Ritz Carlton Hotel: Macro-environmental and Growth Strategies Report

This report provides a detailed analysis of the Ritz Carlton Hotel's marketing and brand-building strategies. It begins with the hotel's mission statement and then proceeds to a macro-environmental analysis using the PESTEL framework, examining political, economic, socio-cultural, technological, environmental, and legal factors impacting the hotel's operations. The report further explores the application of Ansoff's Matrix to identify potential growth strategies, including market penetration, product development, market development (with specific recommendations for expansion in Macau, Guangzhou, and Shenzhen), and diversification. The report also references several academic sources to support its analysis and recommendations, offering a comprehensive view of the hotel's marketing landscape and potential avenues for business growth within the competitive hospitality industry.

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Running head: MARKETING AND BRAND BUILDING

MARKETING AND BRAND BUILDING
Contents
Discussion........................................................................................................................................2
References........................................................................................................................................6
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MARKETING AND BRAND BUILDING
Discussion
The mission statement or The Credo of The Ritz Carlton Hotel is that The Ritz Carlton Hotel is a
one stop hospitality service where attending and offering convenienceto the customerscomes first
and islargest motive. The hotel pledges to offer exceptional personal care services to the
customers to make their stay and experience memorable, warm, relaxed and refined with
outstanding ambiance.
The services which are offered by The Ritz Carlton Hotel are hotels and resorts, yacht services,
weddings, meeting and residence.
The macro-environmental analysis of The Ritz Carlton Hotel based on PESTEL is as follows:
Political- Although there is no history of terror attacks in Hong Kong but such threats can’t be
ruled out, hence one of the political factors which can affect The Ritz Carlton Hotel likely in
future are fear of terror incidents, international allainces and political atmosphere in various
sought after destinations. The largest risk which the hotel and hospitality industry faces in the
current scenario of global risk is indiscriminate terror events and military conflicts which can
lead to disruption in international air travel and also can frighten people away from travelling in
various popular tourist destinations in and around Hong Kong as terrorists mainly target tourists
and hotels which can impact the demand of rooms for Ritz Carlton hotel in Hong Kong. As
stated by Bakhter & Adel (2018) the other political factors which can affect The Ritz Carlton
Hotel are the policies imposed by the government of the countries, where the hotels operate such
as taxation rate, minimum wage rates, regulations imposed by the government regarding doing
business in the country and political stability. The other political factor which can affect The Ritz
Carlton Hotel is the relation of the country in which the hotels are based with other countries
which can lead to restrictions regarding issue of visa.
Economic- The major economic factor which can impact The Ritz Carlton Hotel is the
purchasing power of the customers and impact of economic crisis on consumer behaviour and
promotional mix of hotel such as advertising, sales promotions etc which creates positive value
in customers mind. Recently it was observed that the slow economic growth and downfall of
stock market in China affected the business by decreasing the buying power of people and their
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capacity to travel, thus affecting business travel to Ritz Carlton which is a major revenue source.
As opined by Radojevic, Stanisic & Stanic (2017) another economic factor which can impact
The Ritz Carlton Hotel is the rising exchange rate for dollar which can discourage business
travels and can affect the overall promotional mix of hotel by reducing for instance sales
promotions in short term to push sales of hotels rooms and attract customers. Rising exchange
rate and interest rate can lower push promotions of Ritz Carlton like special package to
encourage conference or corporate meeting that includes discounts and inclusive
accommodation, food and special local events thus reducing demand for rooms and services and
discouraging consumer behaviour due to drop in promotion tactics.
Socio-cultural- The socio-cultural factors which impacts The Ritz Carlton Hotel is the rising
number of Chinese and Asian travellers as people from these growing economies are witnessing
rise in their purchase power. The other socio-cultural factor which has impacted The Ritz Carlton
Hotel is the ageing population in various countries which have increased the demand for some
types of tour experiences like packaged tours and luxury resorts. As opined by Chen & Chen
(2014) another socio-cultural factor which has impacted The Ritz Carlton Hotel is the rise in the
number of international travellers as a result of globalization and also increase in the spending of
the travellers.
Technological-The technological factor which impacts The Ritz Carlton Hotel is digitalization of
services as it helps in revolutionizing customer experiences. The other technological factor
which affects The Ritz Carlton Hotel is use of artificial intelligence and robotics in order to
enhance customer experiences. According to Jungsun (Sunny) Kim, Yoon & Zemke (2017)
technological factors is considered as one of the most important external factor in the business
environment of The Ritz Carlton Hotel as technology exerts an important role in not only
determining how consumer select and make hotel booking but also determines experiences they
have. As the hotel industry has become more heavily dependent on information and technology,
it has helped the hotelto increase the consumer trust while initiating decisions about spending on
tour. The other technological factor which impacts The Ritz Carlton Hotels is high popularity for
app services in smart phones and messaging services which is evident from the fact that many
hotel chain have opted for card less system in which the guests use their smart phones as key
cards for accessing their rooms in the hotel. Technological advancements such as artificial
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intelligence and robotics have helped in enhancing the level of customer expectations.
Technological advancements have also helped in increasing the demand of The Ritz Carlton
Hotel as customers’ checks review of the hotel in various websites before booking a hotel.
Environmental-The environmental factor which impacts The Ritz Carlton Hotel is increasing
fuel prices as the rising fuel prices of airlines have resulted in lower demand of flight ticket
which impacts the profitability of the hotel by impacting on number of guest visits. According to
Martorell-cunill, Gil-lafuente, SociasSalvà & MuletForteza (2014) another environmental factor
which impacts The Ritz Carlton Hotel is increasing electricity costs which increase the
operational costs of the hotel. The other environmental factor which influences The Ritz Carlton
Hotel is global warming as it results in fluctuations of temperature which results in fluctuations
of airlines service bookings and these impacts the profitability of the hotel.
Legal- The legal factor which impacts The Ritz Carlton Hotel is travel ban imposed in certain
countries by various other countries in which the hotel is located. As opined by Mahal (2018) the
other legal factors which impact the hotel are laws and restrictions imposed by the government
of the country in which the hotel operates such as labour laws, employment law, anti-
discrimination law and workplace health and safety laws etc. Another legal factor which impacts
The Ritz Carlton Hotel is the status of services such as Airbnb as companies such as Airbnb
impacts zonal laws, hotel regulations and health and safety regulations.
The possible tactics of increasing the business of The Ritz Carlton Hotel using the Ansoff’s
matrix is as follows:
Market Penetration-The hotel should focus on sponsoring International sports club such as
globally renowned football clubsand the Hong Kong Cricket team or sponsoring popular
tournaments such as Hong Kong Super Sixes Cricket tournament in order to enhance the brand
image. As opined by Vrkljan (2014) Ritz Carlton Hotel can also focus on increasing services for
the middle class customers by introducing new offers, new campaigns and new discount
packages. The hotel should also focus on hosting international successful programs such as
entertainment events in Hong Kong Disneyland.
Product Development- The hotel should focus on utilizing helicopter services for transporting
special guests from the Hong Kong airport to the hotel. They can also focus on hosting
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monument exhibitions in Hong Kong and its nearby tourist locations for 1-2 weeks with special
offers and discounts in all of The Ritz Carlton Hotel located in Hong Kong and in neighbouring
locations of Hong Kong.As opined by Yazici, Köseoglu & Okumus (2016) the hotelcan also
focus on line production of plates and dishes in order to minimize the costs of the plates as well
as they caneven focus on introduction of internationalmenusand cuisines in addition to domestic
menus and cuisines in order to satisfy the taste requirements of the international customers as
well as the international customers.
Market Development- The Ritz Carlton Hotel should emphasize on setting up various new
branches of the hotel in various neighbouring locations of Hong Kong such as:
Macau- The hotel can set up their branch in Macau in order to capitalize on historical site
tourism, tourism related to nature and parks and in order to discover Chinese cultures.
Guangzhou- They can set up their branch in Guangzhou in order to capitalize on one of the most
sought after cruise tourism destination of the world.
Shenzhen- The Ritz Carlton Hotel can set up their branch in Shenzhen in order to capitalize on
the popularity of the natural parks and amusement parks present in the location which are
popular attractions of tourists and in order to exploit religious tourism opportunities due to
popularity of Buddhist culture in the location.
Diversification- The Ritz Carlton Hotel can focus on diversifying their existing services in the
form of Ritz Carlton coffee, by establishing a new chain of coffees shops under the name of Ritz
Carlton. The hotel caneven focus on diversifying their existing business to Sea-cruise Tourism
Company by setting up an enterpriseoffering Sea-cruise voyages in Hong Kong and its
neighbouring tourist locations such as in Macau and Guangzhouunder brand name of Ritz
Carlton with standards of service of The Ritz Carlton Hotel.
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References
Bakhter, I., & Adel, A. (2018). Factors affecting operation and maintenance cost of
hotels. Property Management, 36(3), 296-313. doi:http://dx.doi.org/10.1108/PM-04-
2017-0023
Chen, W., & Chen, M. (2014). Factors affecting the hotel's service quality: Relationship
marketing and corporate image. Journal of Hospitality Marketing & Management, 23(1),
77. Retrieved from https://search.proquest.com/docview/1476210901?accountid=30552
Jungsun (Sunny) Kim, Yoon, S., & Zemke, D. M. V. (2017). Factors affecting customers’
intention to use of location-based services (LBS) in the lodging industry. Journal of
Hospitality and Tourism Technology, 8(3), 337-356. doi:http://dx.doi.org/10.1108/JHTT-
03-2017-0023
Mahal, P. K. (2018). Organizational factors affecting job outcomes: An empirical study of hotel
industry. Journal of Applied Management - Jidnyasa, 10(1), 21-37. Retrieved from
https://search.proquest.com/docview/2137603201?accountid=30552
Martorell-cunill, O., Gil-lafuente, A., SociasSalvà, A., &MuletForteza, C. (2014). The growth
strategies in the hospitality industry from the perspective of the forgotten
effects. Computational and Mathematical Organization Theory, 20(2), 195-210.
doi:http://dx.doi.org/10.1007/s10588-013-9167-9
Radojevic, T., Stanisic, N., &Stanic, N. (2017). Inside the rating scores: A multilevel analysis of
the factors influencing customer satisfaction in the hotel industry. Cornell Hospitality
Quarterly, 58(2), 134-164. doi:http://dx.doi.org/10.1177/1938965516686114
Vrkljan, S. (2014). The competitiveness of small hotels in transitional countries - the case of
Croatia. International OEFL Conference on Governance, Management and
Entrepreneurship: Zagreb. 960-973. Retrieved from
https://search.proquest.com/docview/1635276828?accountid=30552
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Yazici, S., Köseoglu, M. A., &Okumus, F. (2016). Identification of growth factors for small
firms: Evidence from hotel companies on an island.Journal of Organizational Change
Management, 29(6), 994-1029. Retrieved from
https://search.proquest.com/docview/1844302828?accountid=30552
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