Strategy Evaluation of the Shangri La Barr Al Jissah Resort & Spa - Case Study Example

Strategy evaluation: The Shangri La Barr Al Jissah Resort & Spa Name Professor Institution Course Date Strategy evaluation: The Shangri La Barr Al Jissah Resort & Spa Executive summary This aim of this report is to analyze Oman Travel and Tourism industry. Specifically, this report will analyze The Shangri La Barr Al Jissah Resort & Spa to provide a broader picture of the market size, industry growth, competitors and market segmentation. Within the sphere of the company, the report will discuss the internal competence, current strategies and evaluate whether or not the current strategy should change and why. In so doing, the report will help the company on how to align its resource and capabilities to match the ever-changing global market and the trends and development in tourism industry. Introduction An increase in the number of hospitality facilities in the 21st century has made global managers to rethink their strategies to sustain competition (AbuKhalifeh & Mat 2012, p.355). Majorly, competition takes place in the basis of product branding, pricing, differentiation and expansion. Despite the strategies, change in customers behavior and preference have impacted the number of times companies need execute these strategies. Family holidays have increased with most parents want to spend their time out with families after a busy week of work and house chores (Anderson 2010, p.7). Families want a place which is both safe and can promote child developments. Hence a place with bouncing castle, playground, general positive children has become attractive. In the recent past, Oman’s The Shangri La Barr Al Jissah Resort & Spa has become one of the recommended places for family holidays and leisure experience. Therefore, this report will analyze Oman Travel and Tourism industry while focusing on the Shangri La Barr Al Jissah Resort & Spa; its current strategy and assess whether the current approach could should change. Company background Shangri-La's Barr Al Jissah is a Resort and Spa which was first located in Muscat, Oman in 2005 (Shangri-La 2014). Tripadvisor (2014) claims that the family holiday hotel sits on a 124-acre of land and has a number of rooms named differently. Among them are 180-room referred to as Al Husn, 198-room known as Al Bandar, and 302-room also known as Al Waha. This impressive holiday lies on luxuriant landscaped land, in the middle of a dazzling combination of the rugged mountains and ocean within Muscat locality (Tripadvisor 2014). The management has unique brandings to provide outstanding experience and attract its customers. The hotel has spacious rooms which are embellished with the Omani traditional artworks and balconies which overlook the luminous bay of Al Jissah (Global Business Platform 2014). One of the greatest experiences in this holiday facility is that it is 3 in 1 where a customer enjoys the services of hotels, bars and restaurants (Shangri-La 2014). The resort normally and highly recommended for the families, providing a teen club, kids club and pool, and Omani Heritage Village hosting authentic Arabian camels and horses. Ideal for all families, Oman has implausible climate, luxury facilities and finest sandy beaches and other amenities (Arabian Travel Market 2014). The management have the place is secure for parents and kids. It has shallow water where children can swim and its safe from drowning. Technology also plays a very big impact in attracting customers and Shangri-La's Barr Al Jissah has given it a top priority. In all 262 rooms, there is proper air conditioning, radio and satellite wide TVs for customers (Shangri-La 2014). The rooms are also mounted with Wi-Fi for customer to access high-speed Internet hence more information about the hotel. The company has different packages and customers can stay for a very long time according to their needs. Industry analysis The Oman diversity keeps on driving the growth of Travel and Tourism industry. Arabian Travel Market (2014) contended that in the past, travel and tourism in Oman have not done well as expected due to dwindling economic condition. The setbacks were increased by the Arab spring which blowing across the Arab world in a bid to bring regime change (AbuKhalifeh & Mat 2012, p.140). However, Oman has started undergoing promising growth in terms of economy after such difficult time (see figure 1). In the real sense, the economy is tremendously growing in the Middle East and eastern Asia in countries including UAE, Oman, Qatar, China, Singapore and Saudi Arabia (Arabian Travel Market 2014). The growth has increased disposable income which is needed for luxury activities like family holidays. In the process, purchasing power has improved greatly in Oman. The rationale behind growing tourism and travel industry in Oman is the diversity of the country. Today, World Economic Forum estimates that travel and tourism industry of Oman is worth US$2.11 billion and projects growth of 5.4% by 2022 (Global Business Platform 2014). Arabian Travel Market (2014) claims that the industry contributes to the country GDP and in 2012, Oman GDP was estimated at 6.6%. The country borrows some culture like holidaying from the USD and British which they have had good relations. Part of the growth has been escalated by the Sultanate provision, including wide array of action composing of adventure, diving, sports, trekking, culture, kids’ festival and arts (Tripadvisor 2014). The improved purchasing power of population, especially among families has led to growth in family holiday market segment. Many players have since joined the market to compete against Shangri-La's Barr Al Jissah. Presently, regional and global stores and hotel having been targeting Oman market because of economic improvement and in a bid to increase their global profits. Some of the competitors who pose stiff competition in the market includes Azaiba Hotel, Crown Plaza Hotel, Al Jabal al Akhdar Hotel, Baleed Anantara Resort & Spa, City Hotel, Jumeirah Group and Duqm Hotel among others (Global Business Platform 2014). Domestically, the travel and tourism sector is not concentrated and only three companies compete for the top including Shangri La's Barr Al Jissah Resort & Spa, Azaiba Hotel and Crown Plaza Hotel (Global Business Platform 2014). As a whole these three companies makes Australian rated as have the highest market share. This confirms that the dominance of Shangri La's Barr Al Jissah Resort & Spa and its brands could be a barrier for new entrants to do well. Despite fierce competition both locally and internationally, Shangri La's Barr Al Jissah Resort & Spa can use its strength to survive and perform better in the local market. The companies have to diversify because most of the five-star family holiday hotels offer extreme of wellness and comfort. Experts project that the industry is expected to grow, with 3, 4, 5-star hotels increasing up to 5,000-6,000 by 2015 (Global Business Platform 2014). According to Arabian Travel Market (2014), the travel percentage distribution in the industry is also expected to go up from 7.2 in 2013 to 10% by 2019. The same organization claims that tourist arrivals will increase by 39.2% in Oman hence doubling total spending to approximately US$2.98 billion by 2017 (Arabian Travel Market 2014). Five forces model can be used to better analyze the industry and the company. Lacle (2013) claims that the Suppliers’ bargaining power in Oman Travel and tourism industry is very low because few companies and many suppliers. It is therefore easy a company at the top to influence the market. This makes most Family holiday companies to be unable to influence the market. Shangri La's Barr Al Jissah Resort & Spa as the leading family holiday hotel, it is likely to attract more customers and influence the market. As such, it will now have a competitive edge and influence over the market suppliers. Power & Barrows (2006) claim that the existence of close substitutes like the fast food companies and general hotel and restaurants increases the predisposition of the customer to change in response to the economy and price increase. As times change, people might just go for these substitutes, therefore proper brand awareness in international market will be needed (Kotler, P & Keller 2011). Although there is an increasing fierce competition between the existing companies, with several labels and brands entering various Oman tourism and travel markets, buyers' bargaining power is becoming high (Rutherford 2007). This is because they have varieties to choose from. However, Oman tourism and travel will only stay in the competition because of market segmentation and changing of prices to suit its target market in deregulated. This may not work in regulated markets. Figure 1: Oman Ministry of tourism Internal analysis Shangri-La’s Barr Al Jissah Resort and Spa is fully committed to serve its customers and adopted a sequence of measures and strategies to ensure that the clients get the best service in the market. For that reason, Shangri-La's Barr Al Jissah Resort & Spa was ranked in early 2014 as the best resort in the service and ambiance categories by Oman Today Best Restaurant Awards (Shangri-La 2014). The resort has aligned its internal strengths to gain competitive advantage. Some of the internal capabilities the company possesses consist of human resource, technology, finance and technology. The resort and Spa has the best recruitment conducted by contracted international company. Since, the country has an inadequate supply of workforce, the company relies on qualified expatriates to provide quality services (Shangri-La 2014). The company understands employees as the major asset in running of an organization, hence it is one of the top agendas of their management. Many employees find it very hard to work in other countries. Particularly, the Middle East countries such as Saudi Arabia, Lebanon, Oman, and Qatar have the worst record labor relation in terms of employee treatments (Arabian Travel Market 2014). However, Shangri-La's Barr Al Jissah Resort & Spa has taken advantage of the situation to provide employee with good terms of engagement to increase morale for work. The company pays well and provides financial rewards for hardworking employees to motivate them so as to increase general performance. From its establishment in 2005, the company implemented technology which creates efficiency of operations. Friday et al. (2012, p.55) argue that even though technology is not recognized so much in Oman, its expansion and advancement in travel and tourism sector has assisted and influenced the growth of few market players. Shangri La's Barr Al Jissah Resort & Spa has been working vigorously to gain market advantage through the influence of the internet, so as to improve their sales and customer relations. Social networking portals sites like Facebook, LinkedIn, instagram and Twitter among others, are progressively doing a crucial role in brand awareness strategies (Friday et al., 2012, p.61). Shangri La's Barr Al Jissah Resort & Spa also use its website to market its products and services. The company has integrated its website with travel and tourism affiliate websites like Tripadvisor, Travelocity and Expedia to make sure customers interested in its services get the reviews of other customers before making informed decisions (Klever 2009). The company has large financial resources to run its affairs. Such capabilities has enabled it to hire international employees to work in its headquarters in Muscat and its branches in Seeb, Suwayq etc. Large financial muscle has enabled the resort to renovate its rooms to meet the new demands of the customers quite often. Applegate, Shangri-La (2014) asserts that one of the latest renovations mounted most of the rooms with new Bose Wave radios, 42-inch plasma HD TVs, free Wi-Fi, Jacuzzi and other amenities. The company boasts of drive leadership who are hungry for success. The capability was first fostered by its general manager of Mark Kirk, Director of marketing and sales Lori Collins and communications director Rebecca Platt (Shangri-La 2014). This team has ensured the resort remains a strong brand in Oman tourism and travel sector over the years. Gržinić (2007, p.85) argues that such capabilities have been used to build competitive advantage. Identification and evaluation of the current strategy Strategy is very important for current manager because it provides direction to an organization as a whole (Kandampully 2007). With the increased number of resorts and hotels, managers are compelled to rethink and review their strategies to gain competitive advantage in both local and global markets. Some of the strategies which have driven Shangri La's Barr Al Jissah Resort & Spa to the top of Oman travel and tourism industry include premium pricing, promotion and use of technology (Arabian Travel Market 2014). Pricing mix is one of the most important aspects of attracting customers Shangri La's Barr Al Jissah Resort & Spa only provides four and five star rooms and it charges prices due to the fact that beyond the major products, the resort management claim it also ‘offers’ a collection of intangible gains like sense of luxury, achievement and high status. Shangri La's Barr Al Jissah Resort & Spa currently uses promotion strategy which utilizes different elements of the promotion mix (Lacle 2013). The resort uses major promotion forms comprising of advertising, public personal selling, a sales promotion and public relations. New ad slogan of the Resorts ‘Discover Serenity Amidst Majestic Luxury’ is intended to articulate the message of this resort as a place of new experience and high quality (Shangri-La 2014). Shangri-La website (2014) holds Shangri La's Barr Al Jissah Resort & Spa distribution strategy strongly depends on new information technologies in different formats to enhance efficiency. The company official website works as a better arena for service provision since it is presented with a wide set of capabilities and features offering practical help to clients like reserving a room and booking for family holiday (Klever 2009). Competitive rivalry in the Oman tourism and travel market is very high. Therefore, Shangri La's Barr Al Jissah Resort & Spa must maneuver to advantage of the market (Arabian Travel Market 2014). Even though it has done this through premium pricing and use of technology, this is not enough and it must endeavor to expand into global markets to outdo its main rivals Azaiba Hotel and Crown Plaza Hotel, in every market (Global Business Platform 2014). Innovation is likely to take the center stage of competition and Shangri La's Barr Al Jissah Resort & Spa must do enough to differentiate its product which could be similar to those of competitors in future. The current strategies are effective and only keep watch on the trends of global travel and tourism to be able to differentiate itself from other market players. Conclusion From the research, it is evident that Shangri La's Barr Al Jissah Resort & Spa is only operating within Oman. For a big resort of the same nature, it can be risky providing the dynamic of the hotel industry. As the century progress, the resort is likely to face stiff competition, loosing of customers due to premium pricing and ever-changing customer preferences. Shangri La's Barr Al Jissah Resort & Spa is likely to continue enjoying the dominance of Oman travel and tourism industry due to its strong brand. However, must adopt new strategies such as flexible pricing, investing in successful and similar markets, and creating joint venture and partnership with established companies in new markets. References AbuKhalifeh, A.N & Mat, A.P 2012, Service Quality Management in Hotel Industry: A Conceptual Framework for Food and Beverage Departments, International Journal of Business and Management; Vol. 7, No. 14, 2012, pp.135-161. Anderson, W 2010, Determinants of all‐inclusive travel expenditure, Tourism Review, Vol. 65 No. 3, pp.4–15. Arabian Travel Market 2014, Oman tourism development marches on, Viewed on 28th Nov 2014 http://www.arabiantravelmarket.com/news-and-media/ATM-Press-Releases1/Oman-tourism-development-marches-on/ Global Business Platform 2014, Food and Hospitality Oman 2014: Oman Market Report 2014 on the Food & Hospitality Industries, Omanexpo. Gržinić, J 2007, Concepts of service quality measurement in hotel industry, Economic Thought and Practice, Vol. 16, No. 1, pp. 81-98. Friday, D, Ntayi, J.M, Muhwezi, M, Eyaa, S & Tukamuhabwa, B 2012, Collaboration Arrangements, Internet Technologies and Physical Distribution Service Quality, Universal Journal of Management and Social Sciences Vol. 2, No.6, pp.51-71. Kandampully, J.A 2007, Service Management, the New Paradigm in Hospitality, Pearson Prentice Hall, New Jersey. Kotler, P & Keller, K.L 2006, Marketing Management (12 ed.), New Jersey, Prentice Hall. Klever, A 2009, Behavioral Targeting: An Online Analysis for Efficient Media Planning, Diplomica Verlag. Lacle, R 2013, Management perception of service quality in the hospitality industry, Haaga- Helia University of Applied Sciences. Power, T & Barrows, C.W 2006, Management in the Hospitality Industry, Hoboken, New Jersey Rutherford, D. G 2007, Hotel management operations London, John Wiley & Sons. Shangri-La 2014, Shangri-La Company Official Website, Viewed on 28th Nov 2014 http://www.shangri-la.com/muscat/barraljissahresort/ Tripadvisor 2014, Shangri La's Barr Al Jissah Resort & Spa-Al Bandar, Viewed on 28th Nov 2014 http://www.tripadvisor.co.uk/Hotel_Review-g4283716-d302117-Reviews-Shangri_La_s_Barr_Al_Jissah_Resort_Spa_Al_Bandar-Barr_Al_Jissah_Muscat_Governorate.html Read More