Analysis Of The Hotel Industry : Threat Of New Market Entrants

Some of the luxurious hotels with strong brand name and popularity start their business in another country. They take away the employees by offering higher salary and opportunities. Besides, they are more attractive that people would not choose the small, local hotels anymore. Therefore, small hotels are being extinct and can no longer compete in the industry. Furthermore, hotels in some countries that cannot keep up with the advancement in technology failed to survive as well. Those countries do not have the infrastructure or technology to serve such a large amount of foreigners. This would greatly affect the hotels in that industry.

This report focuses on the current issues in the hospitality industry. In this topic, we study Airbnb, a sharing economy pioneer offering short-term accommodation and we are going to discuss how Airbnb is affecting the current hospitality industry. Collating data from Airbnb and the various hotel industry, we estimated the impact of Airbnb’s entry into the current market on various hotel room revenue, and found out the market response of the various hotels. Collating data from Airbnb and the various hotel industry, we identify what causes Airbnb’s impact on the hotel room revenue, we use a methodology strategy that derive benefit from the belonging of space and time variations patterns of Airbnb across city-level markets. We estimate

As we discussed in class, every business is faced with these issues and they are important to managers making strategic decisions. One of the first things learned about business is that if there is no demand for a good or service, the firm that provides it will not continue to exist. Over time the hotel industry has continued to change with market conditions and make itself attractive to business

Hilton Hotels is one of the biggest players in the US lodging industry. It contributes to about 9% of the total rooms in US lodging market. It has presence in over 78 countries with more than 2500 hotels. Lodging industry is highly capital intensive industry, so to reduce capital expenditure Hilton Hotels opted for self-owned Hotels as well as franchising model with the real estate owners. One of the key features of lodging industry is low switching costs for customers. There is very little margin to differentiate from the major competitors in the industry which include Marriott international, IHG, Accor etc.

2. Threat of new entrance: this is very difficult for new businesses enter into this type of business because of the amount of capital that those new business will put in at the beginning. This particular business is not easy for new entrance to enter; it needs a very strong management skill as well as tremendous resources in every aspects.

In the case of Astor Lodges, the company has not been making a profit for five consecutive years and a marketing strategy needs to be put in place. The hotel industry saw $16.7 billion pre-tax profit in 2004 along with 4.4 million hotel room available in the country. The competition of 213 affiliated hotels with a brand company is going to be a challenge but attainable. From 2004, objectives are completed but still turning over unprofitable years with marketing plans put in place.

A lot of business travellers want to stay in well known hotels like Mariott or Hilton. Only 16% want to stay in individual hotels. So for the industry it is important to have a very good reputation. Of course the people try to get the best price for a room and most hotels have company rates which are below the normal rack rate. Also important for a booking is the location of the hotel and the bonus programs. For 26% of the guests Airline milage is important. So the hotels have to work with airline companies and they want special conditons as well.

The Australian hotel industry is at the crossroads. As part of the tourism strategy of the present Federal Government, it is charged with catapulting Australia out of its economic malaise. The industry is, however, constrained in its development by market fluctuations, an oversupply of accommodation and outdated human resource management practices. Several recent research studies have underlined the significant

In contrast, hotel business is more valued in Russia than restaurant sector. Hotel sector is having many difficulties because of low wages. Low quality of service has had a huge impact on the overall image of the Russian hospitality industry, moreover,current economic instability. International hotel companies have a huge impact on developing hospitality industry in Russia. Every year more and more international companies infiltrate to Russia hotel industry. This is primarily due to the lack of experience of Russian companies in the hospitality industry. Their infiltration into the Russian market takes place in various ways: the addition of already built hotels, the absorption of competing hotel chains and the construction of new facilities. There are many international hotels such as: Hilton International, HYATT Hotels Corporation, Capella Hotel Group, Domina Hotels, Four Seasons Hotels and Resorts, Marriot

Contemporary issues in hotel industry: - A comparison of the performance of independent and franchise

They also believe that engaged colleagues will provide efficient operations of their properties, resulting in improved financial performance for the owners. Sustained adherence to these rules is a fundament for their brand reputation is one of the primary means behind the conclusions of their diverse group of hotel proprietors and developers to endow in the Hyatt portfolio of properties around the globe. (www.hyatt.com). Hyatt work with existing and prospective hotel owners and developers to increase their presence around the world, which they expect will lead to guest satisfaction, brand preference and new channels for professional growth for their employees.

According to Investopedia, “A sharing economy is an economic model in which individuals are able to borrow or rent assets owned by someone else” (“Sharing Economy”). This kind of model is becoming more and more popular today as people are finding ways to connect and fully utilize their assets. Hotels are being rivaled by Airbnb, a website that connects individuals looking to rent out a space in their homes or apartment with individuals or groups who would like to stay there. Airbnb, as well as other similar websites and programs, have been creating a disturbance in the hotel market. The main group that has been affected by the introduction of Airbnb is lower-end hotels and hotels that do not cater to business travelers. Since Airbnb is not

The hotel chain when entered in the Indian market already had big competitors who had gained their market share and customer base, so it became difficult to attract customers for the first hotel. (Cunill, 2006) The organisation then started focusing on Market Penetration schemes to acquire the rival’s customers by providing the same services at a lower price than competitors. This chain has attracted many customers through providing high quality services and having hotels in developed areas with customer satisfaction in mind. The organisation uses the Three Pronged Strategy which focuses on generate more usage, generate new users and generate new uses for the business. (Hill and

In the first paragraph, the authors claim that the idea of brand strategy has been widely accepted in hotel industry. The authors cite Dev et al. (2009) and state that the brand strategy becomes vital in hotel marketing. To further support that assertion, the authors continue cite Jiang, Dev & Rao (2002) and state that beginning with Quality International in 1981, most hotel companies have developed many brands concentrating on different markets. Thus, I think the reasoning for this assumption is sound and logical. Nowadays there are numerous brands existed in the hotel industry, such as Accor, Marriott, and Hilton. The existence of numerous brands indicates that hotel industry has accepted the importance of the branding in marketing strategy. In line with Dev et al. (2009) and the authors, Bailey & Ball (2006) state that hotel industry has adopted branding, the branding has become a “powerful force” in marketing. Thus, I agree with authors on this assumption.

Through combines companies try to enter into new sectors (levels) of hotels. Mergers and acquisitions are the best means of growth. This could be due to the following reasons: