Rainbow Bridge Hotel SWOT Analysis - Case Study Example

Team member name Hotel name and number HOTS folder number Tutorial time and tutor Word count.2543 Table of Content Table of Content 2 1.0.Introduction 3 2.0.Business Plan for Year 4: 4 2.1.SWOT Analysis 4 2.1.1.Current strengths and weaknesses of your hotel 4 2.1.2.Current opportunities and threats in the market 6 2.2.Objectives 7 2.3.Strategies: 7 2.3.1.Corporate Market 7 2.3.2.Leisure Market 8 2.3.3.Other market segments 9 2.3.4.Food and beverage 10 2.3.5.Service quality 11 2.3.6.Staffing 12 2.3.7.Physical property condition 13 2.3.8.EMS 13 3.0.Financial Targets 15 3.1.Ave Rooms’ occupancy% 15 3.2.Average Daily Rate 15 3.3.Total Room Revenue 15 3.4.Total Food & Bev Revenue 15 3.5.Total Revenue 15 3.6.Total Income before tax 15 Total Food & Bev Revenue 16 Total Revenue and total revenue before tax 16 4.0.Reference List 17 5.0.Appendices 18 5.1.Current Balance Sheet 18 5.2.Statement of Income for Year 3 20 5.3.Monthly indicator report for Year 3 21 5.4.Financial calculations for your forecast figures 22 3.7.Ave Rooms’ occupancy% 22 3.8.Average Daily Rate 22 3.9.Total Room Revenue 22 3.10.Total Food & Bev Revenue 22 3.11.Total Revenue 22 3.12.Total Income before tax 22 5.5.EMS Decisions 23 1.0. Introduction My hotel’s name is “Rainbow Bridge Hotel” (three star hotels); situated on the seafront, close to other hotels and a short distance from the main shopping centre. The town is less than 30 minutes from the nearest airport, and there are good road, rail and bus links to major cities and other resorts. The town has a resident population of 145,000. 2.0. Business Plan for Year 4: 2.1. SWOT Analysis 2.1.1. Current strengths and weaknesses of your hotel Strengths One of the strengths of Rainbow Bridge Hotel lies in its strategic position/location. The hotel is situated near a seafront and its proximity to air port which is only 30 minutes away makes it ideal. Besides, there are good infrastructures including good road, rail and bus links to major cities and other resorts. Furthermore, its closeness to other hotels and the main the shopping centre as well as the accessibility/infrastructural network including roads, rail makes Rainbow Bridge Hotel an ideal destination and the conspicuous option for various Business men and women, domestic and international travelers among others. The Hotel is also located in what seems to be a major transit point for the small businesses. The other strength is the high demand for rooms in the absence of other good hotels. Rainbow Bridge Hotel has an average occupancy of 64.5%. Again, the establishments such as Shopping Mall and other shops in the area add to the demand for not only the rooms but also Food and beverage which is estimated at $3,875,588 of revenue contribution. Being a three star hotel, Rainbow Bridge Hotel is more upgraded relative to other small hotels and has spacious rooms together with quality faculties which include among others meeting and conference facilities for various groups of customers. This gives the hotel an edge over others. The hotel is also in a god position to meet and maintain expectations of its customers not only in terms of accommodations related services but also meeting and maintaining service deliverables. The other major strength of the hotel is attributed to its favorable relationships with it’s the supplies thus enhancing times delivery of goods and services. Production quality, customers loyalty and sound management as attested by its performance as reflected in the books of accounts is yet another factor which gives the hotel a competitive edge over others. Weakness In the dynamic business environment, there is need for through investment in the marketing and promotion activities, however, the hotel suffer from inadequate funds to in implementing various marketing strategies and promotions. The other weakness of the hotel concerns possible and inevitable wear and tear of the outer property as the Hotel is located near the seafront. The hotel is also vulnerable to structural defects and rudimentary constructions. This may lead to customers /clients dissatisfactions. Due to its proximity to the sea, there is additional requirement, sound and proper waste management. This requires additional inputs failure to which may lead to possible degradation and waste management issue. Furthermore, the hotel business is susceptible to economic shocks and Downturn which means that people are likely to spend less especially in leisure activities. Lastly, Rainbow Bridge Hotel is sounded by other small hotels and a major shopping mall. This pose a potential competition based on the provision of similar products /services. Besides, the hotel may be affected by absence of important/crucial skills, inability to maintain customers and due to unpredictable business environment. 2.1.2. Current opportunities and threats in the market Opportunities There is potential for establishment of destinations along the seafront which also include beaches. There is also great potential for creating additional recreational facilities for guest without incurring any more open space. The hotel may consider coming up with home stays and accommodation facilities for Domestic Tourisms along the seafront. This would also be a point of attraction for other people outside the current catchment area. The other potential for the hotel is due to advance in technology as it benefits by extending its market areas, products and services. By adopting the new technology, the hotel can open new distribution channels. Threats One of the biggest threats to the hotel is due to possible competition by new entrants in the hotel industry. The second and major threat is linked to the unstable world economy couples by ever increasing inflation causing an increase in the operation costs. Other threat can be attributed to change in government policies which may need an additional trading requirement. Besides, the hotel face the threat related to changes in taxes and population age-structure which may alter service provision and demand respectively. 2.2. Objectives To create product awareness Increase sales Provide the market for the product To penetrate the market To gain competitive edge in the market 2.3. Strategies: 2.3.1. Corporate Market In corporate world, hotels may be faced with various challenges. Therefore, there is need to integrate measurable marketing approached especially in advertisements and marketing plan. This can help so that you can evaluate what marketing strategies work and which ones are costing you money without paying off in the end. Again, as the corporate market segment significantly contributes to the overall share of incomes the hotel should consider strategies that would help it retain its share. 2.3.2. Leisure Market There is need to consider Sales promotion such as having a wide choice of coupons, special offers, free gifts and others (Kotler et al 2008, 714). This should be established with unique quality that is able to capture consumers’ attention while offering appropriate information that would lead them to making an informed decision on purchasing the products. It is also worth taking note of the current price and where possible adjusts accordingly to attract more customers. This is attributed to the fact that price of goods and services determine or influence both demand and the business profitability. In the context of this paper, there is need to consider provision for discount for key accounts which are vital for the Hotel. Apart from the prices, improvement of the quality of products should be considered. According to Kotler et al. (1996), the unique appearance, function, and support of associated with the products often contributes and make up for what the potential customer will actually buy in the long run. Therefore, manager of Rainbow Bridge Hotel need to pay keen attention particularly to the taste and preferences of their products to the needs of their clientele. There is also need for appropriate management of product components, planning and development with the customers needs in mind. Along this line, there is an urgent need to adjust on the range of products including the different packages, brands, labels and other distinguished products’ features. 2.3.3. Other market segments Embarking on appropriate conference strategies can help the hotel improves its performance. One of the key marketing strategies is to establish the hotel website that give the customers detailed information related to the venue, location, charges/rates, available facilities, room capacity, F & B travel and accommodation. Include keywords in the text that highlight your location to help organizers who are searching for meeting facilities in your area. There is also need to establish good working relationships with conference organizers. This is a key element of conference marketing based approaches. Conference organizers tend to become loyal and regular clients if they are convinced that the available facilities are suitable. Besides the conference market, product and price strategies, sale promotion can be useful in the improvement of the Hotel’s performance. Kotler (2005) suggests that there is need to divide promotion approaches based on the main communication mix tools comprising of advertising and sales based marketing. Both may exist independently or may compliment each other. Other considerations can be on communication tools such as public relations, employees interpersonal and selling skills as well as direct marketing (Kotler, 2005, p. 316). This is attributed to the fact that customers tend to respond to leisure service price deals based primarily on economic reasons. Apart from the economic factors, there is also need for strategies that trigger emotional motives as this are also thought to drive responses based on non-price deals (Kirk and Bush, 1998). Also important is the encouragement of loyalty. The hotel needs to come up with suitable loyalty program which can be made free of charge based on the more time or number of days one spends at that hotel (Dessler 2006). For instance, it a guest stay for four days, he or she can be given the fifth night free of charge. Through this it is possible to track the degree of customers’ loyalty and adjust accordingly based on the benefits which accrue from the offer. 2.3.4. Food and beverage In order to improve the overall performance of the hotel, attention should be paid on the food and beverage services. Improvement should revolve around planning, financial issues. There is also need for a focus on the cost control procedures. Plan should be done in line with the food and beverage menu driven by the customers’ tastes and preferences. There is also need for particular attention on menu impacts operation factors/variables such as labor right from the production to the delivery of the products and services and clean ups, equipments needed and associated purchases that needs to be made in relation to F & B (Hayes and Ninemeier, 2007). Furthermore, all food related services should be made or planned with consideration to the current financial issues/status such as operation budget. In addition, cost control systems need to be applied right from the purchasing of goods to receiving, storing, issuing and to services related to the goods. The various steps that need to be followed are purchasing which involves coming up with specific purchase specifications, seletion of suppliers, puting the correct or approriate quantities, and finally evalutaion of the whole process so see wether it is in line with the purchasing plans. After purchasing , the next step is the receiving which should be accompanied by establishment of suitable receiving procedures and filling up of the neccesary documents. After receiving the products, there is need to come up with suitable storage procedures. In this case, the hotel management needs to come up with effecttive systems for controlling the quality of the products, securing them from theft, and effective storage of the products in good location. While issuing the products, there is need to pay special attention on the matching issues and usage. The final step, service should be done in the context of good sanitation abnd cleanliness. There is also need for attentiveness when serving the F & B (Hayes and Ninemeier, 2007). 2.3.5. Service quality In given quality of service rendered depends on the consistency between the service provided and the customer’s expectations. It addition, service quality needs a framework and a better understanding the dynamics of service quality works and being able to maximize on the basics underlying trends that create new areas of emphasis’(Emmanuel, Kevin and Ball, 2010). Having knowledge about customers taste and preference is one of the strategies which can help in the improvement of service provision. This requires pro-activeness in managing the service mix by applying a appropriate selection of strategies/approaches. For instance, the hotel could consider strategies which are likely to attract customers based on the preferred brands relative potential competitors (Ford and Heaton, 2000). Improvement of the service quality could also be achieved through training based on suitable lessons content such as the ability of the employees to respond to the customers’ problems and needs while also being in a position to resolve any challenges promptly and easily ( Petzer, Steyn and Mostert, 2008). Service provision and quality should also be structured according to the demand which may require the need to schedule for downtime especially during the low seasons. Another option is training of employees in multi-skills so that they can be able to respond to a wide variety of activities related to customers needs (Emmanuel, Kevin and Ball, 2010). The hotel could also consider extra efforts in the implementation of new work schedules, or giving free services all with an aim of maintaining the customer’s loyalties. 2.3.6. Staffing Management in the Hotel needs to institute performance appraisals for the hotel staff members within a specified time limit or interval. This would produce feedback from the various departments and employees as well as developing suitable training process etc. The evaluation is very critical in not only encouraging the employees but also motivating them work extra hard in the future. Evaluation also assists staff members in enhancing their skills and abilities especially when reward and compensations systems are in place (Petzer, Steyn and Mostert, 2008). Job evaluation should also be accompanied by staff training. In the contemporary hotel industry, it is all about the qualities and competence in the staff/employees as this dictates the level of service quality which revolves around knowledge, skills and believes which influence the business’s survival in the modern business environment. Training of employees is therefore quite critical in numerous ways such as equipping employees with skills, motivation and inspirations (Nickson 2007). Training and development of employees is also vital components of HRM’s practices and policies. In addition, training of employees tends to improve their capabilities while strengthening their competitive advantage. Again, when done effectively, training improves the employees’ characters and professional abilities (Ford and Heaton, 2000). 2.3.7. Physical property condition The hotel suffers from inevitable tear and wears especially on part near seafront. Besides it is susceptible to structural defects which may influence customers/clients dissatisfactions. Therefore there is need for renovation or coming up with new, Maintaining and improving the physical condition of the hotel can also be done by monitoring the physical maintenance activities and implementing capital expenditure projects likes coming up with state of art structures that attract more customers. 2.3.8. EMS In considering environmental management systems (EMS), the management of the hotel needs to comprehensively understand the environmental footprint including energy and water consumption as well as generation of waste. One of the strategies is coming up with an annual resource use (energy and water consumption and waste generation) or monthly estimate to give a basic benchmarking of the hotel relative to other hotels. It will also allow hotel management to separate what are "fixed costs" (resources used in public or back of house areas) and "variable costs" (resources used by guests). There is need to adjust on practices that are likely to minimize Waste generation while conserving resources. This can be achieved through controls, recycling systems and adoption of high efficient technologies. There is also need for Investing in Cost-Effective Renewable Energy Systems. The overall implementation of EMS should be geared towards the integration of EMS into the hotel’s activities, products, and services. This can be done by checking on the operations of the hotel such as use of chemical and take appropriate adjustments geared towards reducing the impact of the hotel to the natural environment especially the sea. Efforts should be geared towards achieving the ISO 14001, an environmental performance standards instead of specific technology criteria (Hayes and Ninemeier, 2007). 3.0. Financial Targets YEAR 3 AVERAGES/TOTALS YEAR 4 FORECASTS 3.1. Ave Rooms’ occupancy% 64.5% 72.1% 3.2. Average Daily Rate $85.2 $91.68 3.3. Total Room Revenue $5,129,312 $51,519,137.71 3.4. Total Food & Bev Revenue $3,875,588 $4,170,132.69 3.5. Total Revenue $9,646,661 $10,379,807.24 3.6. Total Income before tax $1,548,341 $1,666,014.92 Average Room occupancy rate From the table above, the average Rooms’ occupancy rate is projected to increase in year 4. This may be influenced by various factors including early arrivals and stay-over. Average daily rate Like the average room occupancy rate, average daily rate is projected to increase probably as a result of improved service delivery. The average daily rate is also influenced by seasonality. For instance, during the high season, one expects an increase in average daily rate and verse versa. Total Room Revenue By extension, the rate of occupancy determines the total room revenue. However, this also depends on the strategies employed and which aims at maximizing the revenue. The increase in revenue rates may be attributed to manipulation of the principles of opportunity cost, and the simple laws of supply and demand to improve the total room. Total Food & Bev Revenue The projected increase in food and Beverage revenue is linked to such factors as the rate of room occupancy which goes together with demand for food and beverage coupled with increase in the number of customers probably as a result of improvement in service provision. Total Revenue and total revenue before tax The total revenue is a summation of all revenue and largely depends on the management of the hotel including service delivery. This further affected by taxation. 4.0. Reference List Ford, R.C. and C.P. Heaton (2000). Managing the Guests Experience In Hospitality. Thomas Learning, Canada. Hayes and Niemeyer (2007). Hotel Operations Management, 2nd ed. Pearson Prentice Hall: Pearson Education Kirk L. W., and Victoria D. B. (1998) "Promoting leisure services: economic and emotional aspects of consumer response", Journal of Services Marketing, Vol. 12 Iss: 3, pp.209 – 222 Kotler P., Armstrong G., Saunders J., and Wong V. (2008) Principles of Marketing. 5th European edition. Prentice-Hall. London. U.K. Kotler, P. (2005). Principles of Marketing, 4th European ed., Harlow: Prentice-Hall Nickson, D (2007). Human Resource Management for the Hospitality and Tourism Industries. Elsevier. Petzer, D.J. Steyn T.F.J. & Mostert P.G. (2008). Competitive marketing strategies of selected hotels: an exploratory study, Southern African Business Review Volume 12 (2): 1-22 5.0. Appendices 5.1. Current Balance Sheet 5.2. Statement of Income for Year 3 5.3. Monthly indicator report for Year 3 5.4. Financial calculations for your forecast figures YEAR 3 AVERAGES/TOTALS YEAR 4 FORECASTS 3.7. Ave Rooms’ occupancy% 64.5% 72.1% 3.8. Average Daily Rate $85.2 $91.68 3.9. Total Room Revenue $5,129,312 $51,519,137.71 3.10. Total Food & Bev Revenue $3,875,588 $4170132.69 3.11. Total Revenue $9,646,661 $10,379,807.24 3.12. Total Income before tax $1,548,341 $1,666,014.92 5.5. EMS Decisions Read More