Strategic Management in Hospitality: Ritz Hotel Analysis (HM603)

This report provides a comprehensive analysis of the strategic management of the Ritz Hotel, a luxury hotel chain. It begins with an abstract summarizing the report's content, followed by an introduction to strategic management in the hospitality industry, specifically focusing on the Ritz Hotel Group. The report identifies the hotel chain's mission and objectives, analyzing its purpose and approach. It then identifies and discusses the stakeholders, their significance, and expectations, using a power matrix to classify them. A PESTEL analysis examines the political, economic, social, technological, environmental, and legal factors affecting the hotel chain. Furthermore, a SWOT analysis evaluates the internal strengths and weaknesses, and external opportunities and threats, of the Ritz Hotel. The report concludes with recommendations for the hotel chain's improvement and future success.

STRATEGIC MANAGEMENT
HOSPITALITY RITZ HOTEL

TABLE OF CONTENTS
ABSTRACT....................................................................................................................................3
INTRODUCTION...........................................................................................................................4
Mission........................................................................................................................................4
Stakeholders.................................................................................................................................5
Mendelow Matrix........................................................................................................................8
PESTEL Analysis........................................................................................................................8
SWOT Analysis.........................................................................................................................11
Recommendations......................................................................................................................13
CONCLUSION..............................................................................................................................14
REFERENCES..............................................................................................................................15

ABSTRACT
This study depicts the hospitality giant Ritz’ strategic management. The study talks about the
mission of the hotel chain and its analysis. It describes the stakeholders of the hotel chain group,
their significance and the macro-economic factors affecting them in a form of PESTLE analysis.
As the hotel chain operates in different countries, affecting factors have been taken as having a
wholesome impact. It provides matrix for classifying them as per their power distribution. It
talks about the SWOT analysis reflecting on the internal factors like strengths, weaknesses,
opportunities present in front of them and threats to the organisation; the analysis has been done
critically and recommendations for the hotel chain in the end of the report of what measures can
be taken for the betterment of the organisation.

INTRODUCTION
The report is about strategic management in hospitality. The organisation being taken for case
study is Ritz hotel group. It is an American multi-national company which operates the luxury
hotel chain known as The Ritz-Carlton. It has 108 luxury hotels and resorts in 30 countries and
territories in addition to 46 hotels which are coming up new. The mission of the hotel chain has
been discussed in the report. Stakeholders of the organisation will be discussed in a power
matrix. PESTLE analysis is going to be provided reflecting their decisions. SWOT analysis of
the company will be done reflecting on the internal factors.
Mission
Ritz has the mission statement as ‘to provide the finest personal service and facilities for our
guests who will always enjoy a warm, relaxed, yet refined ambiance.’ (Lee and Kwag ,
2017)
Also, the mission statement includes the highlights:
a) Recognising the administration.
b) Improving the people group.
Philosophy of the company tells that is enthusiastic to serve its customers. Its responsible in its
operations and this has made the hotel chain pioneer because of extraordinary skill displayed
(Bover and et.al., 2020).
The hotel chain recognises that the need of customers is to take an off from their busy schedules
and rewind at a place which can provide them the best facility and service to make their trip
enjoyable. Hotel ambiance has been therefore carved in a way that from the very starting
customer can feel about his stay and providing world class service and facilities for making a
long customer relationship with them.

Stakeholders
Stakeholders Their significance Needs and
expectations
Owners They are people owning the chain of hotels
managed by Ritz hotel. This segment include
franchise, partners of the hotel chain and
referral group. They are the internal
stakeholders of the hotel chain.
They look for
increasing brand
value and get
increased return on
investments.
Management Management looks after the hotel operations,
employs people and monitors the work. They
also take decisions regarding hotel. They are
the internal stakeholders. Their significance is
in worthy decision-making for the hotel chain
group.
They would look for
policies to work and
bring in more of
capital investment.
This will help in
increasing their
returns on
dividends.
Employees Employees are the internal stakeholders who
work for the hotel. They are employed in
different sections like operations, marketing,
maintenance at Ritz hotel (Bover and et.al.,
2020).
They look for
growth of
company’s business
which can lead them
to incentives and
salary increments.
Customers The hotel receives guests and visitors from a
number of countries in form of tourists,
delegates and business men. They are
prominent for any business. They act as
There are customers
who expect class
facility from Ritz
hotel and make their

external stakeholders for the business. trip a success. Some
customers invest in
the hotel if they find
scope for growth in
it and thus become
external
stakeholders. They
expect return on
their investments.
Suppliers The raw materials needed by the hotel like
accessories in rooms, furniture, bathroom
fittings etc. are made available by them which
helps in functioning of hotel. They are the
internal stakeholders.
They would like to
have a fair deal
where they can get
more monetary
consideration and
would like hotel
grow bigger in
market.
Government Government is an external stakeholder ruling
the nation and making policies for the various
sectors of growth. The significance for
hospitality sector is the policies made towards
this sector and the budget allotted for
upgrading the sector by government.
Government would
assist in private
sector operations as
it would mean more
business, higher
GDP and bringing
more employment
in the country.
Local
community
They are the domestic people living in the city
where hotel is located, can be small
businessmen who have opened their shops
near the hotel for customer footfall for
Corporate social
responsibility
measures are
expected by them.

services. Those who are
small-scale
shopkeepers expect
to grow their
business through
customers of the
hotel and fulfilling
their requirements.
Investors People who invest their money in shares of
company and also assess the annual report
and financials for company performance.
Their significance is that they help business to
increase capital by equity.
Return on
investment
Affiliates They are people or small companies who are
affiliated to the organisation and they can be
minority shareholder in the organisation.
They would like the
hotel to increase
their services with
them and become a
prominent
shareholder with the
business.
Travel agents They are the people who are adjoined with
tourism and hotel industry, would refer hotel
to tourists while making bookings for them,
also take the customers around the city’s
attractions at places of interest (AL-Sultani
and AL-Da'ami, 2018).
They would want
hotel to tie-up with
them as they can get
commission for
bringing in
customers and
earning profits.

Mendelow Matrix
High power (keep satisfied)
Affiliates
Customers
Government
(Manage closely)
Management
Owners
Low power (Monitor minimum effort)
Local Community
(keep informed)
Suppliers
Travel agents
Employees
Low interest high interest
PESTEL Analysis
PESTEL The factors affecting the stakeholders Stakeholders
Political The countries in which Ritz operate face different
government policies and each country’s political
relations with each other are different. For
example, the United Kingdom moving out of EU is
a political factor. Br-exit will have a major effect
on the economy (Perera, 2017). As a result of its
expansion into neighbouring European countries,
Ritz will now have to deal with these changes,
which may decrease the company's revenue. The
organisation must change its policies accordingly,
whether long-term or short-term, as a result of
government reform, which has an effect on
economic stability. Ritz has held the crisis in the
spotlight and, as a result, has only introduced short-
term, effective initiatives.
Government
Local
authorities

Economic Increasing fuel costs, for example, may have an
effect on the hotel logistics, forcing the company to
raise customer prices as a result. The organisation
is known for its pricing strategy, which is likely to
have an effect on the company's policies. The
organisation must make some cost reductions in its
operations to meet the demands of its customers.
Other factors like rising inflation, rise in service
charges, cost of accessories is also a concern to be
addressed.
Customers,
Travel agents
Social The customers of the hotel are from varied places
and thus the social factors are too different.
However, a thing which is common socially is that
customers would like to receive value and good
customer service. Different age groups of people
visit here with different needs and this is what the
organisation needs to survey and fulfil the needs
(Perera, 2017).
Customers,
local
community
Technology As Big Data and Artificial Intelligence become
more common, Ritz must adapt to technological
advances such as analytics for keeping the
customer data and its security. These variables
have an effect on how business is done on a daily
basis. Employees will be expected to learn these
skills, as well as a greater focus on data collected
online by customers' feedback in the hotel, as a
result of the change in the hospitality market. Ritz
must also meet the increasing demand for online
booking among the youth customers as a trend and
Suppliers,
employees,
customers

extend the online customer service operations.
Environment Since Ritz is a hospitality corporation, it must
comply with various environmental regulations
prevailing in different countries of its operation.
Environmental factors must be addressed, such as
obtaining environmental clearances, reducing
carbon emissions, doing one's part to promote
forest cover and water replenishment activities, and
doing one's part for society by assisting
underprivileged people (Policy,2018).
Community
Legal The country's legal system is not strong enough to
secure an organization's intellectual property rights.
The company must weigh the pros and cons of
entering new markets to ensure that their
innovations are not stolen by competitors seeking a
competitive advantage. Ritz has to consider and
understand antitrust law, copyright law,
trademarks, job law, health and safety law, and
other rules.
Government

SWOT
Strengths
Employees have been delegated power and
thus best service is given.
Global presence is there of over 70 hotels and
resorts.
There is goodwill from employees and
customers.
Increase in repeat sales with reward programs.
Brand value is added by parent company.
Logo and communication with existing and
potential customers has been well received.
High brand loyalty and aspiration is there.
Weaknesses
Brand name has a perception of being very
expensive.
Rising inflation is taking toll on purchasing
power.
Threats
Rising costs for operations which are affecting
hotel rates
Decline in tourism due to pandemic
Global intense competition from big as well as
local hotels
Opportunities
Increase in clientele by special package and
tie-ups with corporate
Expansion in global tourism
Travellers for good destinations.
SWOT Analysis
Strengths The hotel has presence in the right locations
with some of the best places in the world. The
locations have been decided based on research
of where customers would prefer to avail
luxury accommodation. Hotel do not negotiate
on the property prices and make sure that they
get the options which are best in locations

which are preferred by the customers.
However, this also leads to rise in costs for the
hotel chain and requires lot of investment
which ultimately affects the transaction or
service costs for customers. Hotel chain will
have to find ways to bring down operational
costs which does not lead to increase in prices.
The employee pool of talent has been selected
by a procedure which is apt and training
offered to them is of the best level in the
industry. The salaries and training costs being
on the higher side has to be managed by hotel
chain management team. There also exists high
synergy among stakeholders.
Weaknesses As competition has increased in the luxury
hotels, it has been left only to guest
experiences to make a difference. Experiences
are defined on an individual level which
signifies the level of customisation being high
(Vlados, 2019). The customer fluctuating
demands also vary across regions and every
culture has different view of luxury and value
which they attribute to each aspect of service
can be different. For Ritz which has hotel
chains across the globe, finding what each
customer segment wants and to create those
facilities is near to impossible. However, there
are ways in which it can be monitored by
conducting a research on a sample of
population where the hotel chain operates and

incorporate their feedback in hotel operations.
This can help achieve customer satisfaction to
a great extent.
Opportunities There has been a surge in demand for luxury
needs like cars, expensive homes etc. thus, also
has the need emerged of luxury suites and
hotels with foreign delegates visiting the hotels
and number of tourists coming in from outside.
It can be treated as an opportunity for business
expansion for Ritz. Although, the hotel chain
also has to be aware of the costs which can go
in increasing of services, which can affect the
operational costs. Hotel chain has to look for
innovative techniques which can help grab this
opportunity with remaining in budgetary
constraints.
The increasing globalisation has also created
investment forums around the world which
invest in growing businesses like hospitality
sector and thus can benefit Ritz. This however,
also increases the responsibility of the hotel
chain to maintain its status quo to attract and
benefit the investors.
Threats The threat existing is mainly of competitors
which exist in hospitality and thus can decrease
the market share of the hotel. However, this
presents an opportunity to the hotel chain to
devise methods through innovation to make
customer experience better across its hotels

around the world and can also attract customer
attention through its CSR activities. Increase in
costs have affected indirectly on the hotel rates
and need to be addressed (Gürel and Tat,
2017). The pandemic spread across the world
has led to a major decline in tourism across the
world thus affecting the hospitality chain.
Although, after advent of vaccine, situations
are improving and hotel chain has to make sure
that their hotels are following proper sanitary
measures and prioritising safety for customers.
Recommendations
As per the SWOT analysis, recommendations can be given that company can cash in on the
strengths by promoting and advertising them. The company can get more of tourism in this
manner as customers will see the plus point of location being strategically placed. On the
weaknesses, the hotel chain will have to keep doing something afresh and new which can please
customers and provide the best service possible with taking feedback from them. This will
differentiate their hotel from others. It is difficult to get a know how of different tastes of
customers at different places, but as and when customers of different countries visit the hotel, the
managers can have a friendly conversation with them and know what are the things people from
their location wish for and accordingly note them. Speaking of opportunities, organisation can
take help of government and angel investors to generate more capital for expansion. These
measures will also help in facing the challenge of competitors (Vlados, 2019).
As of the Pestle analysis, it is notable how different stakeholders react and thus
organisation has to take measures which can keep them aligned with the hotel chain for long by
addressing the changes.

CONCLUSION
It can be concluded that Ritz hotel chain has a number of internal and external factors affecting
the organisation. Ritz hotel has to consider all these factors which affect the organisation and
accordingly take decisions which are for the betterment of organisation. The organisation has a
mission which is worth acknowledging and the commitment too. However, keeping in pace with
the factors affecting stakeholders, competition prevalent, socio-economic factors discussed
organisation will have to take steps which can address the issues and move the momentum of the
business further.

REFERENCES
Books and journals
Bover, A., Torres, J., Bitlloch, C.H. and Vilà, J., 2020. Skylight of the hotel RITZ: case
study. Glass Structures & Engineering, pp.1-12.
AL-Sultani, H.A.K. and AL-Da'ami, N.A.A., 2018. Hotel experiences in quality control: Ritz
Carlton's example. Ahl Al-Bait Jurnal, 1(22).
Perera, R., 2017. The PESTLE analysis. Nerdynaut.
Policy, P., 2018. What is pestle analysis.
Khuadthong, B. and Kasim, A., 2020. A literature review. The Routledge Handbook of
Community Based Tourism Management: Concepts, Issues & Implications, p.307.
Vlados, C., 2019. On a correlative and evolutionary SWOT analysis. Journal of Strategy and
Management.
Gürel, E. and Tat, M., 2017. SWOT analysis: a theoretical review. Journal of International
Social Research, 10(51).
Teoli, D. and An, J., 2019. SWOT analysis.
Lee, J.W. and Kwag, M., 2017. Corporate marketing strategy using social media: a case study of
the Ritz-Carlton Seoul. Journal of Asian Finance, Economics and Business, 4(1), pp.79-86.

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