, cheap accommodation can be
obtained in hostels and motels (Zsarnoczky 2016).
Threat of New Entrants: There is moderate degree of threat of new entrants in the market as
capital requirement in this business is high. The new entrants cannot compete with big and
famous hotels but they compete with small-scale hotels present in Singapore.
Thus, it should be noted that the hotel industry of Singapore is highly attractive that provides
opportunities to all the hotels to attain prosperity in the environment. Talking about the consumer
buying behaviour in the hotel industry, it should be noted that the customers in this industry
comes with an approach to relax and enjoy. People visit Singapore mainly for vacations so that
they can relax their minds from their daily hectic routines. Resulting in which, it should be noted
spending power of people increases when they are spending for their vacation. Thus, it can be
said that people have optimum spending power in the hotel industry of Singapore (Hu, et. al.,
2019).
KSF (Key Success Factors)
There are several factors that influence the prosperity of the hotel industry in the external
environment. The industry faces high degree of competition that eliminates entrance of market
leaders present in other industries as well. Secondly, it should be noted that it was found that
people travelling to Singapore have started attain Zika virus in their body, due to which tourism
in the country was reduced. Thirdly, it should be noted that the industry faces environmental
issues in Singapore that affect the profitability of the industry. Bad environment make the people
change their trip from one location to other due to which profitability of the industry reduces

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(Nugraha, Hamin, and Elliott 2016). Further, below mentioned are the key success factors that
will successfully help the industry to attain competitiveness in the market:
 Develop Environmental Awareness Program
 Focus on quality of accommodation services
 Create forum for travellers to express their grief against the hotel
 Increase satisfaction of customers in Singapore hotel industry by 20% (Appendices 1)
Conclusion
Thus, in the limelight of above mentioned events, the fact should be noted that the paper
highlighted details about the hotel industry of Singapore. Singapore is known for its tourism
activities so the accommodation industry is supported with high end tourism services in the
country. The above mentioned report details the external industry information that are favourable
or unfavourable for the companies to initiate their sales accordingly. Lastly, defined KSF will
help the industry to attain desired profitability in the business market.

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References
Agiomirgianakis, G., Serenis, D. and Tsounis, N., 2017. Effective timing of tourism policy: The
case of Singapore. Economic Modelling, 60, pp.29-38.
Azam, M., Alam, M.M. and Hafeez, M.H., 2018. Effect of tourism on environmental pollution:
Further evidence from Malaysia, Singapore and Thailand. Journal of cleaner production, 190,
pp.330-338.
Board, S.T., 2016. Tourism sector performance—Q4 2016 report.
Bozkurt, K., Güler, N. and Bahar, O., 2018. Fuzzy convergence in tourism economics. Journal of
Tourism Theory and Research, 4(1), pp.1-15.
Hanafiah, M.H., Hemdi, M.A. and Ahmad, I., 2017. The Influence of Tourism Core Resources
on Travel and the Tourism Competitiveness Index and Tourism Performance. In Balancing
Development and Sustainability in Tourism Destinations (pp. 377-384). Springer, Singapore.
Henderson, J.C., 2015. Destination development and transformation: 50 years of tourism after
independence in Singapore. International Journal of Tourism Cities, 1(4), pp.269-281.
Henderson, J.C., 2016. Local and traditional or global and modern? Food and tourism in
Singapore. Journal of Gastronomy and Tourism, 2(1), pp.55-68.
Horwath., (2019) Singapore Hotel Market [online]. Retrieved from <
https://www.hospitalitynet.org/file/152008568.pdf> [Accessed on 8 September 2019].
Hu, X., Lovelock, B., Ying, T. and Mager, S., 2019. Stakeholder Collaboration on Policymaking
for Sustainable Water Management in Singapore’s Hotel Sector: A Network
Analysis. Sustainability, 11(8), p.2360.
HVS.com., (2019) Market Pulse: Singapore [online]. Retrieved from <
https://www.hvs.com/article/7959-market-pulse-singapore> [Accessed on 8 September 2019].
Meng, X., Chin, A. and Grant, B., 2015. Long‐run Effect of the Global Financial Crisis on S
ingapore's Tourism and the Economy. Asian Economic Journal, 29(1), pp.41-60.

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Naidu, S., 2017. Exploring the dynamic effects of urbanization and real effective exchange rate
on tourism output of singapore. Tourism Analysis, 22(2), pp.185-200.
Navarro, O., 2016. Chinese and Tourism Industry of Singapore. Journal of Administrative
Management, Education and Training (JAMET), 12(4), pp.137-143.
Nugraha, A., Hamin, H. and Elliott, G., 2016. Tourism destination decisions: the impact of risk
aversion and prior experience. Asia Pacific Journal of Tourism Research, 21(12), pp.1274-1284.
Singapore Tourism board., (2019) Staying Ahead of the Competition [online]. Retrieved from <
https://www.visitsingapore.com/mice/en/bulletin-board/staying-ahead-of-the-competition/
overview/> [Accessed on 8 September 2019].
Zsarnoczky, M., 2016. Contradictions of Medical Tourism. DETUROPE–The Central European
Journal of Regional Development and Tourism, pp.212-223.

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Appendices
Appendices 1: Marketing Mix
Product: the product in the hotel industry includes the room, room service, food and all the
offerings provided by the hotel. Fitness centre, spa, club, restaurant, pool etc. are all the products
and services offered in this industry. It should be noted that in order to achieve the KSF in the
market, it is important for all the hotels to come together to look for the issues and trends in the
industry and then change the products and services. Also, the products and services should be
provided to the customers according to the amount paid by them, like premium hotels should
differentiate their services from the mid-tier hotels (Agiomirgianakis, Serenis, and Tsounis
2017).
Price: This industry is price sensitive but since people hold good purchasing power in their hands
due to which all the types of hotels enjoy profitability in the environment. All three types of
hotels are present in the industry that is working to satisfy the customers in respect to the sum
shared by them. Some hotels provide pool, gym etc. services free of cost and charge in the rent
of room while others take separate charges as well.
Place: the place under this marketing mix explains the distribution and logistics services;
however, there are no specific distribution and logistics services in the environment. The services
provided by the organization are at the infrastructure of the hotel and the customers directly
attain services from the building itself. So, there are no distribution activity under this type of
industry (Bozkurt, Güler, and Bahar 2018).
Promotion: the marketing and promotion activities play the key role in attracting people in this
industry. Travellers coming from different parts of the world get to know about the hotels in
Singapore through online promotion activities only. So, it should be noted that the promotion
activities helps in increasing the sales of the industry therefore the hotels should focus on
investing in the promotion activities to achieve the KSFs in the market.