Swiss-Garden Hotel Melaka: Tourism Sector Analysis and Strategy Report

This report provides a comprehensive analysis of the Swiss-Garden Hotel Melaka, focusing on its performance within the tourism sector, particularly in the context of the COVID-19 pandemic. It begins with an introduction to the hotel, highlighting its luxury offerings, strategic location in Melaka, and its commitment to excellence. The report then delves into a detailed situation analysis, utilizing both SWOT (Strengths, Weaknesses, Opportunities, Threats) and PESTLE (Political, Economic, Social, Technological, Legal, Environmental) frameworks to assess the hotel's internal and external environments. The PESTLE analysis examines the impact of political policies, economic downturns, social changes, technological advancements, legal regulations, and environmental factors on the hotel's operations. The report also discusses the hotel's response to the pandemic, including the adoption of new policies and technologies to ensure guest safety and maintain business continuity. Limitations of the report include its focus solely on the Swiss-Garden Hotel Melaka and its confinement to the Malaysian context. Overall, the report offers valuable insights into the challenges and strategies of a luxury hotel adapting to the dynamic landscape of the tourism industry.

1.0 Introduction
The organization that has been chosen for this assignment is Swiss-Garden Hotel
Melaka. Located in the historic state of Melaka, built in the spirit of cultural
diversity, the Swiss-Garden Hotel Melaka is a luxury hotel offering a peaceful and
spacious relaxation in the sky. The lavish, tallest hotel in the state, ideally
situated overlooking Melaka's UNESCO World Heritage zone, has 306 guest
rooms with excellent facilities and an adjoining shopping complex that allows
guests to enjoy the best experience.
For Swiss-Garden Hotel, they bring together a variety of diverse skillsets,
integrating hotel transaction and growth experiences with operations and asset
management, providing a strong backbone to include the full range of
experience in hotel management. Swiss-Garden team has professionals that
possesses an entrepreneurial spirit and knowledge-based and experience-driven
outcomes. Through our methodical approach, embracing this expertise and
awareness of our property is bound to bring success to the hotel. The core values
that Swiss-Garden possessed are forward thinking whereby they will always keep
on moving, excellence by adopting and maintaining the consistency of the
standard that the hotel holds, people driven by creating an environment where
all people are welcomed, humility and respect towards the guests and integrity
by being in the Swiss-Garden team with a welcoming heart.
Besides that, the hotel business environment is complex, as it is often
developing and constantly changing. Swiss-Garden team believes that in the
right technology and infrastructure, the hotel can be in sustained and also
remain competitive and will be able to outperform local and global rivals. The
main objectives of the hotel are drives financial performance, deliver operational
excellence and optimize guest satisfaction.
The scope of this report from Swiss-Garden is to show their main strength in the
tourism sector in this COVID-19 era as the economy for the tourism sector is not
looking very good for the time being. They also analyze their hotel by using the
SWOT which are Strength, Weaknesses, Opportunities and Threats and also
PESTLE analysis which are Political, Environment, Social, Technological, Legal
and Economic.
The limitation of the report is that this report is only about the Swiss-Garden
Hotel Melaka and the analysis, thus this report cannot be use as a whole for the

tourism sector in Malaysia. Boundary of country is also the limitation as this
report take place only in Malaysia.
2.0 Background of the Organization
As a whole, Swiss-Garden International (SGI) was founded in 1991 as a hotel
operator for the OSK Group to manage hotels and as a hotel management
company to assist hotel owners with hotels operated by third parties.
Now, with an inventory of over 2,000 guestrooms, Swiss-Garden International
has now currently manages and operates 8 properties. Swiss-Garden
International's approach to driving financial returns from hotel investments is
owner-focused. Here in Malaysia, the Swiss-Garden International is undertaking
management projects and aims to expand throughout the Asia Pacific region.
Swiss-Garden Hotel Melaka is a luxury hotel that offers a serene and luxurious
retreat in its care. It lives in the historic State of Melaka that is filled with the
spirit of cultural difference. It has 306 guest rooms with first class facilities and
also an adjoining shopping complex that allows the guests to maximize their joy
in staying with Swiss-Garden hotel. The Swiss Garden Hotel Melaka is set around
the state's historic tourist sites, and Melaka's famous Jonker Street is just a 15-
minute walk from the hotel. Guests can also take an enjoyable walk along the
bank of the river that flows around the hotel overlooking Kampung Morten, a
traditional Malay village in the middle of the city.
Today, the Swiss-Garden Melaka is building a sustainable future for the hotel to
adapt with the current situation such as the COVID-19 that brings huge impacts
towards the economic worldwide. Therefore, it is important to build a future that
looks in the economic sector that will bring benefits towards the economy and
also the people as well.

3.0 Situation Analysis of Swiss Garden Hotel Melaka
3.1 General Environment Analysis
An environmental analysis is strategic method. It is a method of recognizing all
the external and internal elements that can influence the efficiency of the
company. The analysis involves determining the degree of danger or opportunity
that the variables might present. These judgments are later translated into the
framework of decision-making. The research helps to match plans with the
environment of the company (Contributor, 2015). It is also known as the PESTLE
analysis which stands for Political, Economic, Social, Technological, Legal and
Environment. Then, all the factors that are important for Swiss-Garden Hotel
Melaka as this framework also defines what the hotel should do to achieve their
organization’s goals.
Political
This factor takes into account the current political situation of the country. It also
shows the impact of the global political situation on the nation and company.
According to Dandy Koswaraputra (2020), Prime Minister Muhyiddin Yassin said
the government will aim to make tourism companies in Malaysia more
competitive, while at the same time supporting sustainable and inclusive sector
growth and future disaster planning by launching National Tourism Policy (DPN)
2020-2030 online. The prime minister stated that digital technology-based
tourism industry development is important in order for the objective of the policy
could come to fruition. Furthermore, Malaysia will set up Special Tourism
Investment Zones for tourism projects as part for the new tourism policy to
improve the public-private collaboration and draw more local and foreign
investment. Thus, this can be an opportunity for Swiss-Garden to expand their
business and adapt to the new change in the tourism industry.
Economic
All the determinants of the economy and its condition include economic factors.
There are variables that can decide the direction in which the economy can
travel. So, depending on the environment, companies evaluate this aspect. In
line with shifts, it helps set up plans. According to Vasantha Ganesan (2021), the
COVID-19 pandemic brought the tourism sector to a complete standstill as the
government, along with its partners around the world, took steps to curb the
spread of the virus by closing borders, which causes serious job and revenue

losses. Most hotels shuttered, while as their finances dried up, some travel
agencies and companies folded. She further added that the tourist’s arrival to
Malaysia decreased by a massive 78.6% in the first nine months of the year to
4.29 million from 20.1 million in the previous years. Before the borders were shut
on March 18, most of the visitors, or 4.23 million, had arrived. As a result,
tourism receipts, the third-largest revenue contributor in the region, plummeted
80.9% from RM66.1 billion in the previous corresponding year to RM12.6 billion.
Losses of more than RM100 billion in total were incurred by the industry and
associated economic activities. To help it recover, the industry is now turning to
the domestic market. To assist the industry and make Malaysia a preferred
tourism destination, the National Tourism Policy was introduced.
Social
This factor varies from each country as there is distinctive mentality in each
country. Having such views can impact the organization. Sales of goods and
services may be eventually be influenced by social factors. For Swiss-Garden
Hotel Melaka, it is more focused on the customers as they are the main source of
income. Due to the COVID-19 pandemic, the tourism sector took a major hit as
most of the business in this sector is forced to shut down. Despite that, Swiss-
Garden has adapted to the new norm to continue operating under this pandemic.
Since the procedure during this pandemic is not to have a group of people in an
open space or crowded, Swiss-Garden operates by having a new policy which is a
group of people should not be more than 2 people as it is also to avoid the virus
to be spread around easily, but at the same time the hotel wants to continue to
operate, thus this new policy is handful as it allows to create or promote new
price to attract customers during this pandemic.
Technology
This factor refers to technological advances that can influence the industry's
operations, and most people knows how rapidly the technological environment
shifts and how this affects the way we market our goods and services. According
to Arthur Lau (2020), in terms of service quality in a hotel, they are implying AI
technology and robots to improve the service quality. In this new norm, a
standard procedure has been implemented which is in every business operating
sector, they should have thermometers to check every people’s temperature
that comes in inside their store and also a book and pen to record their name,
phone number and temperature. In some places, they have come out with

scanning the QR code of the place which will directly bring you into their website
to key in information such as your name and temperature. He further states that
for hotel staffs, AI has proven to be increasingly advantageous. For starters, by
giving hotel guests access to their rooms/venues using facial recognition
software, the convenience and efficiency of the check-in and check-out
experience is enhanced. Facial recognition hardware companies have developed
a solution for non-contact measurement of body temperature plus facial
recognition due to the COVID-19 pandemic to fulfill the rapid need to monitor the
virus in time. Besides that, the usage of robots for F&B room services and
housekeeping deliveries has also been considered to be implemented. Robots
are used on the frontline to protect hotel guests and workers, also to prevent the
spread of COVID-19 by preparing F&B in room dining services, doubling as
waiters in hotel restaurants, delivering housekeeping products, dispensing
facemasks and hand sanitizers. The robots not only help safeguard guest health
and avoid the spread of the virus, but also increase the quality of service and
customer satisfaction (Lau, 2020).
Legal
From time to time, legal changes take place. The market climate is influenced by
all of these changes. For instance, if a regulatory body imposes a regulation for
industries, the legislation will affect industries and business in that economy.
Therefore, corporations should evaluate the legal changes in their respective
environments as well. During this pandemic, most of the businesses are affected,
including businesses in the tourism industry as most of the hotels and resorts are
forced to shut down. According to Nur Haziqah (2020), it is stated that National
Deputy President Dr Sri Ganesh Michiel of the Malaysia Budget Hotel Association
(MyBHA) said this is because of a confusion that the hotel industry is at high risk
as the perceptions and actions by the financial institutions are unfair towards the
tourism industry, which has already been affected by the COVID-19 pandemic
since the start. He further states that most of the hotels are on a leased land and
the owners of the property should give discount for the rental. However, some of
the owners rejects the idea of giving discounts towards the rental as they are
enjoying the moratorium period in their property loan facility. Due to this kind of
owners, most of the hotels continued to shut down for good, while legal cases
and bankruptcy proceedings will rise following employees’ retrenchment (MALEK,
2020).

Environmental
This factor includes all those relevant to the physical environment and to the
criteria of general environmental protection. Although the environment is more
important to some industries, such as tourism, agriculture or food processing, a
number of different industries may be impacted by these factors and are worth
being aware of (Sydney, 2021). With the National Tourism Policy 2020-2030
being implemented, it would help to strengthen competitiveness, promoting the
sustainable and equitable growth of the tourism industry and preparing for future
disasters (PMO, 2020). Prime Minister Tan Sri Muhyiddin stated that the policy
would be implemented through six key strategic thrust, namely the
transformation of governance, the development of an inclusive investment zone
for tourism and the intensification of digitalization in the tourism sector.
Furthermore, the main objectives include promoting the experience and
satisfaction of visitors, reinforcing the dedication to sustainable tourism and
increasing the potential of human resources in all sub-sectors of tourism. This
will allow Swiss-Garden Hotel Melaka to operate more efficiently by utilizing
enough manpower to attract more customers to revive the tourism industry.
3.2 Porter’s Five Forces Analysis
Porter's Five Forces is a model that recognizes and analyzes five competitive
forces that form each market, helping to define the vulnerabilities and strengths
of an industry. The study of Five Forces is often used to describe the structure of
a market to assess corporate strategy (Scott, 2020). Thus, in this assignment, we
will be using this to analyze Swiss-Garden Hotel Melaka.
Competitive Rivalry
Competitive rivalry is a measure of the size of competition between existing
companies. Intense competition can reduce profits and lead to competitive
movements, including price cuts, increased spending on ads, or spending on
improvements and innovation in service/products (Library, 2021). As for Swiss-
Garden Hotel Melaka, the competitor would be the nearest 5-star hotel around
which is The Majestic Hotel which locates nearby the Swiss-Garden in Jalan
Bunga Raya, Melaka. Between both of the hotel, Swiss-Garden Hotel Melaka has
the advantage as it has cheaper rates than Majestic Hotel at RM 120 per night
after discount compare to RM 520 per night after discount that Majestic Hotel is

offering. Besides that, Swiss-Garden has an adjoining mall next to it which is
more convenient for the customers to go and shop compare to Majestic Hotel.
With a cheaper price and great environment, Swiss-Garden Hotel Melaka is the
perfect choice for any consumer that is looking for a hotel to stay.
Supplier Power
Suppliers have the power to affect both price and resource/input availability.
When businesses are dependent on them, suppliers are most powerful and
cannot substitute suppliers because of high costs or lack of alternative sources
(Library, 2021). If the number of suppliers is limited, then the companies will
definitely fight each other in order to have the supplier for themselves. In this
case, even though Swiss-Garden Hotel Melaka is more to services than product,
it is still important for them to have supplier as they need other necessities such
as paper, pen, towels, etc. for them to operate efficiently. Thus, if Swiss-Garden
does not have a consistent supplier, and they ran out of towels to give towards
their customers, it will definitely bring bad reputation towards their name so it is
important to secure a supplier that is loyal toward us.
Threat of New Entrant
Companies rely on entry barriers such as customer loyalty, product
differentiation, market share and cost advantage to protect themselves against
the challenge of new entrants (Library, 2021). Swiss-Garden Hotel Melaka will be
affected by the threat of new entrant if its barrier is weak to be penetrate. In this
situation, it is when a new 5-star hotel is built nearby Swiss-Garden Hotel Melaka
that also comes with better rate price than Swiss-Garden itself. However, Swiss-
Garden Hotel Melaka has a great reputation among the customers that they
should not be worrying about other new entrant as long as they sustain their
image for a long time, and it is also strategically located at a location which is
convenient for customers to walk around the street, thus the possibility of
customers to choose Swiss-Garden Hotel Melaka over any hotel around when
they come for vacation in Melaka is quite high. However, Swiss-Garden Hotel
Melaka should always be aware of their surrounding as it can be used to their
advantage in improving the hotel.
Threat of Substitution
Companies are worried about the potential of their own substitution of
alternative goods (or services). The danger of substitutes is high when more

desirable and/or lower cost goods are sold by competitors or even businesses
outside the industry. Buyers then have the ability to trade-off on
price/performance. The switching cost is also a factor; if it is high, the
substitution cost is low (Library, 2021). In this situation, other hotels that is
located nearby Swiss-Garden Hotel Melaka are considered threat of substitution
as customers can go to other hotels should they are not satisfied with Swiss-
Garden Hotel Melaka. But as for now, in this pandemic, the risk of to be
substituted is quite low as most of the hotels are shut down or out of business.
Thus, this reduce the risk of Swiss-Garden Hotel Melaka to be substituted. At this
time, it is a great opportunity for Swiss-Garden Hotel Melaka to take the imitative
to improve their service to avoid from being closed down or be in the
substitution list.
Buyer Power
Buyers have the authority to impact the price and quantity of goods sold. Strong
buyers can negotiate or simply find alternative goods for volume or switching
costs. The buyer/seller relationship is often influenced by price sensitivity
(Library, 2021). In this context, it refers to how Swiss-Garden Hotel Melaka offer
their price towards the customers. Since every hotel industry depends heavily on
buyer power, it depends whether the hotel’s pricing range meets the customer’s
target. If it is not, then the customer can always look for other reasonable hotel
that meet their expectation. Thus, it is important for hotel to implement their
pricing range based on the surrounding environment as well, because most
people have allocated a specific amount of money for the hotel they choose and
specific amount of money for other usage. In this pandemic, hotels should
readjust their room rate pricing that is affordable in this period. If hotels still
follow their normal room rate pricing like before the pandemic, it is not a shock
that most of the hotels will be shut down or out of business. Swiss-Garden Hotel
Melaka must meet their customer expectation in order for them to gain more
popularity and also to be the best choice for any other customer that is looking
for a hotel to stay in Melaka.