Marketing Strategy for Sandals Resorts, Jamaica - Case Study Example

Marketing Strategy for Sandals Resorts, Jamaica Introduction Sandals Resorts, located in the Caribbean Islands, is the leader in all-inclusive holiday packages. The Group has won the Best All Inclusive Resort Operator award, as well as the Outstanding Achievement Award in 2012 (Carebarena News, 2012). They have been honored the award for the Best All Inclusive Resort Operator for 16 consecutive years. The resort offers more amenities, choices and innovations than any of its competitors (GULL, 2012). The experience, talent and training of the management team ensure that Sandals Resorts stays at the forefront of the ‘all-inclusive’ market. This motto is ‘luxury included for two people in love’ and accordingly they cater to the just married couples or the ones that would like to perform their wedding ceremony at the Resort with all-inclusive facilities, arrangements and amenities. The resort enjoys excellent location, ocean front, ambience, soothing to the nerves, thereby offers an ideal vacation. 2. Mission According to Mintel Research, the overall spending by UK tourists on overseas holidays would increase 17 percent by 2015 (Breaking Travel News, 2010). However, most of this would be driven by higher holiday costs. In constant price the terms the expenditure on holidays would decline by 1.6 percent between 2010 and 2015. The UK has a strong all-inclusive holiday market which is divided into the domestic and the outbound holiday market. The outbound sector is the larger of the two and as of now the most popular destinations are Spain, France and Greece (Key Note Limited, 2012). All-inclusive holiday offer budgetary benefits, ATOL (Air Travel Organizers License) protection and the benefit of all bookings at one go. The Jamaican sector as of now receives the bulk of tourists from the United States and Canada. Sandals Resorts is one of the finest resorts in the island and has been attracting tourists from Europe as well. The mission of the Resort is now to target the UK market to make the Resort sustainable. Jamaica has plenty of tourist attractions and, hence, the mission of Sandals Resorts is to enhance the visitor experience by offering products to suit the European market. The overall objective is to increase tourist arrivals from the UK. 3. Situation Analysis Sandals Resorts offers vacation experience with more quality inclusions than any other resorts in the world. Developing a marketing strategy is essential to attract new customers and to promote a new product. Sandals Resorts’ mission is to offer the ultimate Caribbean experience through innovative products and consistent quality service. All-inclusive packages save the traveler the hassles and costs in making bookings from different points of sale. Travelers prefer the security, convenience and luxury of all-inclusive packages over freedom and independence of individual holidays (Duarte, 2012). Competition is fairly strong in the Caribbean Islands and it would be necessary to evaluate and recommend the marketing strategy for the UK tourists. Interest in the UK market is justified as the average length of stay by foreigners is 9.0 nights against the UK visitors, which is 15.7 nights. In 2010, 122,794 UK tourists visited Jamaica for leisure, recreation and holiday (Jamaica Tourist Board, 2010). The average rate of growth of UK visitors has been 1.3 percent between 2006 and 2010. 4. Pest Analysis (Appendix A) 5. SWOT Analysis Strengths Jamaica, the island nation is focused on the tourism industry. Strengths of Jamaica Resorts: Environmental friendly Ranks among the top 25 hotels in the Caribbean Arrangements for all-inclusive packages including baby-sitting TQM in human resources management Brand synonymous with quality Caribbean holiday experience (eHotelier, 2006) Their service levels exceed guest expectations All beach-front rooms and suites Weakness Reduced workforce at Sandals Resorts. Poor public relations and communication of their CSR efforts Adverse publicity of terrorism and crime in the region No control over the climatic conditions and the weather. Opportunities According to Mintel, Brits spending £3000 or more for a holiday are less likely to be affected by the economic environment. The more affluent continue to spend and the average expenditure on these trips has not dropped. The all-inclusive holiday market is on the rise and hence Sandals Resorts should tie up with the domestic carriers to offer low packages to UK tourists. Forty-three percent of the Brits agree that package holidays ‘are a safer bet in the current climate’ (Mintel Oxygen, 2012). Threats Terror and Crime in Jamaica deters tourists Unpredictable weather and cyclones Fluctuating exchange prices and higher fuel costs drive the airfares Low consumer confidence Tourists spending under £1300 for a vacation likely to postpone taking a holiday The number of hotel rooms in the island is increasing while there was a decline in tourism market in 2009 over 2008 (Kennett-Hensel, Sneath and Hensel, 2010). United Nations World Tourism Organization’s World Tourism Barometer predicts rapid slowdown of international tourism growth (Kennett-Hensel, Sneath and Hensel, 2010). Tourism leads to sexual exploitation of women and children 6. Marketing Objectives (SMART) The marketing objectives comprise of the goals intended to achieve and the strategy comprises of the activities that help achieve the objectives. The marketing objective of Sandal Resorts is to capture a market share of 20% of the short-breaks market in UK by 2015. As of 2010 the summary of the visitor arrivals in Jamaica has been provided in Appendix B. The UK tourists would like to “do as little as possible for a week or two”, while, according to the study conducted by Mintel, 38% of the respondents expect luxury accommodation. In addition, 83% want access to a beach or pool (Mintel Oxygen II, 2012). This implies that the UK tourists seek to unwind and disengage; they are not seeking any cultural experience. The older generation has higher savings, more time for pleasure and fewer responsibilities, thereby making them an attractive segment for the hospitality sector. Specific – Based on the above findings, the specific objective of marketing strategy for the UK is to attract the up-market tourists, particularly the elderly segment and those interested in all-inclusive packages. Sandal Resorts should target the segment based on income and education as the high-end segment would be keen to spend more than a week at Jamaican islands. Moreover, studies also confirm that those who spend over £3000 have not been affected by recession or economic downturn. The objective is to achieve 20% of the packaged holiday market from UK by 2015. Measurable – This implies that each year for the next three years Sandal Resorts should achieve a growth rate of about 8 percent. Achievable – This objective is achievable because the independent holiday market has started to decline. Moreover, Sandals Resorts has innovative, talented and creative human resources that can help the organization achieve the intended objectives. In addition, service is the essence of success in this sector. Sandals Resorts would ensure excellent technical (what the customer receives) and functional service (how the service is being delivered) (Parasuraman, Zeithaml and Berry, 1985). Through adequate brand awareness and loyalty programs, the Resort will be able to achieve the intended objectives. Realistic – the objectives are realistic because the demand for overseas holidays in UK is growing. Besides, Jamaica offers precisely what the UK tourists seek – comfort, convenience, care-free vacation. The resort also has the type of packages that UK tourists seek – all inclusive packages. Besides, the organization has the necessary resources such as finance, trained manpower for service delivery, good reputation and the zeal to achieve. Timed – The objectives are intended to achieve over three years between 2012 and 2015. 7. Strategy for Delivery Technology and the evolution of the internet has changed what people desire, how they shop, how they gather information and what they expect. These impact the tourism industry in the forthcoming years. Product - Holiday is a luxury item and hence quality beach vacations should be packaged. The UK tourists seek relaxed vacation at sea or at any beach; the resort is adequately equipped to cater to all age groups. The elderly can unwind and relax; the youth and the newly-married can enjoy their own privacy, a romantic environment with candle-light dinners. The singles too have enough attraction to enjoy their vacation on sprawling beaches and other activities. For all age groups and segments, an all-inclusive packaged holiday can be developed to suit individual needs and desires. Pricing – Loyalty discounts and group discounts would be provided to capture a large segment. Special honeymoon packages during the wedding season could attract the newly-weds. For those who prefer individual holidays, special airfare could be provided in alliance with the airlines. Since the resort has three categories of rooms and suites, individuals could plan their holiday based on their budgets and needs. Promotion – the aim is to attract the UK tourists and to create a brand image as an environmentally friendly resort. The communication and marketing efforts at Sandals Resorts is lacking in promoting its CSR initiatives. Thus, special efforts would be needed to communicate the right image and attract the intended segment. Technologies such as the web and digitalization have changed tourism (Yeoman and McMahon-Beattie, 2006). People use their mobile phones to gather information on destinations. The number of mobile users searching travel information is expected to increases 51% as per Google (Duarte, 2012). Therefore, Sandals Resorts must offer dedicated mobile experience to ensure they maintain market share, as browsing from mobile phones becomes more frequent (Mintel Oxygen, 2012). Creating an online presence ensures continued patronage. Social media helps people gather user reviews and based on recommendations they finalize their travel plans. Thus, the organization should have its own blog and invite user reviews on the website which would help in attracting the target segment. The youth particularly seek user reviews and feedbacks before they make their travel plans. They can even tie up with the airlines and send consolidated mails and messages with information on all-inclusive packages. Discounts can be offered for those who quote a reference number provided in these messages. This strategy would help the Resorts evaluate to what extent their promotion strategy fetches them business. This would then help them amend their strategy if needed. The elderly rely on the print and television media and, hence, advertisements in magazines and televisions should also be provided to attract the maximum number of tourists. Place – Intermediaries are becoming redundant in the tourism sector and the trend is towards direct web marketing. Thus, Sandals Resorts can provide direct bookings through their website and additionally through travel agents as well. Tie up with travel agents and tour operators in the UK would be a good channel apart from bookings being available from the concerned airlines’ website. In the service sector three other Ps are essential. People – Sandal Resorts has the necessary trained manpower to cope with the administrative and service front. Processes – Its processes too are well-defined. Physical evidence – By virtue of its geographical location, Sandals Resorts enjoys excellent beach front and all its rooms and suits have an opening towards the ocean. The ambience is serene and soothing. 8. Evaluation and controls The evaluation of the strategy can be achieved through hotel occupancy rates as well as through airline bookings. Moreover, technology has made it possible to ascertain the website visitors. The government in both the countries also evaluates and maintains statistics on tourist arrivals and departures to different destinations. These would help evaluate the extent to which the marketing efforts serve to enhance the arrivals in Jamaica from the UK. As far as the controls are concerned, customer feedback surveys or a feedback form when customers leave the premises would help. This would help understand the level of service, customer expectation and service delivery gaps, if any. This in turn would help the resort to enhance its products and service to suit the customer needs and preferences. Satisfied customers would be encouraged to leave their feedback on the company blog. Both positive and negative feedback would be invited as this is a learning process; it would help enhance the services. Returning customers would be offered discounts and bonuses for referrals. Works Cited Breaking Travel New. Five Years for UK Market Recovery. August 26, 2010. Web. 17 May 2012. . Carebarena News. Sandals Awarded at Prestigious London Event. 28 Jan 2012. Web. 17 May 2012. . Duarte, T. Staycation Trends for 2012 – Travel Mole 20.01.12. Maya Asset Management. 2012. Web. 17 May 2012 . eHotelier. Sandals Announces new Managing Director, UK & Europe. 27 June 2006. Web. 17 May 2012. . GULL. Sandals Resorts International. Global University for Lifelong Learning. 2012. Web. 17 May 2012. . Jamaica Tourist Board. Annual Travel Statistics - 2010. 2010. Web. 17 May 2012. . Kennett-Hensel, P.A., Sneath, J.Z., and P.J. Hensel. “Developing Sustainable Tourism: Managers Assessment of Jamaicas Ten-year Master Plan.” International Journal of Culture, Tourism and Hospitality Research, vol. 4, no. 2: 2010, pp. 143 – 155. Print. Key Note Limited. All-Inclusive Holidays Market Assessment 2012. 2012. Web. 17 May 2012. . Mintel Oxygen. Holidays on the Internet – UK. April 2012. 2012. Web. 17 May 2012. . Mintel Oxygen II. “Holiday Market All Packaged Up - Half of Brits Prefer Package Holidays.” Mintel Oxygen Reports. 2012. Web. 17 May 2012. . Parasuraman, A., Zeithaml, V.A., and L.L. Berry. “A Conceptual Model of Service Quality and Its Implications for Future Research.” Journal of Marketing, vol. 49: 1985, pp. 41-50. Print. Yeoman, I., and U. McMahon-Beattie. “Tomorrow’s Tourist and the Information Society.” Journal of Vacation Marketing, vol. 12, no. 3: 2006, pp. 269-291. Print. Appendix A PEST analysis Appendix B Source: Jamaica Tourist Board (2010). Read More