LT6018GN: Strategic Planning for Hospitality Industry Report

This report provides a comprehensive analysis of strategic planning within the hospitality industry, focusing on the successful implementation of strategies and the evaluation of their effectiveness. It examines key factors influencing strategy implementation, such as leadership, structural design, information and control systems, and human resources, with the InterContinental Hotel Group serving as a case study. The report also explores various performance metrics, including Critical Success Factors (CSFs), Key Performance Indicators (KPIs), and the Balanced Scorecard, illustrating their influence on business strategies and performance evaluation within the sector. Furthermore, it delves into the management of strategic change, highlighting key elements and different types of strategic change relevant to the hospitality industry, offering insights into how businesses can adapt and thrive in a dynamic market environment. The report aims to provide a thorough understanding of strategic planning and its practical application within the hospitality sector.

Strategic Planning for the
Hospitality Industry

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................3
LO 4.................................................................................................................................................3
1: Successful implementation of strategies..................................................................................3
LO 5.................................................................................................................................................5
2: Performance metrics and its influence on effectiveness of business strategies.......................5
3: Key elements in managing strategic change and leading types of strategic change..............10
CONCLUSION..............................................................................................................................12
REFERENCES..............................................................................................................................14

INTRODUCTION
Strategic planning is defined as the proper sequencing of the steps which are undertaken
by the businesses to achieve their target. This includes various steps like company's vision,
objective, purpose which should be achieved through systematic approaches which are collecting
the relevant data, analysis of the information, according to that prepare a strategy, then
implement it and at last evaluate the result and if necessary apply the control measures.
Hospitality industry is evolving faster as the global tourism is increasing day by day sop they
have to take the necessary steps to enhance their profits. This industry is working to provide
services and facilities to their consumers, so to be stable in the market they need to change their
strategies of marketing. InterContinental hotel groups established in 2003 in Denham,
Buckinghamshire, England UK. It has about 5000 hotels in 100 countries. It is five star hotel
ranges and contains all the lavish facilities for their customers. They change their strategies
which help them to generate big amount of revenue. In this report discusses on the strategic
planning which is appropriate for the hotel industry. Also, evaluation of the strategies which are
most effective.
LO 4
1: Successful implementation of strategies.
In service industry like hospitality and travel sector, it is necessary to change the business
strategies according to the trend change in the outer world. As they adopt changes in their
working environment it affects their growth (Varma and Chavan, 2015.). People like to explore
new things and new places. In hotels and tourism industry many people are attracted towards
them due to their products and services along with range of facilities they provide to their
consumers.
Organisations which changes their strategies and plan new strategic approaches like cost
differentiation, leaderships, focus etc., or other strategies which leads to growth in business. But
these are affected by some factors which are leadership, structural design, information and
control systems and human resources (Gladysz,2015).
Factors which influences the implementation of strategy
Leadership

It is most important factor that affect the businesses in many senses. Leaders play a major
role to motivate the employees at workplace and maintain dedication in workers to achieve a
common objective. With the help and support the businesses can work smoothly, as the
employees listen to their leader (Ene and Ionescu, 2017). Leadership styles are very much
important because the employees should feel comfortable and should be agree on the points of
the leader. Also, leader has to consider the views and perspectives of the workers. In terms of the
demand of employees, it should raise its voice and talk to upper management in favour of the
labours. So leader can influence the employees to work because he is able to make understand
the employees about new strategy, its working and consequences ion the business, if he will not
support the management then work and new strategy will be failed.
Structural Design
The organisational culture and structure are major for the company, which helps in the
business to regulate its activities. Like the organisational culture Clan culture is appropriate to
adopt at workplace in which all the employee works with mutual understanding and cooperation.
Business structure is about the decision-making is up to certain people like only top-level and
middle level managers are well-known with the change, if the change adopted and it affects the
whole organisation then only it is informed to all the employees of the company (Siswosuharjo
and Listiyoko, 2019). So if employees are not happy in the culture and structure of business then
new strategy implementation will be failed.
Information and control system
Business needs relevant information and system data analysed for their assessments in
terms to changes the strategy of the business. This cause the large impact on the company to
adopt changes in the current strategy. So that if they have proper information then only they
should consider new strategies. When they implement the strategy, so they need to proper
evaluation of it and if they need to apply some control measures or find if there is any need of
change they can do it (Stoynov, 2016). Company should do properly analysis of the needs of the
new strategies otherwise it may result in failure due to unwanted changes.
Human resources
To run any organisation, human resources are necessary. Businesses change their
strategies in terms to regulate their growth. HR helps organise and managing the employees in
the business environment if they recruit new people in their company, and they are unaware of

the policies and rules and regulations of the company so it may loss the business. HR should
provide the new and existing employees proper trainings and development wither on duty or off
duty (Ahmed, and Mukhongo, 2017). Management have to explain the HR strategies properly so
that they can take further action to train the workers in the workplace for successful
implementation of the strategy.
InterContinental hotel groups in UK consider changing their strategy to increase their
business and more people visit their hotel. They apply cost differentiation method, so that
consumers would be attracted to them and chooses to stay there. As they provide package deals
along with food and stay and additional facilities. But these strategies are when proved to be
successful when they got support from the leaders, HR, organisational culture and structure
which let them do their best. As all the employees are dedicated pay their roles and
responsibilities then it made effective because it needs cooperation from all the staff members
including top to bottom level of employees (Silegren and Tuunainen, 2017). If they work with
proper coordination and communication, it would be easy to handle the guests and it leads to
customers satisfaction. The hotel start to prepare a strategic plan and then all other processes
takes place like they gather all the required information, costing of the rooms, food prices of
menu items, facilities they provide to their customers, they find out the productivity cost and try
to cut in it. It leads to profits when they lower their costs for the customers, so they analyse at
what cost they will be able to manage the things. So they set new prices for menu items, hotel
rooms etc. Next they can think about to adopt the trend of fashion like they can change their
décor and other infrastructure (Waswas and Jwaifell, 2019). They may apply the occasional
decoration in their hotel's premises which attracts the customers and at that time they can extra
charge from them. All these strategies should be discussed with the employees of the hotel, as
they give their suggestion and it would be considered by the management team, then it will be
implemented with cooperation of all.
LO 5
2: Performance metrics and its influence on effectiveness of business strategies.
There are various performance metrics which influence the business in their own ways.
Different performance metrics have different criteria of evaluation of the company's performance

(Slabbert and Mukhongo, 2018). Performance Metrics like Critical Success Factors (CSF), Key
Performance Indicators (KPI's), The Balance Scorecard.
Critical Success Factors (CSF)
Critical success factors re mainly used in business sense. It defines the elements for the
business activities to increase its productivity and achieve the target for the organisation. It helps
to growth in the business which leads to success (Martínez-Costa, Jimenez-Jimenez and Castro-
del-Rosario, 2019). The factors which influence the performance of the business. So the
companies should be aware of the factors which affect their business in market either in the
external or internal environment. So these factors are need to analysed by the organisation in
terms to achieve the success. For example the training and development of the employees, data
management and maintaining the quality of the data which helps the company in future
references, paying the responsibilities for the commitment to the customers which leads to
customer satisfaction, orientation of staff members, increasing the communication abilities,
improve the quality of the products and services, etc. all these factors assessments give the
findings about the critical success factors and evaluate the result after having these data reports.
Illustration 1: CSF factors for strategic planning in business

CSF's for strategic planning in business needs to be assessed properly. Elements which
affect the growth of the business because these elements are the key to reach success (Iradianty
and Rohayati, 2017). As the organisation have their own strategies and planning and their pre-
decided goal or mission for which they are doing all the business activities, their main motive is
to earn profitability. So first they make their goal, and then they start to plan to their strategies.
InterContinental hotel is leading name in the hotel industry in London, as they are
maintaining their prestige in market from long time. This is possible because they give the proper
assessment on CSF's, as they prepare the reports, gather the previous data from the record, the
customers record, their sales, they analyse the strategies which they implemented previously,
their employees record how they handle the staff. So these may give them idea to make their new
business strategy.
Key Performance Indicator (KPI's)
Key performance indicator are the key factors which help the business to achieve their
goals, these are measurable values which indicate the strategic objectives of the company that is
where the company want to reach in the future. KPI's are different at different operational levels,
as they have different criteria of measuring the values in separate departments either it is related
to the external or internal environment (Rothaermel, 2017). For example the increment in the
customers segment, percentage of the share in market, etc. these help them to know the
performance of the company.
There are various factors in the hospitality industry for KPI's like accommodations,
occupancy rate, average room price, sales ration, revenue generated at per room, labour cost ratio
etc. so these key performance indicator helps the industry to plan their business strategies.

In the case of the InterContinental hotel they analyse these KPI factors along with the
CSF analysis, as they have exact measurement on the key indicators for their performance they
can manage their business to become the leading name and enhance their profits. They measure
the customers growth, customer satisfaction and also observe the potential customers for their
hotel (Ansoff and et.al., 2018). Next they find out the occupancy rate of the room which gives
them the idea of the sales, also they make the comparison report for the revenues, online
feedback or reviews. That's how they are able to make new strategic planning because it has all
the required data which tells them where is the need of improvement.
The Balance Scorecard
It is different from the CSF and KPI, as this gives the performance measurements as well
as full information about what should be done. It helps the organisation to evaluate the current
situation of the business and enable the management to execute the different strategies with pros
and cons. It aligns the organisational activities to achieve the objective. So over all it improves
the performance in terms of the internal and external operations done by the business, like
improvement in the communication and monitoring the operations which influence the
performance.
Illustration 2: KPI for hotel industry

The balance scorecard maintains the different values in terms of different operational
areas like financial, customers relationship, internal processes, growth and development factors
which should be “balanced” (Cook, 2015). All these perspectives have their own values and
measuring criteria. Hotel industry are wide, and lots of competitors are there in market to take
competitive advantage. So if particular hotel want to be in lead and want to take the competitive
advantage thy need to measures such factors which help them to know their current position.
InterContinental hotel has their own balance scorecard like they measure their
performance using KPI's and CSF's along with the scorecard like they have whole assessment on
different areas for their work. As they maintain the balance oft their performance. Like the facts
and figures help them, to know the customers satisfaction and other demands of the customers
are mentioned, so according to that they plan strategies. If there is any internal dispute or any
leadership issue, like employees are not happy with the management or with their leader as it
dominate the staff (Ginter, Duncan and Swayne, 2018). So the hotel management should focus
on the internal environment to balance the performance. The balance scorecard tells about the
financial condition of the hotel. It tells the revenue growth, target achieved, their invested
amount etc. these help them to analyse their budget for further assistance so that company can
structure the strategy from the financial perspectives.
Illustration 3: Balance Scorecard

3: Key elements in managing strategic change and leading types of strategic change.
Key elements in managing strategic change are Diagnosis, change agents, managing
change strategy, levers for change (Johnson, 2016).
In businesses, there is continuous change is necessary which helps the companies to
grow. In terms of providing better services and products they always have to work and
innovative ideas are used in the market takes speed if people like it. If the companies thinks
about the changes for evolving in better form they have to consider the key elements of strategic
change as follows
Diagnosis
It basically includes the type of change, context of change, forcefield analysis. Change
they want to implement they should find out the different criteria like why they want to change
the strategies they followed, need of change, how the change will impact the organisation, its
consequences, reaction of the employees (Thompson, Strickland and Gamble, 2015). Also, in
what area they need a change so that it provides benefits to the company.
Change Agents
Change agents are those people in the organisation who take initiates for change and try
to cope up in managing the things related to change (Hitt, Ireland and Hoskisson, 2016). So the
Illustration 4: Key elements in managing strategy
change

person or employee or team in the business takes the responsibilities to take the overview on
change.
Managing Strategy Change
Managing the strategy change is very important which the businesses have to consider
the points where the changes affect the most as the consequences are analysed it keeps the
implementation easier for the company. So that organisations have manage the training and
development of the employees in terms of applicability of strategy (Helfat and Martin, 2015).
Same as internally change analysis, companies have to consider the outside consequence of
changes and prepare the control measures for them if any issue is arises.
Levers Of Change
Levers of change are turnaround strategy, challenging culture, symbolic systems, political
systems, communications, routines, change in operational processes etc. (Dawson, 2019). As the
change takes place these factors are important because it provides growth to the adopted
changes. As these levers influence the strategy changes so business have to consider these points.
TYPES OF STRATEGIC CHANGE
 Adaption
 Reconstruction
 Revolution Evolution
Adaption
It is about changes as the change considered by the business, so it is accommodated with
the current condition terms of the culture and structure (Lasserre, 2017). Also, it if the change is
adapted it provides the growth to the company or not.
Reconstruction
Reconstruction means as the business fundamentals sued in the workplace are not change
but there is rapid change in other things. It bases is not touched, which maintains the identity of
the company.
Revolution
In revolution both strategy and organisational culture is changes so that it affects the
whole business.
Evolution

It is about the cultural change in the business environment, change in the cultural values
but according to time.
In hospitality sector there is evolution and reconstruction strategies are implemented
rapidly due to the time change, trend change (Schermerhorn Jr, and et.al., 2019). According to
the fashion, people have changed their demands and needs. So to fulfil customers requirements it
is necessary to adopt the strategy changes.
As InterContinental hotel want to generate higher revenue and more customer satisfaction
which lads them to make brand name in the market and gives the huge profitability. So they
adopt the changes by diagnosing the situation, then they appoint the change agents for the take
care of the change process and managing the change program then they inspect the lever of the
changes like the political condition, economic condition, symbolic system, etc. are analysed that
they assess the influence of the change in their hotel (Vos, 2019). If they need to motivate their
employees they would adopt some other leadership styles so that their worker always active to
give their best.
InterContinental hotel groups are continuously adopting the cultural trend in their hotels,
they implement reconstruction, evolution, revolution, adaption in their hotels which help them to
expand their business in 100 countries. Main reason of their growth is there practice for serving
better to their consumers. As they also apply the Kurt Lewin's Strategy (Burnes and Bargal,
2017) of change in which unfreeze, freeze and refreeze modes are used. Unfreeze if they find the
change is necessary in particular area they change their strategy and accept new technique to
follow at that place. Freeze is they find that implementation of the new strategy is good in terms
to provide growth to them so the freeze on it and enjoy the outcome in positive sense for profits
increment. Refreeze is taking the change cycle again in practice, they find the need of change,
and then they change it again. As these changes are not permanent but gives competitive
advantage to the businesses. That's how the strategy changes helps the businesses.
CONCLUSION
According to the report on the strategic planning in sense of change, it is beneficial for
the businesses as they think about taking steps for the changes. As they find better strategies for
their work it will provide several benefits to the company. Consequences or outcomes are
dependent on the areas of changes which are considered by the organisation. But main motive for