Managing Hospitality Issues:
As the largest service industry across the globe, the hospitality industry has a huge number of competitors or hospitality establishments. The success of these establishments is influenced by various factors such as brand identity, pricing, and marketing. In the past few years, the hospitality industry has been characterized by increased complexities, intense rivalry, numerous cases of failures, and constant changes (Reichel, 2006, p.329). . Therefore, it has become increasingly important for manages of hospitality establishments to develop appropriate business strategies and deal with issues that emerge from time to time. Some of the major considerations to make when developing a suitable business strategy include pricing, staffing, and advertising.
In the first phase of simulation on Michael’s lemonade business, I suggested Michael should sell his lemonade for $0.35, mount a signboard that advertises natural health drinking, and choose one assistant. The pricing decision was a good one since it provided a competitive advantage over the neighboring lemonade stand. The modest price increase was influenced by the fact that reducing the price is not usually a good strategy. Similarly, the selection of a single assistant was effective because it contributed to the production of more lemonade in a cost-effective way. However, selecting natural health drink as an advertisement on the signboard was not a good decision because it only targeted a health-conscious customer segment.
In the second phase of simulation on Blue Mist Resort, the main aim for new marketing and financial decisions was to regain the market share that the revenue generating facility had lost to neighboring hotels in the past ye...
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... influenced the pricing and advertising strategies used by the firms. Pricing and advertising strategies in the simulation were partly determined by the costs of creating the product in each stage of its lifetime.
In conclusion, managing hospitality issues is a daunting challenge for many managers, particularly because of the increased rivalry in the market. This process requires consideration of various factors that are categorized in the establishment itself and the prevalent market conditions. Some of the major components in hospitality management include pricing, advertising or marketing, cost-cutting strategies, and product differentiation and positioning. The consideration of market conditions and factors help managers to develop the most appropriate strategies that give them competitive advantages over rivals and generate increased revenues for the firm.
Reduced pricing does not always ruin margins – Coming into this simulation I assumed big companies, such as Walmart, were able to offer such low prices only because they sold in such large quantities. However, through the simulation this was not the case. We thought to be successful with our low pricing strategy we would have to maintain the most market share. Although by round 5 we were only the second highest market share in the industry. However, this did not end up equating to the bottom line. Compared to Baldwin, Digby had over $20 million less in sales in round 5, but ended the round with $10 million more in profits. Since we invested so heavily in the core of our business our costs were extremely low allowing us to be the most profitable company in our
Lombardi, D. (1994, June). Chain-restaurant strategic planning. The Cornell Hotel and Restaurant Administration Quarterly, 35(3), 38-40.
A couple of Squares has a limited capacity for which to produce their products and smaller companies tend to have larger fixed costs than bigger companies. Therefore, A Couple of Squares must maximize profits in order to ensure that they will stay in business. A profit-oriented pricing objective is also useful because of A Couple of Squares’ increased sales goals. A Couple of Squares increased their sales goals due to recent financial troubles. Maximizing profits is the easiest way to meet these sales goals due to the fact that A Couple of Squares has limited production capacity. The last key consideration favors a profit-oriented pricing objective because A Couple of Squares offers a specialty product. A specialty product often has limited competition, therefore can be priced on customer value. Pricing at customer value will maximize profits as well as customer satisfaction. A Couple of Squares’ lack of production capacity, increased sales goals, and specialty product favor a profit-oriented pricing
The sample represents all U.S. regions and several different hotel location types, including city (47.7%), suburb (15.2%), airport (15.2%), and resort (21.9%). The total data presented here are from hotel managers (N = 98) and hourly employees (N=66) who completed a baseline survey followed by daily diary telephone interviews for eight consecutive days.
More hospitality management positions are being taken by graduates of hospitality management programs than ever before. The holders of
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
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...
Traditionally, the hotel industry has catered to the lodging, dining and other amenities of travellers or guests. The industry operates across the different value chain by offering services and facilities as per the preferences and paying capacity of guests’. Typically, players in this industry own assets and or franchise their brands or manage third party assets. The hotel business is highly capital intensive but at the same time highly competitive, this is due to the presence of a large number of players across the different value chain. The industry being highly regional in nature, the hotel business is directly impacted by overall economic or business activity and tourist movement
3. As the National Tourism plays a vital role in the Hotel occupation Business. So, the Hotels have got special pricing strategies for local tourists.
The luxury hotel industry has become a significant segment of the general hospitality industry and is undergoing expeditious expansions. Hilton’s goal is to create value for its constituents, customers, owners and shareholders, employees, strategic partners, and the communities where each hotel is located-by delivering a consistent value
There should be cleared.environment to servive in this competitive era.they has to evaluate new strategy for targeting their goals and tactics.inventory control ,service for special customers and all other activitives which takes part in each day within the hospitality or tourism operation.in hotel industry there should be something new on each day as compare to others which help to cater
Whitla, P., Walters, P., Davies, H. 2007, Global strategies in the international hotel industry, Hospitality Management, vol. 26, pp. 777–792.
There are two types of tactical risks impacts upon the Group. One is the risk of losing franchise and management agreements. This is an inherent risk for hotel industry and the Group’s light-asset business model. The intensive competition within the hotel industry may reduce the number of suitable business opportunities offered to the Group and may increase the bargaining position of property owners seeking to become a franchisee or manager.
Thanks to these factors, pricing becomes one of the primary uses with which hotels attract customers. However, due to customers’ independent nature, there influence over industry players is limited. In the high-end segment of hotels, price influence becomes even less as hotels find it easier to differentiate themselves from the competition and customers become less price sensitive coming to expect higher prices as a symbolism of superior quality and services. Lastly, corporate business and tour operators can exert more influence due to their large purchases but this affect is of a limited nature and does not extend across the whole
An evaluation of the restaurant’s strengths, weaknesses, opportunities and threats served as the foundation for this marketing plan. The plan focuses on the restaurants marketing strategy, suggesting ways in which it can build on new customer relationships, and development of new food products and targeted to specific customer groups.