REPORT: The challenges and opportunities of Four Seasons Hotels and Resorts BY YOU YOUR SCHOOL INFO HERE DATE HERE The challenges and opportunities of Four Seasons Hotels and Resorts 1.0 Introduction Founded in 1961 by Isadore Sharp, the Four Seasons Hotels and Resorts had earned a powerful brand reputation as a leader in service excellence in the luxury hospitality sector…
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In 2007, Isadore Sharp sought an exit from this long-term investment, selling the multi-national Four Seasons properties to Kingdom Holding, owned by Al-Waleed bin Talal from Saudi Arabia and Cascade Investments, controlled by the software and technology guru Bill Gates. Upon taking this business private, Four Seasons Hotels and Resorts were able to internalise international expansion efforts, redevelop the business model, and restructure financial governance of the business without undo pressures from international investors in the stock market. However, this acquisition of Four Seasons in 2007 came at a time just prior to the global recession occurring between 2008 and 2010, which radically changed the predictability and revenue growth opportunities for this luxury hospitality business. The business’ long-term profitability has been impacted by a series of government-imposed austerity packages in European nations, reforms in the banking sector in Asian and North American countries, and changes to consumer sentiment about luxury travel and tourism and its correlation to their personal finance availability. Hence, the economic and social conditions in the luxury tourism sector suddenly changed, creating a new set of pressures on Four Seasons to sustain its existing business model whilst still considering redevelopment of its long-standing brand to better service the contemporary consumer in the post-20th Century tourism sector. This report examines the macro- and micro-level factors impacting many dimensions of the Four Seasons value chain, its strategic focus for long-term sustainable growth, and marketing in a very saturated and dynamically competitive international hospitality sector. The report further examines the marketing prowess of Four Seasons, the business’ current and long-term operational strategies, and the characteristics of consumer behaviour that impact Four Seasons’ service ideology, and cost structures impacting profitability with this business. 2.0 Macro and Micro Analysis of the Industry To better understand the performance and productivity of the current Four Seasons Hotels and Resorts business model, it is necessary to examine the macro- and micro-level factors that impact sustainability of competitive advantage influenced by industry conditions. 2.1 PESTLE Analysis POLITICAL The influence of political factors for Four Seasons is disparate, due to the dynamics of being a multi-national business with presence in North America, Asia, Europe and Australia. In Asia, the hospitality sector has significant difficulties sustaining hospitality-centric operations without the direct support of government. For instance, in India, the government imposes substantial taxation on luxury hotels, which raises the costs of operations and increases prices along local supply chain networks. It is even difficult to establish strategic alliances or joint ventures with major tourism airline carriers in many Asian countries where Four Seasons operates, thus impacting co-branding strategy opportunities and the ability to create periodic promotional incentives to entice more consumer interest in bookings due to the government influence and government-imposed costs. However, in some countries, such as Canada (Four Seasons is headquartered in Ontario, Canada) and Europe, governments provide incentives for consumers to engage in shopping with guarantees that they can reclaim the
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