IBM7006: Travelodge Hotels Case Study on Environmental Changes

This case study examines Travelodge Hotels Limited, a major UK hotel chain, analyzing the impact of environmental changes on the hospitality industry and the company's stakeholders. The study explores how climate change, resource depletion, and biodiversity loss affect the industry. It details restructuring and re-integration initiatives, such as energy-saving technologies, recycling, composting, and sustainable purchasing practices. The analysis employs strategic formulation tools like EFE, IFE, and CPM matrices to assess the impact of global environmental changes on Travelodge's market position, resources, and strategic capabilities, particularly in marketing. The case study also discusses the strategic directions adopted by the firm, restructuring its business model, diversification and investment strategies, and concludes with an overview of the firm's adaptation strategies to environmental factors.

Case study

TABLE OF CONTENTS
INTRODUCTION......................................................................................................................3
MAIN BODY.............................................................................................................................3
Specific environmental changes and how these changes have affected the stakeholders......3
Restructuring and re-integration taking place at the industry level.......................................4
Effect of global environmental changes on the market positioning, resources and strategic
capabilities of the organization..............................................................................................6
CONCLUSION........................................................................................................................13
REFERENCES.........................................................................................................................14

INTRODUCTION
The environmental changes have a huge impact over the business organization. These
changes influence the different aspects of the business. In this report, Travelodge Hotels
limited is taken an organization in the hospitality industry. It is UK’s biggest hotel chain and
brand with over 570 hotels all across the United Kingdom. This report provides an analysis of
how environmental changes will affect the stakeholders and also deals with the current
restructuring and re-integration activities taking place at the industry level. Along with that,
how global environment is affecting the market position of the company and its resources and
strategic capabilities.
MAIN BODY
Specific environmental changes and how these changes have affected the stakeholders
There are two industries which are closely connected to the environmental changes
which are hospitality and the tourism industry (Darvishmotevali, Altinay and Köseoglu,
2020). The two main reasons for determining the viability and attractiveness of the hotel is its
surrounding and the natural environment and the climate conditions over there. The main
environmental trends which are affecting the hospitality industry are stated below.
Change in climate
The increasing emission of greenhouse gases in the atmosphere has been the cause of
climate change and global warming. Climate change can eb referred to as global occurrence
and the main influence or effect of it can be seen at the local scale. It includes rise in sea
level, variation in the ocean currents, melting of glaciers, changes in the precipitation patterns
and so forth. These factors determine the destination place of tourist’s interest which has a
direct effect over the hotel industry and also on the profitability of the company or the
industry as a whole. Policies have been implemented to lower the emission of harmful gases
which will invariably affect the operating cost and attractiveness and competitiveness of the
destination for longer destinations.
Depletion of natural resource
The rise in the paucity of the natural resources which are required to meet the needs of
the industries will lead to increase in the number of effects. The main factors which has
affected the availability of the natural resources are food production, water and energy, rising

population level and economic development. The outcome of the peak oil leads to increase in
the expenses of the fossil fuels which is based on the energy sources. The decrease in the oil
production with the increase in demand of it will lead to the rise in the fuel costs. Therefore,
the carbon economy is set to push the need for the energy efficiency level and the investment
in the renewable sources of energy. In the near future, half of the global population would be
facing shortage of resources due to scarcity (Cerchione and Bansal, 2020). This will also have
an impact over the hospitality industry as well. This will lead to insufficient supply of
resources to the guests or increasing the cost of the service which will have a direct impact
over the footfalls and consequently, affecting the profitability of the business of the industry.
This will affect the stakeholders as well because investors have invested money in the
company for the purpose of gaining higher return and if their desire is not match then it will
affect the funding of the company. Other stakeholders like employees, government,
customers will look for alternatives as business is not able to manage itself with respect to the
changing conditions and also government might also intervene in knowing all the regulatory
requirements are being met or not under Corporate Social Responsibilities activities.
Loss of bio diversity
As per the repot of United Nations, the main danger is over the loss of species
biodiversity is the loss of habitant. This loss is expected to have a substantial effect over
those destinations which are known and highlighted by the nature based surrounding and
environment or the eco tourism. It will affect all those companies within the industry which is
known for the habitation of wide variety of species or rare species. Thus, the changing
environmental factor will hamper the popularity of these places which will directly affect the
revenue of the business along with its profit and indirectly the interest level of the
stakeholders.
Restructuring and re-integration taking place at the industry level
There are large number of hotels and the hospitality industries in UK along with the
top-notch hotel chains and all these together requires huge source of resource consumption
and waste. Therefore, an initiative by one hotel will not have any changes in this grand
industry. There are steps which are being taken by the hospitality industry as a restructuring
and ire-integration initiatives in its business operating process for meeting with the changing
environmental factors so that it won’t affect their business on a large scale.
Installing Energy Saving Technologies

It has been observed that nearly 75% of the hotel’s environment impact is mainly
because of the excessive consumption of the energy (Martínez-Martínez and et.al, 2019).
Therefore, many of the hotels have started installing the energy efficient technologies and
appliances like lighting and heating, cooling system etc. which creates a huge difference both
for the environment and the hotel as well.
Embrace Recycling
Another important impact, the hospitality industry has over the environment is
because of the increase in the amount of waste that hotel creates. This creates the need for
embracing recycling as an alternative to make things right. There are hotels which are
recycling their tablecloths into napkins, chef’s apron and necktie. Also, they are making use
of the retired sheet for creating laundry bags. There are few hotels which are recycling oil
instead of draining it causing sea pollution. They are recycling it every time they are being
used for the future purposes. Also, using CFC fee chemical for the purpose of cleaning
toilets, glasses and other things. Most of the big hotels are making use of solar power in their
entire hotel which results into saving a lot of electricity (Jones, Hillier and Comfort, 2016).
There are other practices which is being implemented is in respect to the water management.
The industry is utilizing the waste water by recycling it and using it in areas like gardening,
golf course etc.
Composting waste
The hotels are now realising the benefits of food waste compositing instead of
throwing it out. It is the well-known green initiative which will not only attract the guests but
also save money of the hotel as composed waste can be utilized as a organic fertiliser. Also,
the hotels can reduce the environmental impact by making smart purchases. The hotel can
make purchase the required products locally which will reduce the impact on the environment
and will also benefit the community.
Planting a garden
With the increasing demand for healthy and organic food supplies, there are hotels
which has a pool area reserved such for the gardening purpose (Mensah, 2019). It produces
organically grown vegetables for its hotel and also placing benches for the guest to have a
wonderful experience will be an added advantage and this can be seen as a point of attraction
for the customers.

The above stated point are the certain practices which the hospitality industry is
adopting and making it the part of its business operation. The companies have restructured
their entire process by reintegrating different ways of managing the things so that it will be
least affected by the environmental changes and will also help in operating the business in a
sustainable manner. All these will result into effective cost management which will
consequently lead to increase in profitability and stakeholders trust and loyalty.
Effect of global environmental changes on the market positioning, resources and strategic
capabilities of the organization
In order to effectively analyse the impact of global environmental changes over the
Travelodge hotels, the different tools which are contained in the strategic formulation
analytical framework are used. This framework is divided into three stages. A detailed
analysis is given below of each stage.
Stage 1: Input stage
This stage provides the basic information which are required for formulating the
strategies (Seijger and et.al, 2017). It consists of External Factor Evaluation (EFE) Matrix,
the Internal Factor Evaluation (IFE) Matrix, and the Competitive Profile Matrix (CPM).
External Factor Evaluation (EFE)
The External Factor Evaluation (EFE) Matrix of Travelodge Hotel
External Factor
Evaluation
Weight Rating Score (W x R)
Opportunities
1. The strategic
location
0.131 4 0.525
2. The segment of
medium price that
keeps
growing
0.121 3 0.362
3. The availability
and recruitment of
talented
workforce from the
0.115 3 0.345

society around
4. The number of
business
opportunities that
have not been
touched in respect to
meeting rooms,
seminar, conferences
and
wedding
0.126 3 0.377
5. Taking the
advantage of various
government policies
in hospitality
industry
0.126 3 0.377
Threats
1. The attractive
promotion practices
by the business
competitors
0.106 3 0.319
2. The building of
new hotels with low-
pricing strategy
0.098 2 0.196
3. The changing
consumers’ tastes
and preferences
0.095 2 0.189
4. The facilities and
services from the
competitors
0.094 1 0.094
Total 1 2.752
The total of EFE matrix is more than 50% which is 2.752. This means that the hotel
has implemented proper strategy in effectively using its external opportunities and has

succeeded in avoiding external threats. The most preferable opportunity for Travelodge Hotel
is its strategic location where it is scoring 0.525 and on the other hand, the most dominant
threat is its rapid promotion program with a score of 0.319.
Internal Factor Evaluation (IFE)
Internal Factor Evaluation (IFE) of Travelodge Hotel
Internal Strategy
Factors
Weight Rating Score (W x R)
Strength
1. Workforce
environment
0.120 4 0.481
2. Management and
social responsibility
0.118 4 0.470
3. Gross profit
margin
0.115 3 0.343
4. Net profit per
employee
0.107 3 0.321
5. Strategy
development
0.101 3 0.303
Weakness
1. Information,
information
technology (IT),
and
knowledge
0.086 2 0.171
2. Workforce
involvement
0.086 2 0.171
3. Market
relationship and
satisfaction
0.083 2 0.166
4. Senior leadership 0.078 2 0.156
5. Work system 0.070 1 0.069
6. Company’s 0.064 1 0.064

performance
measurement
and
analysis
7. Work processes 0.051 1 0.050
Total 1 2.771
The total of IFE matrix of Travelodge Hotel is 2.771 which is again more than 50%. It
indicates that the company is proper strategy put in place for its internal strengths and is also
succeed in anticipating its weaknesses (Lijie, 2019). The most effective strength is the
conducive work environment where the company is effective in developing a smooth
working environment among its employees and the management and the next is the social
responsibility towards the society which is satisfactory and the hotel cares about the society.
The work process has received a lowest score which is the main concern for the company.
Competitive Profile Matrix (CPM)
CPM (Competitive Profile Matrix)
Critical Success Factors Weight
easyHotel Premier Inn The Hoxton
Rank Score Rank Score Rank Score
1. Hotel Name Recognition 0.005 3 0.02 4 0.02 4 0.02
2. Service 0.15 2 0.3 3 0.45 3 0.45
3. The Occupancy Rate 0.15 3 0.45 4 0.6 3 0.45
4. Market Segmentation 0.08 3 0.24 3 0.24 3 0.24
5. Market Share 0.1 3 0.3 3 0.3 3 0.3
6. Experience in this business 0.18 3 0.54 4 0.72 4 0.72
7. Financial Strength 0.18 2 0.36 4 0.72 3 0.54
8. Location 0.1 3 0.3 4 0.4 3 0.3
9. Provision of Facilities 0.04 4 0.16 4 0.16 3 0.12
Total 1 2.67 3.61 3.14
It can be said from the above that Premier Inn is leading with score of 3.6 with main
advantage of experience in the hotel but the main weakness was in name recognition with
score of 0.02. In contrast to it, the low score is of easyHotel with just 2.67. Its main strength
is in provision of facilities and weakness is in location criteria.
Stage 2: Matching stage

This stage focusses on the developing or generating the feasible alternative strategies
by aligning the key internal and external factors (Pratiwi and et.al, 2017). It is the stage of
selection of alternative strategies.
Internal-External (IE) Matrix
Total weighted internal
factor score
Strong
(3.0-
4.0)
Averag
e (2.0-
2.99)
Weak
(1.0-
1.99)
4 3 2 1
Total
weighte
d
external
factor
score
High I II III
3
Medium IV V VI
2
Low VII VIII IX
1
The IFE and EFE matrix are used for mapping the company’s competitive strategy
that is the sum of the weighting score of IFE and EFE matrix which is 2.771 and 2.752. This
analysis places the Travelodge Hotel in quadrant V which indicates that the hotel is in the
average competitive position. This also means that the Travelodge Hotel is having
opportunities for growth and development.
The next step is using SWOT matrix where the opportunities and threats are
correlated with the strength and weakness of the organization which utilizes the inputs
derived from the IFE matrix and EFE matrix. The SWOT matrix helps in developing four
types of strategies which are SO strategy, WO strategy, ST strategy and WT strategy (Gürel
and Tat, 2017). Based on this, the key alternative strategies are - the Travelodge Hotel should
hold and maintain the what it has achieved which is then combined with the differentiation
strategy as per the uniqueness of the hotel. This strategy refers to the offer to the customers
from the organization in terms of value added services. Differentiation mainly refer to as
uniqueness. Based on the analysis, the differentiating point of eth hotel is having sizeable
rooms for meetings and seminars which can be supported by the strategic location. The

Travelodge Hotel offers better experience to its customers by promoting itself as the meeting
and convention destination.
The product development can also be accomplished by packaging and programming
which refers to as presenting the product in such a manner that it becomes very interesting
and appealing to the customers. There are different packages which are being offered by
Travelodge Hotel such as international and traditional weddings, family gatherings, business
meetings and other packages as well (Amrollahi and Rowlands, 2017). This type of strategy
will be considered intensive if the organization is able to attract the customers by offering its
products and services directly. The following activities can be considered:
 Building cooperation with the online hotel agents, travel agents or the catering
businesses.
 Entering into collaboration with the local government and the private organizations in
respect to using the meeting rooms and even ballroom by providing attractive
packages along with stay at the hotel.
 Seeking the cooperation with the event management organizations for arranging
events at various occasions.
Stage 3: Decision stage
It is the last stage which uses QSPM to objectively evaluate all the relevant
alternatives strategies which are identified in stage 2 (Borrero, Acosta and Medina, 2020).
Alternative strategies
Strategy 1 Strategy 2 Strategy 3
Weight
A
S TAS
A
S TAS
A
S TAS
Key external factors
Opportunity
1. The strategic location 0.131 4 0.524 3 0.393 3 0.051483
2. The segment of medium
price that keeps growing 0.121
3 0.363 3 0.363 2 0.242

3. The availability and
recruitment of talented
workforce from the
society around
0.115
2 0.23 3 0.345 4 0.46
4. The number of business
opportunities that have not
been touched in respect to
meeting rooms, seminar,
conferences and wedding
0.126
3 0.378 4 0.504 4 0.504
5. Taking the advantage of
various government
policies in hospitality
industry
0.126
1 0.126 4 0.504 4 0.504
total 1
Threats
1. The attractive
promotion practices by the
business competitors
0.106
1 0.106 1 0.106 2 0.212
2. The building of new
hotels with low-pricing
strategy
0.098
1 0.098 2 0.196 1 0.098
3. The changing
consumers’ tastes and
preferences
0.095
1 0.095 1 0.095 4 0.38
4. The facilities and
services from the
competitors
0.094
2 0.188 1 0.094 1 0.094
Total 1
Key Internal Factors
Strengths
1. Workforce environment 0.12 4 0.48 3 0.36 4 0.48

2. Management and social
responsibility 0.118 4 0.472 4 0.472 3 0.354
3. Gross profit margin 0.115 4 0.46 3 0.345 4 0.46
4. Net profit per employee 0.107 3 0.321 3 0.321 4 0.428
5. Strategy development 0.101 4 0.404 4 0.404 3 0.303
Total 1
Weaknesses
1. Information,
information technology
(IT) and knowledge
0.086
3 0.258 4 0.344 3 0.258
2. Workforce involvement 0.086 3 0.258 3 0.258 3 0.258
3. Market relationship and
satisfaction 0.083
2 0.166 3 0.249 4 0.332
4. Senior leadership 0.078 4 0.312 3 0.234 2 0.156
5. Work system 0.07 3 0.21 3 0.21 3 0.21
6. Company’s
performance measurement
and analysis
0.064
3 0.192 3 0.192 3 0.192
7. Work processes 0.051 4 0.204 2 0.102 4 0.204
Total 1 5.85 6.09 6.18
Based on QSPM matrix the hotel should implement strategy 3 with the total score of
attractiveness of 6.18.
CONCLUSION
Based on the above explanation, the current position of the hotel is at average level
and it must choose the proper strategy for achieving its objectives. As per the tools included
in the strategic formulation analytical framework hotel is in quadrant 4 It requires to

implement strategy to hold and improve it along with the differentiation and positioning
strategy for its unique product and services.

REFERENCES
Books and Journals
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practices in tourism and hospitality industry. Business Strategy and the
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