Strategic Planning for Hospitality Industry: Rafayel Hotel

This report analyzes the strategic planning process within the hospitality industry, focusing on the case of Rafayel Hotel & Spa. It explores the factors crucial for implementing a franchising strategy, particularly in the context of expanding into new markets like Australia. The report details the importance of a loyal customer base, clear market positioning, expert operators, stock control, brand establishment, and a skilled workforce. Furthermore, it examines performance metrics, including critical success factors and key performance indicators (KPIs) such as profit, revenue, and cost analysis, along with the use of a balanced scorecard. The study also investigates creative business strategies, such as pricing and product differentiation, essential for future growth and maintaining a competitive edge in the hospitality sector. The report emphasizes the significance of adapting to market changes and customer preferences to enhance business productivity and overall success.

Strategic Planning for
Hospitality Industry
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Table of Contents
INTRODUCTION...........................................................................................................................3
Analyse the most suitable factors to implement chosen strategy................................................3
Analysation and evaluation of different performance metrics are need to be perform...............5
Research about the various creative business strategies for the future growth of organisations
and to become competitive in hospitality industry.....................................................................7
CONCLUSION ...............................................................................................................................9
REFERENCES..............................................................................................................................10
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INTRODUCTION
Strategic planning is a process of formulation of new and unique business strategies and
this process is continuous in the nature (Phillips and Moutinho, 2014). The report is based on the
Rafayel Hotel & Spa which is dealing in hospitality industry and is one of the famous luxuries
five star hotel established in Paris. The topics covered in report are factors to implement the
appropriate business strategies, the formulation of strategies which provide competitive benefits
and the measures in order to improve the performance in the business.
Analyse the most suitable factors to implement chosen strategy.
The strategy that was selected in this assignment is franchising and Australia is the
country where the franchise of Rafayel Hotel & Spa is adopted.
Franchising: The basis of franchise is marketing concept that is followed by company as
a strategic tool for expansion of business. It is a joint venture between franchisee and franchisor.
The real owner of the business is franchisor (Sotiriadis, 2015). They sale the right to use its
brand name and idea to other by charging some amount for their name and fame. The franchisee
purchase the right to sell goods and services of franchiser under an existing trademark and
business model. It give support to the entrepreneur who are interested to introduce new business
in the market and requires professional service for business idea. For this franchisor charge
annual licensing fees and initial start up fee to franchisee. The main advantage to buy franchisee
is to establish business by using established brand name that avoid the chance of failure because
the popular brand already create the good image in the mind of customers so it attract large
number of new as well as existing customer. Finally for the operation sales franchisor take
ongoing royalties. In context of Rafayel Hotel & Spa they should focus on expanding their
business by opening its unities in different countries such as USA, Africa and many more.
Trademark is a symbol, design, logo and sign that differentiate goods and services from
other competitors product. By using different colours, designs, size trade mark is made as it help
public to recognise the symbol of particular brand.
Royalty: It is a form of payment that bind the enterprise, individual, company legally for
the ongoing use of their assets or brand name (Aldehayyat, 2011).
Various factor that need to be consider to implement franchise are describe in detail in
below mention points.
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Having royal customer base: Likelihood can be improve through their loyal customers
as it make the clients repeated buyers. Rafayel Hotel & Spa attract large number of clients
towards their brand and try to retain that customers for long term as it provide strong base to
continue earn revenues.
Have clear market position: It is necessary for each franchisee to adopt and follow
same business structure that is fix by their franchisor. The customer and business can aim for the
same target market with a defined market position. Rafayel Hotel & Spa have well established
position in Paris as it create good brand image in hotel industry but by expanding business in
Australia they need to provide some unique facilities and services. It has large exhibition space
as well as largest spa and beauty treatment with expert professionals and gym facility with
international trainers. Due to their excellent services it create great position in the market as it
attract large number of tourist and local audience (Elbanna, 2016).
Operators must be business expertise: With the guidance and leadership by expert
franchisor, franchisee take advantage to grow business model in future. As Rafayel Hotel & Spa
open their business in Australia so they must appoint expert and talented employees as operator
who have good experience in hotel industry. Due to their expertise knowledge there is reduction
in wastage. As expert business operators by eliminating unnecessary cost maintain the profit
margin of the industry (Cvelbar and Dwyer, 2013).
Ability to control stock on hand: By controlling stock on hand it become easy to meet
demand of customer and it reduce the cost of inventory and ensure appropriate stock turn. As
Rafayel Hotel & Spa control their stock because they charge low margin of profit so they
believe that to become successful there is need to minimise wastage. As it expand their business
in many different locations like Australia, there is need to control stock on hand so that goods
and services are available at every point of time. It satisfy the customers by providing facilities
as per their requirement (Bryson, Edwards and Van Slyke, 2018).
Establishment of brand name: Most of the franchises establish brand name and people
buy specific product and services with the help of franchise license. As it is beneficial for
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franchisers because recognisable brand name create awareness among consumer so they know
what they really wants to purchase. As there is no need for Rafayel Hotel & Spa to create brand
image because it already establish. Rafayel Hotel and spa setup their business with opening hotel
in Australia so due to their excellent infrastructure, facilities and services they maintain their
brand image in the minds of local residents. Due to their great infrastructure it distract the
attention of public towards their brand that tends to increase revenue of hotel also (Köseoglu and
et.al., 2013).
Workforce: Franchisees should ensure that employees have deep knowledge so that they
can give sound advice and quality customer service. To expand business in Australia, large
volume of staff workers are require so it is necessary for Rafayel to appoint talented and
experience employees. Proper training and personality development programme are also need to
arrange by hotel industry so there is reduction in wastage and deficiencies involved. And by
maintaining good quality and services it creates good image and trust in minds of people.
Analysation and evaluation of different performance metrics are need to be perform.
Performance metrics: It involves data representative along with figures of company's
action, overall quality, ability. To measure activities behaviour and performance it is to be use. It
represent in data format. With in a range it measure data, allowing a basis to be formed by
supporting the achievement of overall business objectives. How employees are working it is also
be measured by Rafayel Hotel & Spa with the help of this. Product usability can also be
evaluated with the help of this tool. Employees performance metrics are method to track how
well the employees are performing. It is tricky to implement them in a right manner. As it give
benefit to both employees as well as for organisation. Metrics are split into four main categories
for example work quantity metrics, work quality metrics, work efficiency metrics, organisational
performance metrics. The main role of performance metrics are to give quantified definition of
what is important and the way organisation is performing. To motive workers and organisation
towards regular improvement. To give a mean to link organisation and individual performance to
reward system (Chung and Parker, 2010).
Performance measurement life cycle are define, measure, learn and improve.
Different performance metrics that require to be perform are explain in the below
mentioned points:
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Critical success factors: It target those thing that make impact on cost, quality, market
share, customer satisfaction, and increased revenue. Clear strategic targets are a pre requisite for
factors related to critical success. With the help of key performance indicator, performance will
be measured by Rafayel Hotel & spa. It is necessary to achieve organisational objective. Without
these factors business cannot road map to investigate their operations. On the basis of SWOT
( strength, weakness,opportunities, threat) the identification of factors should start. From the
stakeholder group like middle management, executive management, supplier, staff, customers,
partners assembling of critical success team is to be done. The mission of the team is to identify
those factors of critical success that are important to achieve the goals that was identifies in
strategic plan (Bagdan, 2013).
Key indicator of performance: It measures the success of the company as it is a set of
industry peers, targets and objective. It can be financial including income minus certain
expenses, net profit, and the current ration that reflects the liquidity and availability of cash. The
important key factors are explain as follows:
Profit: Gross and net profit are not forgot to analyse to understand better how successful
is the organisation, is the business generate high return.
LOB revenue v/s target: In this comparison is done between actual and projected revenue
. with the help of chart discrepancies are to be identifies
Cost: cost effectiveness is to be measure and find out the best manner to reduce and
manage cost.
Regional sales: The region that are meeting sales objective are analyse so that we can get
better feedback for underperforming region.
LOB expenses v/s Budget: Comparison between actual and forecasted budget is to be
done. By finding the deviation, more effective budget is prepared in future (Abraham, 2012).
Balance score card: It is a tool of strategy performance management as it is used by
manager to track execution of activities by staff with in their control and to monitor the
consequences arising from these action. Balance score card is use to do identification,
improvement and control over various functions of business and their resulting outcomes. To
communicate what organisation try to accomplish it is to be judge for that allocation of day to
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day work is done in Rafayel Hotel & spa that everyone is need to be perform with applying smart
strategy.
Research about the various creative business strategies for the future growth of organisations and
to become competitive in hospitality industry.
From the above study it has been considered that business strategies are very important in
order to attain success in the marketplace. If strategies are formulated properly and efficient
implementation of strategies take place then it becomes simple for management to conduct the
operations of business and helps in increasing the productivity of the business (Huang and
O’Brien, 2015).
The business strategies which are selected by the Rafayel Hotel & Spa in order to maintain its
position in market are as follow-
Pricing strategy- Price is the most crucial factor as customers look for price of the
product or services and compare it with the quality in order to make sure that price is worth it or
not. If organisation is providing products and services with good quality then it will be the great
opportunity for the company to attract new customers and encourage them to buy the products
and services of the company. These actions helps in increasing the sales and profit volume of the
organisation. Hence, in order to maintain its position and brand name in the marketplace it is
important for organisation to focus on the pricing strategies for better future performance. In
context of Rafayel Hotel & Spa the are using this strategy by offering services at quite high
prices along with all type of luxuries to its guests in comparison to other competitors, which is
providing support to business in attaining competitive advantages.
Product differentiation- It is a approach by which organisation tries to provide products
and services which are different and unique in nature and helps in capturing the big area of
market and also helps in increasing the level of business and the competition in the marketplace.
The main focus of the organisation is to provide much better and attractive products and services
from that of other competitors so that it can attract the large group of customers towards itself.
Due to changes in the environment and the changes in the needs, preferences and desires of the
customers it is very crucial for organisation to analyse and consider them and take actions
accordingly (Solnet, Kralj and Baum, 2015). With the help of research and development team
company identifies the changes and new trends that are taking place in market and according to
them the changes and innovations are made in the products and services of the organisation in
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order to accomplish the desire results and to increase the profit margins. This strategy is concern
with the future and is adopted by Rafayel Hotel & Spa in order to meet the needs and desires of
its guests and to satisfy them.
Improvement in customers services- This is one of the most important business strategy
which is used business organisations in order to improve its relations with the customers and to
build strong relations with them. The good relations with the customers helps in better
understanding of customers and their taste and preferences so it becomes easy for the
organisation to make changes in its product line and if there is need top add more items in its
product line (Rodríguez-Antón and et.al., 2012). The company should focus on providing
effective customer service support to the customers as at some points customers face difficulties
and challenge in understanding the products and also while selecting the products so in this case
they want support from company side. Moreover this is the great opportunity available with the
company to gain the trust of the customers by supporting them and solving their issues. In
context of Rafayel Hotel & Spa they are focusing on improving its customer services and
provides 24*7 hours support to its guests in order to provide them convince and full facilities.
Digitalisation and new technology- With this changing scenario the changing working
environment there is more demand for machine based work and the manual activities and
functions are reduces. Moreover with the use of latest technology, machines and equipments the
demand for man-power has reduced (Soulard and et.al., 2018). In context of Rafayel Hotel &
Spa, they are using digital ways and techniques in its business operations which has benefited
them. They are able to provide full support to its customers with the help of digitalisation and
require less man power due to use of machines which has helps in saving the cost and expenses
of the company. Rafayel Hotel & Spa is belonging to hospitality industry and focus on
improving its chatbots, check out process, smart rooms, robotics delivery, etc. which is helping
company in improving its relations with customers, maintaining its brand position in marketplace
and maintaining the competitive advantages.
Promotional business strategy- The company has established its brand name across the
globe so need not to invest more in promotional activities. With the use of digital media Rafayel
Hotel & Spa are attracting and making people aware about its new additions, features and
services (Law and et.al., 2013). They are also using online marketing and magazines in order to
inform the people and is trying to deliver proper and great services to its guests.
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Level of quality and hygiene- With the changing nature and preferences of people they
are more concern about their healths and prefer going to places where good quality services are
provided and the proper hygiene is maintained. In context of Rafayel Hotel & Spa the
management focus on clearness, hygienic and sanitized rooms so that guests do not face any
problems related to clearing (Kotler and et.al., 2017).
Competitors- Rafayel Hotel and Spa is belonging to hospitality industry where level of
competition is high (Lopes, 2016). Its competitors are Marriott, Hilton and many more who are
able to make their brand name in marketplace by adopting effective strategies. By using various
digital platforms the competitors are providing information to its potential customers regarding
offers and discounts. Moreover with the help of visual content they are able to engage and attract
more number of customers. Rafayel Hotel and Spa should focus on improving its marketing
starategy and should focus more on digital marketing.
Illustration 1: Competitive strategy 2019
Hence, after analysing and evaluating these business strategies if company consider and
included them in its operations it will help in increasing the profits margins.
CONCLUSION
From the above study it has been concluded that strategies are very essential for the
success of business that is with the use of efficient business strategies the operations of business
become easy to perform and provides the desire results on time. There are so many different
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factors (external and internal) which need to be considered by organisation in the process of
strategy formulation. All these factors are important as it helps in increasing the level of
productivity and profits of the organisation.
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REFERENCES
Books & Journals
Phillips, P. and Moutinho, L., 2014. Critical review of strategic planning research in hospitality
and tourism. Annals of Tourism Research, 48, pp.96-120.
Aldehayyat, J.S., 2011. Organisational characteristics and the practice of strategic planning in
Jordanian hotels. International Journal of Hospitality Management. 30(1). pp.192-199.
Elbanna, S., 2016. Managers' autonomy, strategic control, organizational politics and strategic
planning effectiveness: An empirical investigation into missing links in the hotel sector.
Tourism Management, 52, pp.210-220.
Cvelbar, L.K. and Dwyer, L., 2013. An importance–performance analysis of sustainability
factors for long-term strategy planning in Slovenian hotels. Journal of sustainable
tourism. 21(3). pp.487-504.
Köseoglu, M.A. and et.al., 2013. Linkages among business strategy, uncertainty and
performance in the hospitality industry: Evidence from an emerging economy.
International Journal of Hospitality Management, 34, pp.81-91.
Chung, L.H. and Parker, L.D., 2010, March. Managing social and environmental action and
accountability in the hospitality industry: A Singapore perspective. In Accounting Forum
(Vol. 34, No. 1, pp. 46-53). No longer published by Elsevier.
Bagdan, P., 2013. Guest service in the hospitality industry. John Wiley & Sons, Inc.
Abraham, S.C. ed., 2012. Strategic planning: A practical guide for competitive success. Emerald
Group Publishing.
Huang, C. and O’Brien, K.M., 2015. The impacts of perceived environmental uncertainty,
outlook, and size on strategic planning in private clubs. Journal of Hospitality Marketing
& Management. 24(5). pp.554-571.
Solnet, D., Kralj, A. and Baum, T., 2015. 360 degrees of pressure: The changing role of the HR
professional in the hospitality industry. Journal of Hospitality & Tourism Research.
39(2). pp.271-292.
Rodríguez-Antón, J.M. and et.al., 2012. Use of different sustainability management systems in
the hospitality industry. The case of Spanish hotels. Journal of Cleaner Production.
22(1). pp.76-84.
Law, R. and et.al., 2013. Progress and development of information technology in the hospitality
industry: Evidence from Cornell Hospitality Quarterly. Cornell Hospitality Quarterly.
54(1). p.10-24.
Kotler, P. and et.al., 2017. Marketing for hospitality and tourism.
Lopes, M., 2016. The hospitality industry(Doctoral dissertation).
Soulard, J. and et.al., 2018. Social capital and destination strategic planning.Tourism
Management. 69. pp.189-200.
Bryson, J.M., Edwards, L.H. and Van Slyke, D.M., 2018. Getting strategic about strategic
planning research.
Sotiriadis, M.D., 2015. Culinary tourism assets and events: suggesting a strategic planning tool.
International Journal of Contemporary Hospitality Management.
Online
Competitive strategy 2019. [online available
through;<https://assets.publishing.service.gov.uk/government/uploads/system/uploads/
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