Marriott International, Inc.
State of the Lodging Industry
The lodging industry has seen improvement since the economic downturn of late 2007. There are factors beyond the industries control that could stifle growth in the industry, including but not limited to the still weak global economy and governmental breakdown. Since 2010, the industry has seen steady growth in average daily room rate (ADR), revenue per available room (RevPAR), revenue and net income. The have either reached or almost reached pre-downturn (2007) rates. Room construction in much of the United States has also started to rise again but at a slower rate than the financial indicators.
Most of the industry growth continues to be in the transient market. Cutbacks in business and government spending have held back the growth of the group and business markets, however, they are expected to continue to increase. Many in the hotel industry have taken on the addition of fees to increase revenues for such services as safes, parking and business centers.
The U.S. lodging industry would receive a boost should the Jobs Originated through Launching Travel (JOLT) Act. Introduced in March of 2013 and currently in committee for consideration, this bill will ease visa processing and grant certain individuals longer stays in the U.S. This bill is expected to substantially increase the number of visitors to the U.S. and increase employment.
According to the Conference Board Inc., the consumer confidence index at 79.7 in September 2013 up from the recession low of 25.3 in February 2009, but still below levels above 100 considered normal during a typical economic recovery. In addition, US Department of Commerce determined Americans’ real disposable personal income increased 3.9% ...
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InterContinental Hotels Group (2012) Annual Report 2012. Retrieved from http://www.ihgplc.com/index.asp?pageid=56&data=Reports
Kwon, E. (n.d.). Lodging & Gaming. Standard & Poor's Capital IQ. Retrieved December 1, 2013, from http://www.netadvantage.standardandpoors.com.ezproxy.bu.edu/NASApp/NetAdvantage/showIndustrySurvey.do?task=showIndustrySurvey&code=lng
Marketline. (2012, November 19). InterContinental Hotel Group Plc Retrieved from Business Source Complete database.
Marketline. (2013, July 30). Marriott International, Inc. Retrieved from Business Source Complete database.
Marriott International, Inc. (2011) Annual Report 2011. Retrieved from http://investor.shareholder.com/mar/reports.cfm
Marriott International, Inc. (2012) Annual Report 2012. Retrieved from http://investor.shareholder.com/mar/reports.cfm
The need among Americans to be diverted in ever more imaginative ways -- through high-thrill parks, virtual reality arcades, and theme restaurants, plays right into the hands of Dave Corriveau and Buster Corley, co-founders and CEO’s of Dave and Busters. The duo’s 50,000 square foot complexes include pool hall, an eye popping, cutting edge midway arcade, a formal restaurant, a casual diner, a sports bar and a nightclub rolled into one sprawling complex. In business since 1990, this is a high energy, highly efficient operation that’s comparable to a Vegas extravaganza. As a matter of fact there are even “for fun” cashless blackjack tables, with fake $10,000 chips. Pricey, but not outrageous, and you get value for your money.
According to Gregory, the booming tourism industry has created a sieve for the rich and the poor. Its high returns are mostly enjoyed by the hotel and restaurant owners and
...ommenced interest rate cuts because it was already at an all-time low. Federal income and estate taxes were slashed during President Bush’s presiding term in office. Trillions of dollars along with federal surplus has been replaced with diffident debits. As stock markets decline, spending may also lesson. Business capital assets can aid the economy during recessions, though it grows at a slow pace. The country’s national return from economic decline will mirror that of Washington’s because the capital’s economy profited drastically more than most states from stock option revenue and the high technology industry, software and dot com bonds. Before September 11th, the majority of air travel companies were already experiencing monetary problems thus any financial assistance offered to them by the federal government would have been improbable in quickening the rebound.
Hilton Worldwide carries out business through three segments: (1) management and franchise; (2) ownership; and (3) time-share. These business segments enable management to capitalize on strengths like brand recognition and economies of scale. The company focuses primarily on the management and franchise segment which consist of 3,918 hotels with 610,413 rooms. Managing the properties, rather than owning them, allows the company t...
Southwest Airlines is operating in an industry that is struggling to make profits. The slowing economic growth and raising fuel costs are lowering earnings while revenues remain the same. The macroeconomic factors affecting the airline industry include unemployment, the economic growth in the United States, and inflation. With low economic growth, consumers are finding luxury items more difficult to purchase and airline tickets for vacations fall into that category. Unemployment contributes to a lack of vacation travelers since individuals who are not employed do not have extra money for vacation or airline tickets. Inflation also causes operating costs of the airlines to be higher cutting into profits.
Each year, America’s travel and tourism industry generates approximately $1.5 trillion dollars in economic output, or about 2.6% of the country’s gross domestic product (Select USA, 2016). Nearly 20% of this economic activity is directly related to accommodations, which serve the short term lodging needs of pleasure and business travelers. Unlike other American economic sectors, this lodging industry is a highly fragmented, diversified market with an incredible variety of suppliers. Temporary overnight lodging can range from undeveloped campsites, hostels, and capsule hotels all the way up to mansions and incredibly luxurious five store hotels. Price ranges run the gamut from just a few dollars a night to thousands of
The hospitality industry in the United States is large, complex and intensely competitive. Within this industry is a segment comprised of hotels and motels, which will be the relevant sector for this marketing plan. To note, the hotel and motel industry in the United States had an estimated value of $137.5 billion as of the end of 2012 (MarketLine, 2012). The industry is forecasted to experience a compound annual growth rate (CAGR) of 5.5% from 2011 to 2016, to attain a value of $179.5 billion (MarketLine, 2012). In this industry, the most lucrative segment is leisure which has a market share of 71.1% (MarketLine, 2012). Sunshine Inn (fictional) is a small independent hotel that operates within the leisure segment of the hotel and motel industry in the United States. It is an adventure-themed hotel situated along the California-Nevada border in order to capture the tourist market for Lake Tahoe. Sunshine Inn has 30 bedrooms and 15 suites and offers specialty home-cooked type meals to guests for breakfast, lunch and dinner. It must be emphasized that the hotel and motel industry is one of the most fiercely competitive in the United States, and in fact, in the world (Johanson & Cho, 2009; Kosarkoska, 2010). Therefore, in order to compete with large hotel chains with five-star hotel rankings, Sunshine Inn will have to depend on strategic approaches, such as effectively targeting and positioning itself in the appropriate market, as well as developing a marketing plan that will promote the unique value propositions that only small, personalized hotels can provide: excellent customer service, customized adventure packages as well as a total customer experience that revolves around enjoyment, fun and discovery. As this marketing plan wi...
The hotel industry performs within a saturated market, driven by customer loyalty and competitive pricing to stand-out. This competitive nature makes it extremely important to capitalise on strengths while improving on
Stringam, Betsy Bender. "A Comparison of Vacation Ownership Amenities with Hotel and Resort Hotel Amenities." Journal of Retail and Leisure Property 7.3 (2008): 186-203. Print.
2. Demand-supply gap : Indian hotel industry is facing a mismatch between the demand and supply of rooms leading to higher room rates and occupancy levels. With the privilege of hosting Commonwealth Games 2010 there is more demand of rooms in five star hotels. This has led to the rapid expansion of the sector.
Who is the hotel’s target market and what services do they use to attract and satisfy this market?
The external environment of the hotel industry in is very competitive and already well established. Trends in the market include promotional campaigns to customers using the "more bang for your buck," method. There are several different segments of the hotel industry including: luxury, upscale, mid-market with food and beverage, mid-market without food and beverage, economy, and budget. Each different segment offers certain amenities to appeal to consumers depending on what they are looking for in an over night stay away from home. As McDonald's looks at entering the hotel industry they have looked at several important issues dealing with an entry into this market. McDonald's would like to enter the market in the state of Illinois where the company's headquarters is. Illinois leads all other states in money spent on tourism totaling $61.1 million in the year 2000. Illinois also ranked fourth in the nation for leisure person trips in 2000. Hotel industry has several important barriers to entry including cost of entry, ability to differentiate from other hotels, and competition in every hotel segment.
The first situation is that of “special events” such as holiday periods, sporting/political events, etc. These events throw more power in the relationship to industry players due to the large customer demand and constrained supply. For example hotels see huge demand around the World Cup sporting event and hotel prices as a result on average spike between 100-300% compared to normal levels and for the last World Cup prices in one city went even further north of around 583% (Mallén, 2013). On the flip side, periods of economic recession have the opposite affect by impacting demand negatively thus forcing hotels to greatly lower prices to spur demand or compete with other industry players. During the last US recession, the average hotel occupancy rate dropped to a record low of 45% at one point from the normal average of 63%. As a result of the greatly declining revenues, such as a 48% drop by Marriott International, industry players laid off over 400,000 employees and greatly scaled back costs and new developments. Also importantly to customers who now saw more power in the relationship drift to their side during this time period, the average daily room price dropped to $98.18 (2009) from the record high of $107.42 pre-recession (2008). Both effects on opposing fulcrums show how important customer demand can affect the industry and the players’ actions
The Hotel industry has become very important in the past years due to immense traveling and growth of international business. Hotel industry not only plays an important role in the life of people but as well as the economy of the country. Development and advancement in the Hotel industry have rapidly been taking place and especially since the rapid change in technology, it is very important for hotels to be promptly keeping up to date. When the hotel industry is spoken of, there are many famous hotels but one hotel company that has been outstanding in growth and other aspects of business, like in Leadership, Teamwork (Employee turnover), Motivation (Customer retention and satisfaction, Goals and objectives, (changing the way hotel business has worked), and Change within the company; structurally inside and physically outside, adding elements, like entertainment, gaming, and outdoor activities, is the Hilton Hotel Company.
“The objective of this phase is to identify events and or future trends that will affect the hotel industry over the next five years. Also, the impact that those events and trends will have on your business in terms of cost and revenue changes and the timing of the impact.” (Fedele, 2010) For each of the external environment, it is also to identify what will affect the performance of the business.