Hyatt Regency Paper

8223 Words Mar 21st, 2011 33 Pages
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Analysis of Corporate and Business Strategies

Executive Summary

The following report will describe an overview of the current environment and how it is affecting the hotel industry, and then will be preceded by a corporate level and business level strategy analysis. The company that will be the subject of the paper will be Hyatt Global Corporation, and its brand, Hyatt Regency.

In the PESTE (Political, Economic, Socio-Cultural, Technological, Ecological) analysis the group discovered many circumstances that are currently affecting the hotel industry. The threat of terrorism, the financial crisis, the evolution of travelers, the development of technological advances, and the effects of global warming and natural disasters
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(France’s public deficit= 8% of its GDP, USA=9.9% /References 3 & 4). The welfare systems are being strained and this creates a climate of fear. A recent example would be the reform of the retirement pensions in France and Greece, which both led to major strikes.

However, while governments are trying to cut down on expenses, they are also trying to increase their revenues through taxes. Barack Obama for instance proposes $989 billion in new taxes over the course of the next 10 years, and most of these taxes are directly related to individuals (Reference 5). Therefore, this will seriously affect the buying power of consumers, and we can expect consequences in the hospitality industry.

Another major political trend which is emerging notably, because of the unhappy electorates, is a movement towards extremism from most political parties, who are trying to satisfy people who are still afraid of the economic recession, the outsourcing of jobs or the terrorist threat for example. The success of the extreme right wing in Sweden recently is a good illustration of this phenomenon.

Economic Analysis

From studying the economic growth we can see that the general trend changed from an increase of 3.1% for OCDE countries in 2006, to 2.7% in 2007, which followed with a drop in 2008, and with the recession proceeded with a percentage of 0.3% in 2009 (-3.4%)(Reference 6).

This drastic decrease was a result of the subprime crisis, which impacted the current
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