HYATT Global - Research Paper Example

 HYATT Global This assignment consists of a SWOT analysis of a leading group in the hospitality industry, HYATT Global Corporation. The internal factors, strengths and weaknesses, and then the external factors, opportunities and threats will be listed. Then a conclusion for each of the factors will be drawn on the facts provided. INTERNAL FACTORS Strengths 1. The company has a fifty year rich history in the hospitality industry with many recognized brands around the world. HYATT is a global hospitality company with its roots in numerous countries around the world (Hyatt, 2010). The HYATT group has many industry leading brands which are widely recognized around the world. As of the year ended 2009, the company’s worldwide portfolio consists of 424 branded properties globally (Hyatt, 2010). The mission of the hotel is to make difference in the lives of people the hotel accommodates ever day. For the fulfillment of this goal, the hotel is not only pursuing the goal of being the most preferred hotel by the consumers but also it has started many retention programs. These goals and best practices have allowed the hotel to have 60% of the customers as returning customers. 2. The results from a survey show that HYATT Global tops the list of hotels in terms of quietness, hotel fixtures, atmosphere, hotel policy and facilities (Min, p.311). The hotels surveyed were of similar characteristics with US$ 200 per night, the number of guest rooms, market segmentation and location. The survey revealed that HYATT’ service performance is ranked the top relative to its competitors. HYATT is also superior in handling complaints, promptness of check-in and check-out, quality of recreational activities and tour guide information. The hotel has topped in many categories when compared to other leading competitors such as Hilton, Ritz Carlton and Shilla. 3. Customer satisfaction scores for HYATT reach an all time high (NewMarket International, 2009). The global hotel group has achieved a record-breaking customer satisfaction index after a solution was implemented in order to improve the business operations. This improvement was involved in every aspect of meetings and servicing groups. A seamless integration has been created by this solution between Hyatt’s own systems with the catering system of Newarket International. Hyatt’s catering and operations managers used to spend their valuable time of scheduling the caterings and understandings of the customers instead of actually executing the events. The new system has now changed the way the information was received by the managers, decreasing their workload and letting them concentrated more on the customer satisfaction. Weaknesses 1. The bitter infighting between the family members of the owner is the biggest hotel weaknesses (Seetharaman, 2009). The family feud amongst the owners of Hyatt Global is an unusual blueprint for the global downturn in the hotel industry and the corporate governance. The family dispute is testing the appetite of the investors as the highest bid for the corporation IPO has been only US$ 931 million (Seetharaman, 2009). Investors are turned off by the history of family issues in Pritzker’s family which owns the Hyatt Global Corporation. The investors are looking for stable and profitable businesses to invest at this time of financial crunch and instability. Most of these investors have been scared of what they witnesses during the financial downturn as they could see their millions get wasted. The investors do not desire to witness this again amidst the IPO week which saw many corporations undergoing IPO in October 2009. 2. The prices are too high for a normal person to afford vacations and live in a HYATT hotel. There are no brands available for an ordinary person who has very little savings as most of the rooms are $200 and above. The hotel targets only the premium customers and does not take into consideration the small population of their target market. 3. The Hyatt Hotel Corporation has a very few corporations in the Asian region, which is the fastest growing region of the world. The hotel line Hyatt has failed to open up enough branches over the world because of which the customers are very limited. The Hyatt Corporation has failed to target the Asian markets which are the fastest growing markets in the world today. Conclusion The strengths seem to be more than the weaknesses as the hotel has been founded 50 years back and has excellent customer service. The customers have rated Hyatt as the top hotel amongst its competitors in 2002. The weaknesses only include the limited target market and its reputation of a premium hotel. EXTERNAL FACTORS Opportunities 1. Decline in the value of Great Britain Pound has pulled the international tourists to the UK (eTurboNews, 2009). The fall in the value of the pound has brought bonus tourists to the UK and the hotel industry has been to the advantage because of this. The hotels need less expenditure on advertising to attract more tourists to UK. Many hotels have seen this as an opportunity and increased their prices for rooms per night stays. The hotel that will have a competitive advantage over others in this time of tourism boom, that hotel will prosper and make quick pounds. Tourism in the Sweden has also increased by 7 percent as 3.1 million people stay overnight in hotels and cabins compared to the earlier year (eTurboNews, 2009). The foreign overnight stays have increased by 11 percent (eTurboNews, 2009). This opportunity looks to be long-term as this has been the situation since a long time now. 2. Improving world economic situation and prospects for 2010. The world economy is improving as many countries register a sharp positive growth in the last quarter of 2009. Gross Domestic Product (GDP) of many countries has shown an increase along with notable rise in the international trade and signs of better global industrial production (United Nations, 2010). 3. Economic Indicators have shown that the Asia Pacific region is recovering from the economic downturn and their economic growth are in positive numbers. The 21 member economies of the Asia Pacific have taken key initiatives for the betterment of their economy (APEC, 2010). These initiatives are also good for the hotel industry as more tourists are attracted towards these destinations. 4. Rise of Globalization in the world. The rise in the phenomenon of globalization in the world has led to foreign trade and rise in travelling all over the world. Almost all of the successful corporations of the world are going global with that their employees have to travel and stay in other countries as permanent workers and foreign expatriates (Jotia, 2008). This is truly an opportunity for Hyatt to partner with these corporations to increase their sales and profitability. Threats 1. Recession in the European Nations is still far from over as investments and sales remain weak. Consumers in the UK are reacquainting themselves with the concerns of hikes in taxations and increase in unemployment. Although a hike in sales was seen in the December of 2009, but this hike may only be temporary as concerns of job takeover the consumers in the Europe. According to the British Chambers of Commerce, the economy remains fragile though there are indications of improvements in key national indicators (Stewart, 2010). According to the BCC’s chief economist, the economy is struggling to enter into a recovery phase as the critical measures are still in the negative territory (Stewart, 2010). 2. According to the United Nations World Tourism Organization, the international tourist arrivals in the Europe have dropped by 10 percent in the first four months of 2009 (eTurboNews, 2009). Europe used to be the destination for half of the world’s total tourists before the financial crunch that struck the world. Europe also has more than half the HYATT hotels which will be hard struck as the level of tourism in the area falls down. This fall in tourism is not only because of the increase in prices and rise in unemployment around the world, but also due to the financial crunch that the people face. 3. The unemployment in the US remains at 9.7% in February 2010 as the economy does not improves in the New Year contrary to what was expected. The forecast value for the unemployment is anticipated to remain around 9.7%, it could only be decreased by a maximum of 0.2% till October 2010 (Financial Forecast Center, 2010). Employment rate is the reflection of the economic condition in the US because when the population is employed, the demand for products and services is high and the national production is also higher. This shows that the national income is expected to remain the same low as it is now which indicated that the demand of products and services will remain low. Especially the hotel industry will be the hardest hit as it is a luxury item and expenditure on holidays by the Americans is decreasing day by day. Conclusion The external environment for every business today is very gloomy as Europe is caught in a financial crisis and showing no signs of recovery. The US is also facing more than 9% unemployment rate which has reduced the savings of the residents of the US. The economic conditions in the Asia Pacific are attractive and it is the only place where a business can expand in today’s environment. Works Cited APEC. APEC Home. 2010. 24 March 2010 . eTurboNews. European tourism takes a beating in 2009. 6 August 2009. 24 March 2010 . Financial Forecast Center. U.S. Unemployment Rate Forecast. 2010. 24 March 2010 . Hyatt. ABOUT HYATT. 2010. 24 March 2010 . Jotia, Lathi. "Current Issue." 2008. Globalization. 24 March 2010 . Min, Hokey. "Dynamic Bechmarking of Hotel Srvice Quality." Journal of Services Marketing 16.4 (2002): 302-321. NewMarket International. "newmarket-hyatt." 2009. NewMarket Inc. 24 March 2010 . Seetharaman, Deepa. "Family feud, hotel weakness could hurt Hyatt." 30 October 2009. Reuters. 24 march 2010 . Stewart, Heather. December retail sales rise to hit four-year annual high. 12 January 2010. 24 March 2010 . United Nations. World Economic Situation and Prospects 2010 . 2010. 24 March 2010 . Read More