SWOT Analysis of JW Marriott Hotel - Case Study Example

Student Professor Unit Semester Date Table of contents 1. Introduction…………………………………………………………………….3 2. Business Plan for Year 4……………………………………………………….3 2.1. SWOT…………………………………………………………………………3 2.1.1. Current strengths and weaknesses of your hotel…………………………3 2.1.2. Current opportunities and threats in the market………………………...5 2.2. Objectives……………………………………………………………………..6 2.3. Strategies……………………………………………………………………...7 2.3.1. Corporate Market………………………………………………………….7 2.3.2. Leisure Market……………………………………………………………..7 2.3.3. Other market segments……………………………………………………7 2.3.4. Cost control………………………………………………………………...8 2.3.5. Service quality……………………………………………………………...8 2.3.6. Staffing……………………………………………………………………..9 3.0 Financial targets……………………………………………………………...9 References ……………………………………………………………………….12 Business plan report for JW Marriott Hotel 1 Introduction: This report is an exhaustive report on the overall business performance of JW Marriott for the last three years under new management. The team had drafted a highly effective plan which it hoped will position JW Marriott as one of the major players in the United States hotel industry. In the first section, the report will review the business plan of the company to analyze the strengths, weaknesses, opportunities and threats that face the business and what the management can do about them. In the second part the report will outline the objectives and strategies of the company in the future and how the company has been able to stay true to the previous ones. Finally the report will analyze the financial performance and the projections for the next fiscal period. After the refurbishment JW Marriott hotel has become a 4 star hotel catering to practically all age brackets in America from the age of 20 (HOTS, 2012e).. With its excellent, guest rooms and luxurious experience, JW Marriott has positioned itself as a worthy competitor to players in the industry with the sole competitive edge of quality and innovation to offer our customers the best service in the sector ranging from conferencing to fitness facilities. 2 Business plan for year four 2.1 (SWOT) 2.1.1 Current Strengths and weaknesses: Strengths- The hotel has refurbished facilities to level three which has cost a lot of time and money in excess of $5922020 by the close of the third year since the hotel was taken over by my team. This means that JW Marriott has 250 guest rooms. In addition to this it now has good looking bar and restaurant that will be able to attract clients and project a positive new image of the hotel for marketing purposes (HOTS, 2012d). The hotel has managed to reduce the level of staff turn over to 45%. This means that the management has been able to ensure job satisfaction amongst its staff members as a result the clients will remain satisfied. This is a competitive edge over the rest of the players in the industry which should be encouraged and to also have maximum attention devoted to it to ensure that staff turn over falls to as low as 10%. With the improved revenue collection by the hotel by the close of the third year, the net income had risen to an impressive $5260419 before tax (HOTS. 2012f). This means that the company is in a position to innovate and enhance the welfare of its clients as well as that of the employees by offering them rewarding training and better terms of payment. In addition to that the company will be able to roll out an effective marketing campaign to market its services and products. Weaknesses- The customers have occasionally expressed concern on the amount o f money they pay for so little. It is the policy of the company to serve quality food and deliver quality service. While this is desirable it is as well known that to offer this the cost will be high. The biggest test is to balance between the cost and customer satisfaction. If not taken well care of t6o control the prices, it might have an impression in clients that the hotel is expensive. Therefore this should be taken care of. Staff turn over is still high averaging at 45%, the high staff turn over is not good as regular clients develop special relationships with some staff members which works to boost sales for the hotel. This should be reversed as it is a trend set to affect sales volumes. The staff members are not entirely occupied meaning they get bored sometimes with some of them expressing dissatisfaction since they are used to working in much busier hotels. This should improve with improving client numbers. 2.1.2 Current opportunities and threats in the market Opportunities- The hotel is located on a coast less than 30 minutes drive from the nearest airport. This means that the hotel is strategically positioned to cater for visitor to the area as well as regular travelers through the airport. At the same time the coast is conducive for leisure clients who want to relax and unwind at the hotel. The hotel is positioning itself as a player in the health and fitness industry with the introduction of gym and spa facilities. The industry is thriving it was by the mid of the past decade to be having 145 of the population belonging to a fitness club. The demand is still outstripping supply proving that this is a viable alternative to boost revenue for the company and reduce reliance on the traditional sources like guest rooms, food and beverage and conferencing (HOTS, 2012b). The corporate clientele is on the increase. This coupled with the increasing number of weekend and leisure clients means that there is great potential out there in the industry and can only be tapped through rigorous marketing efforts to beat Mariner and Palace in the game. Threats- With the mariner and palace spending millions in their marketing efforts, it means that the company will have to continuously spend much money annually to wade of competition from the two major competitors. The two have continuously been increasing room capacity and conference facilities with all the three (park, mariner and palace) having a combined conference capacity of 350 seats (HOTS, 2012h). Increased operating costs in energy and water consumption pose a risk of reducing the net taxable profit of the company consequently reducing the company’s capability of effectively competing with the major competitors in providing excellent service and keeping its staff members satisfied. 2.2 Objectives Increase revenue from $3,682,293 to $4, 230,000. Increase food and beverage revenue to an average of 40% of the total revenue that will be $400, 000. Increase involvement in sustainable operation in terms of environmental sensitivity in aspects such as waste management and water conservation and energy saving. Ensure state of the art facilities through continuous refurbishment to satisfy our clients. Reduce staff turn over to 30% Marginal revenue increase from food and beverage from $497,798 to $520, 000 Reduce refurbishment cost gradually in order to channel the budget allocation to development of new revenue sources like gym and spa. 2.3 Strategies: 2.3.1 Corporate market- the company will embark on rigorous promotion to boost increase in corporate clients in aspects as conducive conference facilities, excellent rooms and room service and mainstream media advertising. Conferencing facilities are the main product of corporate marketing in the hotel industry (HOTS, 2012i). Refurbishment of facilities especially rooms for accommodation will give a competitive advantage especially when it comes to satisfying highly sensitive corporate clients. The average pries for corporate clients will be $120. Direct sales representatives will be the preferred choice of promotional strategy for corporate guests. 2.3.2 Leisure market- Leisure market is a potential considering the fact that a majority of the population in the area surrounding the hotel are employed. Leisure clients are mostly during the weekends and holiday seasons. During this period more staff can be hired on casual basis to cater for the increased number of clients. A budget of $4000 will be dedicated to promote weekend clients for leisure purposes. This will be done through the print and the mass media. Charging an average of $85 will be effective in maintaining operating expenses well taken care of at the same time not exploiting the customer. The average price for leisure guests will be at $90 although it depends on what prices the competitors such as palace are charging. The main strategy is to charge slightly lower than our competitors to win over the clients. Palace is charging $90 on a weekend luxury room (HOTS, 2012c). 2.3.3 Other market segments- This includes the food and beverage segment which contributes slightly above quarter of the total revenue. However the margin for this segment is small and cannot accommodate high promotional expenditure, as such the company will continue relying on word of mouth to market this segment, by serving same quality food at the same prices thus maintaining customer expectation and satisfaction. This form of promotion is the most effective in this segment (HOTS, 2012a). 2.3.4 Cost control- The main cost emanates from promotional activities and refurbishment costs. The company is intending to gradually lower its expenditure on refurbishment as much of what was intended to be renovated in the hotel has been renovated. This will cut down the expenditure on refurbishment after achievement of level 3 refurbishment. Promotional expenditure will only be huge in the short run to enhance brand visibility of the new JW Marriott. After this the company can be riding on goodwill of its customers as well as little promotional effort that can be increased during peak seasons. The company is implementing a plan to collect rain water for its gardens and planting bushes and flowers that don’t need so much water. This is expected to save at least 15% water loss. Solar water heating systems will save energy costs as well as thermal curtains for rooms; energy saving light bulbs will save much money for the company in total accumulation of around 30% in energy consumption this is very benefitial especially in the long run when the benefits are realized (Fahey, 2012). 2.3.5 Service quality- Service quality will be the main point of our competitive strategy. Our customers must receive the best service so that they will continuously choose us over the rest of the hotels. This will be achieved by having the customer regularly asked about the service quality in the hotel regarding room’s service, food and beverage service and other services such as gym and spa. Their comments and recommendations shall be acted upon to guarantee service quality. 2.3.6 Staffing- Over the past three years the major problem has been controlling staff turn over, initially it was too high but the turnover is falling currently ranging at 45% (HOTS, 2012g). The company is however intending to lower it to 25% through ensuring job satisfaction of our staff by regularly holding meetings to take care of issues expressed by staff. We shall also ensure adequate staff to cater for all of our clients to ensure that the staff is not over worked nor the customers are underserved. 3.0 Financial targets: Total hotel revenue and total hotel net income Rooms’ department revenue and total hotel net income for the three years: Return on owners’ equity: ADR and REVPAR: References Fahey. J. (2012). Electricity Prices Rise Despite Cheaper Costs For Utility Companies. Retrieved from http://www.huffingtonpost.com/2012/07/11/electric-prices-rise-despite-cheap-production _n_1665946. html HOTS. (2012a). Eating out; trends & indicators. Southport: Griffith University HOTS.(2012b). Health and fitness market analysis. Southport: Griffith University. HOTS.(2012c). HOTS background information. Southport: Griffith University. HOTS.(2012d). HOTS user guide. Southport: Griffith University. HOTS.(2012e). Local economic factors. Southport: Griffith University. HOTS. (2012f) . Local info update Year 3. Southport: Griffith University. HOTS. (2012g).Staff Numbers, Rates Of Pay and Training Costs. Southport: Griffith university HOTS.(2012h). Competitors information. Southport: Griffith University HOTS.(2012i). Conference feasibility market. Southport: Griffith University. Read More