SLS Hotel Beverly Hill Los Angeles - Assignment Example

SLS Hotel Beverly Hill Los Angeles al Affiliation SLS Hotel Beverly Hill Los Angeles The success of any business depends directly on the internal and external environment of the business. The external environment entails those factors that are outside the business and which the management has little or no control over (Varadarajan, 2010). These factors include the economic environment, social, political and cultural factors as well as the technology. A deeper insight of the external environment of SLS Hotel in Beverly Hills Los Angeles; focusing on the hotel environment and the factors that determine its success in the area, is hereby provided. Social Factors The SLS Luxury brand caters to a specific class of people who desire a lifestyle of high-class service, sophistication, “over the top” luxury, and an atmosphere that fulfills these needs. SLS Hotels have created a new paradigm in the luxury hotel experience that speaks to a global, sophisticated audience. “SLS” stands for “style, luxury, and service. This speaks to the needs of today’s sophisticated travelers, offering an array of widely customizable features and an unwavering commitment to innovation and superior guest service (Hotels, 2014). The sort of products and administrations requested by customers is generally impacted by their convictions and state of mind which, on the other hand, are affected by social molding. The surrounding social entities and the associated activities. The Hollywood presence, for instance, presents the hotel with great opportunity for the constant flow of clients who even stay for longer periods. The hotel location is a great contributor to the accessibility by the target population who include the diplomatic tourists and business persons in Los Angeles. Beverly Hills and Los Angeles, in particular, is a popular destination for people seeking luxury and high-class lifestyle. The Hollywood movie industry, high-end shopping options and opportunities, beaches and resorts such as Santa Monica Pier and Venice boardwalk, attractions such as the Universal Studios, many museums and cultural events in L.A constitutes to the main social factors that make the destination popular (Enz, 2009). Being an economic hub, Los Angeles provides the hotel with an adequate supply of market as business people from all over the world frequently come to the city for conferences (Hotels, 2014). The growing population of Beverly Hills is also a social factor to consider. Currently, the population of the city stands at over 34,000 people. However, the population has various demands depending on the age-group and socioeconomic factors. The city’s demographic data shows that a large group of the residents are below the age of 44 years (Table 1). Table 1. Demographic Data: Beverly Hill Los Angeles Age:    0-19 years  22.8% 20-44 years 31.7% 45-64 years 26.8% 65+ years  18.7% Median Age 41.5 This gives the hotel a great opportunity to take advantage of the population which would be attracted to movie-making, film industry and official events that take into account great travel experience. However, due to the increasing population and the demographic change, security has become a real challenge to business. Often, hotel businesses have been termed as harbors for criminals who tend to book rooms and undertake criminal activities from these areas. It has therefore become a necessity for hotels to have comprehensive security checks and monitoring. Hotels and other businesses are currently required to install technologies and employ personnel to man security checks throughout. Although the crime level in Los Angeles have reportedly been on the decrease since 2011, there are still incidences that require special focus if a hotel is to assure its tourist customers of their security (LA INC, 2014). Economic Factors The main idea behind the establishment of the hotel is to make the profit. This implies that the business main concerns are the economic factors and how to create revenue from the situations (Enz, 2009). The population of Beverly Hills compared to the rest of California and America seems more affluent and hence ready to take bookings from prestigious hotels. The table below shows the comparative statistics. Table 2. Comparative Statistics Beverly Hills California United States Population 34,848 38,407,580 316,352,297 Median Household Income $136,210 $61,801 $52,961 Average Household Net Worth $1,009,103 $683,938 $495,853 Long-term Residents (5+ years) 41% 36% 35% Annual Turnover 15% 19% 18% Median Age 47 years 35 years 37 years These statistics indicate that the residents of Beverly Hills have a comparably higher income than their counterparts in California. The mean income for the young adults in this area (20-44 years) who are the main focus is $148,000 which implies that there is averagely constant customer base for the hospitality industry. Various hotels that have been there before have continuously enjoyed favoritism when it comes to the weddings. Beverly Hills Plaza Hotel & Spa, for instance, has a flexible indoor and outdoor space ideal for intimate and social ceremonies. The unique menus and handcrafted cocktails provide a custom wedding that many couples would die for. This is confirmed by the number of weddings in this hotel which range from 12-20 in a month. However, the average wedding cost at SLS Hotel Beverly Hills is estimated at between $26,101 and $44,222 for a ceremony & reception for 100 guests. This is cheaper compared to that at Beverly Hills Plaza Hotel & Spa whose average charge for similar events and services is over $50,000. This is especially so in the festive months when the hotel can even have more than three weddings bookings. Political Factors Policies being made and implemented by the government have an impact on the activities and the reputation of the hotel (Varadarajan, 2010). For instance, the green policies that dictate the kind of energy that industries use and the waste management policies have led to the hotel spending more money on the improvement of facilities and certification process. The Green Policy requires that all the building programs in Beverly Hill achieve environmental sustainability goals related to water conversation, increasing energy efficiency and promote health of the residents and workers. This means that the hotel must be certified by the health and environmental agencies. For these, the hotel is already certified but for the building certification, the hotel is still using the previous regulations existing before the Green Policy. Technological Factors and Hotel Trend The growth and development of technology have given the hotel industry new opportunities as well as challenges. The changes in technology demand clear changes in the way of doing things. The embracement of technology as an integral part of doing business significantly raises its position as a competitor in the industry. Besides the use of online bookings that serves the customers from all over the world, the hotel has utilized a mobile application that helps connect directly with the customers. The app allows guests to set wake-up calls, order meals, and room service and even request pick-ups from their rooms or elsewhere. This makes the customers be in personal contact with the hotel and the staff (slshotels.com). The SLS Beverly Hills models after its sister hotels in South Beach and Las Vegas, to bring the feeling of “celebrity style” high class and night-life to the Los Angeles area. The evolution of the SLS Hotel at Beverly Hills began 15 years ago, in the fall of 1991, when it was originally erected as the Hotel Nikko at Beverly Hills. Marrying Japanese style and state-of-the-art technology with traditional American comfort, the hotel was designed to reflect traditional Japanese-style architecture with a contemporary, high-tech flair suitable to its urban setting. It was a combination of traditional American comfort, the latest technology, and Japanese style (Enz, 2009). It depicted traditional Japanese architecture, in combination with high technology. The objective was to make it eminently suitable for its urban location. After eight years of extreme success, this hotel was renovated, and the Le Méridien hoteliers assumed its management. The trend of SLS Hotel business requires a bit more of the focus. This is because as the business develops, the external environment becomes tougher. More hotels are being established in the area and the competition is becoming worse. This implies that the management has to focus on strategies that will be directed towards making the hotel a favorite destinations to many (Hotels, 2014). The future strategies could, therefore, involve more inclusion of the community in promotions and parties with local artists and music bands, having space for events and meetings for the community and also holding parties for common local awards. Embracing further the provisions of technology also has a chance to inflate the reservations and bookings thus putting the hotel at a favorable economic position for competition. In addition, unfavorable political influences, the hotel needs to consider a level of involvement in the local politics and securing political allies during elections (Jovanovic, 2012). This will probably put the business at the positive position of the policies and the law and increase its access and influence in policy making. Conclusion The external environment of the hotel appears to harbor great opportunities. The management of the hotel should be keen to identify what the society and the political, technological socioeconomic and legal environments require and hence align their products and services to serve these needs and hence maintain a competitive position in the market. References Enz, C. A. (2009). Hospitality Strategic Management: Concepts and Cases. Hoboken, New Jersey, USA: John Wiley and Sons. Hotels. (2014, March). Retail Reimagined. Retrieved March 14, 2015, from http://library.hotelsmag.com/publication/?i=199523&p=10 Jovanovic, B. (2012). The Diversification of Production. LA INC. (2014, March). The Los Angeles Convention and Visitors Bureau; LAs First dineLA Restaurant Week a Boon for Southland Restaurants." William H. Hannon Library Proxy Server Authentication. SLS Hotel. http://slshotels.com/beverlyhills/ Varadarajan, R. (2010). Strategic marketing and marketing strategy: Domain, definition, fundamental issues and foundational premises. Journal of the Academy of Marketing Science, 38, 119–140. doi:10.1007/s11747-009-0176-7​ Read More