Overview of International Marriott Hotel Group - Case Study Example

Critical analysis of Marriott International, Inc Contents Contents 2 Introduction 3 Overview of International Marriott Hotel Group 3 Marriott Grand Hotel in Moscow 3 Tourism in Moscow 4 Strategic position of the hotel 4 Product Portfolio 4 Market share analysis 5 PESTEL analysis 6 SWOT analysis 7 Sustainable Strategy 9 Types of impacts 9 Marriott sustainability report 11 Conclusion/Recommendations 12 References 12 Introduction This assignment would encompass a critical analysis on Marriott Hotel Group. The study shall highlight various impacts of this international hotel on destination (s). An appropriate evaluation would be conducted to enhance positive impacts of such hotel operations and mitigate all possible negative impacts. Overview of International Marriott Hotel Group International Marriott Hotel Group comprises of approximately 3,900 properties. There are 18 brands managed by the group across the globe. In global context, Marriott International is one of the leading hotels. It is a diversified hospitality company based in America, and was founded by J. Willard Marriott in 1927. 18 different brands of this group can be categorized as signature brand, luxury, destination entertainment, lifestyle/collections, select-service lodging, timeshare, conference centres and extended-stay lodging. The international company possesses a clear vision of keeping customer first, maintaining integrity, believing in excellence and incorporating changes as and when required. Marriott Grand Hotel in Moscow Moscow Marriott Grand Hotel is located in Tverskaya Street, which is an ideal place for tourists and business travellers. The nearby historical places to visit are Bolshoi Theatre and Red Square. This hotel is known for its exceptional event facilities and impeccable services. Spacious rooms along with superior quality amenities enhance level of customer satisfaction. The best international cuisine is served by its Grand Alexander restaurant, and Sunday brunches are famous in Samobranka restaurant. Tourism in Moscow Moscow is considered to be one of the exciting and incredible cities of Russia. It has a colourful past which highlights unique architecture and culture of the city. Moscow is a global centre for business, politics and economics. It is a desirable destination for majority percentage of tourists. The population size of the city is about 13 million (Moscow Tourism, 2011). All the tourism sites of Moscow can be located along banks of Moskva River. Strategic position of the hotel Product Portfolio BCG matrix is generally employed in order to analyze a particular product portfolio. It determines the degree of market growth and market share. Marriott Grand Hotel of Moscow is considered to be one of the leading hotels in Russia. The high quality and superior facilities determine the market position of the hotel. Target market of Marriott Grand Hotel is business travellers, weddings, conventions and leisure travellers. Demographic and geographic segmentation techniques are utilized by this international hotel chain so as to offer facilities to target market (Wood and Brotherton, 2008). On the basis of market share and market growth, BCG matrix portrays four important segments such as dogs, cash cows, stars and question marks. The BCG matrix for Marriott Grand Hotel Moscow has been well represented in figure 1. Figure 1: BCG Matrix The lodging or hotel industry is basically stagnated at the domestic level but is growing rapidly in global context. As per figure 1, this hotel is located between question mark and star. This indicates high level of resources is consumed by the organization so as to sustain moderate market share in the industry. The hotel group is also adopting innovative strategies to maintain a balance between low and high market growth (Okumus, Altinay and Chathoth, 2010). There is always a struggle between global versus domestic market share. Market share analysis There is wide range of luxury hotels present in Moscow. Marriott Grand faces a tough competition from other players in this region. The major luxury hotels in Moscow are Ararat Park Hyatt Hotel, Lotte Hotel, Mamaison Suite Hotel, Metropol Hotel, Ritz Carlton Hotel, Hilton Moscow, Savoy Hotel, Radisson Royal Hotel and Renaissance Moscow. All of these hotels offer best of facilities and has a wide base of satisfied customers. It can be stated that luxury hotel segment witnesses stagnated market growth (Lockyer, 2013). Domestic market has a low market growth compared to international markets. This in turn reduces profit margins of a company. Marriott Grand hotel operates in a region where there is large number of players offering similar products or services. The biggest competitors for this hotel are Radisson Royal, Ritz Carlton and Park Hyatt. In overall context, these three competitors occupy maximum market share. Marriott Grand Hotel constitutes 16% of the total market (Marriott International, Inc, 2015). This low market share could be justified by its position in the BCG matrix. The international hotel chain is striving to balance its market share in the hospitality industry. Customer preferences continuously change and this has a direct impact on the market share of an organization. PESTEL analysis PESTEL analysis is utilized for identifying external forces that directly or indirectly affect business operations. Political factor represents the role of government in business performance. The decreased level of government spending tends to limit operations of such luxury hotels. Moscow as a place plays a critical role in functioning of this international hotel chain. Visa restrictions due to multiple reasons decrease the percentage of tourist visits. Hotel sector is also adversely affected by political wars or conflicts. This is because tourists find it risky to travel to such places and hotels have to provide cheaper room rates in order to attract guests. Changes in political authoritative position might impact employment opportunities. This factor is then well addressed by hotel sector through providing more jobs. Economic conditions are centred towards recession that greatly affects hotel industry. Recession limits disposable income of individuals and thus fewer tourists would be interested to spend on luxury hotels (Osterman, 2007). Increasing exchange rates in Russia might limit tourist visits. Social factors represent a key component within hotel industry. Cultural background and demographic characteristics of customers are closely knitted with the operations of hotel sector. Increasing aging population and destination attraction is likely to increase revenue margins of Marriott Grand Hotel Moscow. Environmental standards are strict for the hotel industry. This is because it accounts for environmental degradation in the form of air pollution and inappropriate waste management. Daily operations of such luxury hotels result into large volume of wastage which if not treated well might lead to land pollution. Carbon emissions because of transportation of goods are a major source of air pollution. Technological advancements have increased customer demand in the market place. Online hotel booking and availability of information on the Internet is the primary concern of customers (Scranton and Davidson, 2007). Every hotel needs to incorporate all these facilities and this eventually leads to less of manpower in the system. Legal factors mainly revolve around tourist verifications and regulatory frameworks of a particular tourist destination. These factors either enhance flow of tourist visits or restricts tourist from travelling to a specific destination. SWOT analysis SWOT analysis is a strategic framework that helps to determine internal strengths and weaknesses, and external opportunities and threats. It basically portrays the current position of an organization. SWOT analysis shall be conducted on the basis of findings obtained from BCG matrix, market share analysis and PESTEL analysis. Strengths Weaknesses High brand value Financial strength helps in sustaining business operations Marriott Grand Hotel is a trendsetter in the area of eco-tourism Superior quality restaurant services Situated in a prime location in Moscow, Russia (Burns and Novelli, 2008) Global brand presence Narrow target market More of domestic focus Deficit of value addition in the brand image Opportunities Threats Extension of target market segment Personalized experiences of customers Incorporating more of technological innovations Intense competition in the hotel industry of Moscow Emergence of trade union issues There is great deal of vulnerability within timeshare business Sustainable Strategy Types of impacts The hotel industry as well as tourism sector creates certain impact on the external environment. These impacts can be addressed in terms of social, environmental and economic factors. Marriott Grand Hotel Moscow along with Moscow tourism have resulted into these impacts as outlined in the below given table. Economic Impacts Employment opportunities are provided by the hotel sector Tourism and hotel sector enhances economic development of a region Flow of funds in Moscow is triggered through hotel sector and tourism industry (Hudman and Jackson, 2003). Local people could start off with new businesses due to effective contribution from tourism sector of Moscow Unskilled workers are employed by the hotel group who are gradually trained to attain set objectives Economic development is in terms of high GDP growth, per capita household income, etc. Funds availability is largely due to amount of spending by tourists in a specific destination Local business development has been because of increased tourist visits. These businesses are related to selling mementos, local handicrafts, etc. Social Impacts Cultural aspect is pressurized by tourism sector Loss of traditional values due to entry of foreign players in the hotel industry Social enhancement through enriched cross-cultural activities Transformation of a region into tourism destination leads to exploitation of cultural values. Tourism sector puts undue pressure on culture so as to meet tourist requirements Hotel sector has disrupted the traditional value system of Moscow since it needs to survive in intense competition Tourism sector and the luxury hotel group attracts wide array of individuals, and it leads to cross-cultural conversation amongst foreign and local people Environmental Impacts Environmental degradation has resulted due to intensified operations of Marriott Grand Hotel Moscow Increased level of air pollution in the region Improper waste management Less of eco-friendly measures adopted by the hotel group and is negatively affecting the environment Hotel industry contributes to air pollution through goods transportation or imports, yielding carbon dioxide emissions. Air transport is a major aspect of Moscow’s tourism and it enhances air pollution level Litter or waste in all tourist spots is another impact of tourism sector. Marriott sustainability report Marriott Grand Hotel believes in maintaining well-being of economy and society. The company donates money and time in order to create positive impact on external community. $4.3 million was raised by the company to serve the society from its wide array of sponsored events. Marriot Hotel Group serves the world through creating employment opportunities, aiding impoverished and sick children, empowering diversity, providing food and shelter at times of disaster, and aiming towards sustainable eco-friendly measures. This hotel chain is currently inclined towards decreasing operational costs along with reduced water, waste and energy consumption. Green hotels are built by the company to be aligned with environmental standards (Marriott International, Inc, 2013). As per Climate Counts which rank companies on their sustainability and climate strategies, Marriott Hotel has secured the highest rank. Strengths of the actions The major strength of these actions is that it enhances corporate reputation. These actions not only ensure positive impact on society but also are associated with business sustainability for long term. Other strengths are it creates positive impression in front of stakeholders. Competitive rivalry can be addressed appropriately only when such strategies are implemented by an organization. Weaknesses of the actions Weakness mainly revolves around cost factor involved in all these strategic actions. Funds have to be raised so as to support such actions. On the other hand, these actions are at times perceived to be a strategy to upgrade brand image rather than serving community. Conclusion/Recommendations As per this research study, Marriott Grand Hotel has been able to set high standards in the hotel sector of Moscow. There are strong players in this particular industry like Radisson, Park Hyatt, etc. All of these luxury hotels are actively indulged into offering superior quality customer service. It becomes difficult for companies to survive in such intensely competitive industry. Tourism sector of Moscow along with Marriott Hotels has facilitated development of this tourist destination. There are millions of people who visit this destination annually and it has eventually improved upon economic scenario of the region. However it is recommended that the hotel group should adopt eco-friendly measures to reduce degree of water or energy consumption. Environmental hazards can be decreased by developing green buildings and reducing percentage of goods import in a certain time period. Celebrity endorsement is recommended to be exhibited as it shall attract large base of tourists and help to promote the approach of green environment. The hotel group should recruit more of local people by imparting in them necessary skills or knowledge. References Burns, P.M. and Novelli, M., 2008. Tourism and mobilities: local-global connections. UK: CABI. Hudman, L. E. and Jackson, R. H., 2003. Geography of travel and tourism. New York: Cengage Learning. Lockyer, T. L.G., 2013. Global cases on hospitality industry. New York: Routledge. Marriott International, Inc., 2013. 2013 Sustainability report update. [Online] Available at: [Accessed 30th May 2015]. Marriott International, Inc., 2015. Moscow Marriott Grand Hotel. [Online] Available at: [Accessed 30th May 2015]. Moscow Tourism., 2011. About Moscow Russia tourism. [Online] Available at: [Accessed 30th May 2015]. Okumus, F., Altinay, L. and Chathoth, P., 2010. Strategic management in the international hospitality and tourism industry. New York: Routledge. Osterman, J., 2007. Excellence in brand advertising. New York: Visual Reference Publications. Scranton, P. and Davidson, J. F., 2007. The business of tourism: place, faith, and history. USA: University of Pennsylvania Press. Wood, R. C. and Brotherton, B., 2008. The SAGE handbook of hospitality management. London: SAGE. Read More