Strategic Management case study in the Hotel industry

2113 Words Jan 23rd, 2006 9 Pages

Having experienced the SARS, July 7th, 2005 terrorist attack, and the Bird Flu, which have slowed down the UK economy and had an adverse effect on the hotel industry, there are now clear signs of recovery. This report will first examine the UK hotel market, discuss the major industry players and demonstrate the relative importance of key issues. Furthermore, it will explore the UK consumer trends, present the diversity of backgrounds of investors and provide a future outlook along with a forecast which has been developed to illustrate the industry and the factors affecting its development and future. In conclusion, it will comment on short-term and long-term investment as well as recommending an outcome for the investor.

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Migrant workers - As more countries joint the EU, workers from the new countries could help ease staff shortages.


Olympic - London has won the competition to host the 2012 Olympic Games, which will boost tourism revenues owing to increased visitor numbers. London hoteliers have agreed to provide 40,000 affordable rooms for London 2012.

Euro - Following the government indecision on the Euro, hotels are split on their opinions or joining the single currency, 52% of hoteliers were against adopting Euro.

Interest Rates - were at a 40-year low during 2003; however, the Bank of England has slowly increased the rates in order to curb high levels of consumer debt. In May 2004 interest rates rose to 4.25%, the third rise over the last seven months.


The domestic holiday market - The rate has increased in 2003 and 2004, due to apprehensions about traveling abroad during the Iraq War and the natural disasters. Growth in total expenditure has continued to rise by 16% between 2000 and 2004 but basically only in nominal (not adjusted for inflation) terms. (Detail to see Appendix1-Domestic holidays and expenditure by UK residents, 2000-05)

Significant growth in key socio-economic groups - There has been a significant shift over the last few years towards the higher socio-economic groups, suggesting a better-educated and more affluent population, already backed up by rising levels of disposable income which is an
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