Current Picture In Hospitality Industry Tourism Essay Example

is uncertain whether the provincial hotel market has reached its lowest point or if challenging trading conditions still lie ahead.

The primary goal of hospitality is to establish a relationship or facilitate the exchange of goods and services between hosts and guests (Lashley and Morrison, 2000:19). Demand for corporate business meetings greatly influences the hotel industry. Governments, particularly in London, are increasingly focused on attracting business travelers as it has become an international business hub. It should be noted that one business tourist contributes three times more in terms of employment and economic impact compared to leisure tourists, bringing in approximately ?3.2 billion exclusively in London.

Face-to-face meetings are considered more crucial than conducting transactions through intermediaries due to significant growth seen in the business meetings industry. The United Kingdom, especially London, has experienced substantial growth in industrial trips over the past decade (Source: Lashley and Morrison).According to the Meeting Industry Association (MIA), conferences in the UK have experienced significant growth since 2004. London has seen a 60% increase in business tourism, while Birmingham and Manchester have both seen increases of 30% and 27% respectively. However, MIA reports that London is struggling to attract clients due to inadequate facilities, which has a negative impact on the overall UK economy. To address this issue, it is crucial to build event/meeting venues like an International Conference Centre (ICC) in London. Investing in business tourism can benefit the entire UK economy by bringing in various types of business opportunities and boosting economic growth. Additionally, business clients act as ambassadors for the UK in their home countries, sharing positive experiences and creating valuable connections for future business prospects.

The demand for accessible

suites for elderly and disabled individuals in the UK is significantly lower compared to other countries due to limited availability. As a result, this group may hesitate to travel or visit the country. However, there is expected substantial growth in demand during the Olympic and Paralympic Games in 2012. This upcoming event highlights the need for specific training for individuals supporting disabled guests within the hotel industry. Furthermore, considering the location of the event also suggests a potential future increase in demand for accessible suites.
If the UK does not excel in providing excellent accessible facilities compared to other destinations, its reputation for customer service will suffer. Therefore, it is crucial to address the supply and demand of hotel suites for future success. Additionally, the 2012 Olympics places immense pressure on authorities to deliver their best following a recession. The high demand for international tourism indicates a need for specific accommodations in the future, including older and disabled individuals. Previous Olympics have attracted diverse participants from various backgrounds and countries. Taking all these factors into consideration allows anticipation of the types of demands that the United Kingdom will face going forward. Furthermore, special accommodations are expected not only for regular guests but also male athletes.

Emerging and future trends of budget hotels

The emergence and growth of budget hotels like Travel Lodge and Park Inn have negatively impacted 3-star service hotels such as Thistle and Marriott. In the short- to medium-term, there may be a blurring of the distinction between hotel scaling and quality/service provision for some buyers in the budget segment of the market. These smaller hotels with their lower prices and good service are increasing demand

for hotel suites among both international clients and local clients who prefer cheaper rates in advance.The demand for hotel suites is affected by international competition. London ranks second in Europe for occupancy rate, behind Amsterdam, compared to other cities like Paris, Geneva, Berlin, and Amsterdam. Despite having a strong occupancy rate, London has reduced its average room rate by 3.5%. Some areas in the UK have seen significant increases in hotel occupancy rates from 2.9% to 60.6%. As a result, it is projected that revenue per available room (revPAR) growth will only increase by 5.3% this year due to a slowdown in revenue growth expectations - deviating just one percentage point from previous forecasts. The model predicts double-digit growth of 10.4% specifically for London.
Find the demand curve for the hospitality industry at this link: hypertext transfer protocol: //www.deloitte.com/view/en_GB/uk/industries/thl/cfd5e130a6f39210VgnVCM200000bb42f00aRCRD.htm.
D1 represents peak tenancy rate while D2 and D3 show fluctuations based on demand patterns. The current situation in a specific region influences hotel demand. It is expected that the upcoming Olympics games in 2012 will increase tenancy rates in the UK as shown by D3 on the demand curve chart provided via the hyperlink above. Compared to other European countries, tourist numbers have significantly grown in the UK, especially in London where tenancy rates are at their highest levelThe entire demand curve for hotels and hospitality services can be shifted by changes in demand conditions in Europe or globally (source: tutor2u.net). Strategies for improving guest experiences in hospitality administration are discussed on that website. Despite economic downturns, there is always room for improvement within the industry's guest experience. Investing in enhancing guest experiences during challenging times,

such as volcanic eruptions or small disasters, can be valuable as it fosters loyalty and strengthens relationships when spending patterns stabilize. When considering competition and differentiation, clients take into account factors like service, price, and where to invest their time and money. Therefore, effective strategies must be implemented by hospitality administrations to gain a competitive advantage. Suitable approaches for these administrations are Michael Porter's generic strategies from his book "Competitive Advantage: Creating and Sustaining Superior Performance" (1985), which include "Cost Leadership" (offering no frills), "Differentiation" (providing unique and desirable products/services), and "Focus" (specializing in a niche market).Porter further categorizes the Focus strategy into two types: "Cost Focus" and "Differentiation Focus". The main objective of the cost leadership strategy is to achieve a competitive advantage by reducing costs. This can be done by either increasing profits through industry-average prices or gaining market share by charging lower prices. The focus is on maintaining the lowest per unit cost compared to competitors, which may result in lower net income but still has the potential to be higher than rivals. Despite being the lowest-cost option among some competitors, certain businesses can benefit from pricing power and generate higher profits. The success of this approach depends on factors such as market structure and competition within the same market segment. It is seen as a defensible strategy that protects against pressures from customers and suppliers that other competitors may not withstand.

To attain a low-cost position, various skills are required, including significant capital investment in new technology, ongoing investment for maintaining the cost advantage, process innovation, labor cost monitoring, and strict overhead control. Once a low-cost position is achieved, it allows for

high profit margins that can be reinvested in new projects and modern facilities to sustain the cost leadership position. Reinvestment may be necessary to maintain this low-cost status.

Premiere Inn and Travel Lodge are hotels known for attracting international clients who seek affordable accommodations.These hotels aim to attract a specific segment of the market by offering lower prices compared to larger hotels. Similarly, Ryanair and Easyjet are airlines that focus on providing affordable travel options within Europe. Their approach of cost leadership distinguishes them as the only airlines with significantly low airfares. Differentiation is crucial in order to create unique products or services that customers highly value. This can be accomplished through building a strong brand image, incorporating new technology, or designing products in a different way. Successful differentiation leads to above-average returns within an industry and establishes a distinct position against competitors. It also fosters brand loyalty while maintaining competitive prices, helping to counteract competitive rivalry. Furthermore, it creates barriers for entry by increasing client loyalty and demand, making it harder for competitors to overcome this uniqueness. Additionally, it generates high profits when dealing with supplier power and reduces buyer power due to limited choices or options and reduced price sensitivity. Ultimately, organizations strive to stand out from their competitors and cultivate stronger client loyalty. To achieve this goal, companies need robust marketing skills, creativity, and effective collaboration with distribution channels. They should also recruit highly skilled customer service representatives while focusing on unique tastes, applied research & development (R&D), and a salary structure that prioritizes motivation. McDonald's sets itself apart through its globally famous Big Mac and Ronald McDonald charactersSubway stands out by promoting

"Freshly made sandwiches" as their unique selling point. Each brand utilizes different methods to create its own market image. For example, McDonald's uses catchy slogans like "I'm lovin' it" to differentiate its products. EAT sets itself apart by promoting environmentally friendly merchandise and using 100% recycled paper.

Companies may also adopt a focus or niche strategy by targeting specific groups, market segments, or geographical markets. The London Hilton, for instance, distinguishes itself through the Galvin at Windows restaurant on the 28th floor of its Park Lane location.

To build strong brand loyalty and deter competitors, these companies develop unique, low-cost, or well-defined products that cater to specific customer needs. Choosing between cost leadership or differentiation as the primary approach within a focus strategy is crucial because solely focusing on one aspect is usually not sufficient.

Both low cost and differentiation strategies aim to achieve industry-wide objectives; however, the focus strategy primarily revolves around effectively serving a specific target market. Every functional policy is developed with this goal in mind - serving their narrow strategic target better than competitors who have a broader scope of competition.

This achievement of differentiation can be attained by meeting the specific needs of the target market or providing lower costs in serving this market, or both.The focus strategy ensures a secure position in a narrow market target, although it may not achieve overall low cost or differentiation on a market level. When utilizing the Cost Leadership Focus or Differentiation Focus approach, the primary goal should be to generate profit from a smaller investment and attract customers from various areas by adding value to service a specific segment of the market.

Image Differentiation Strategy

Kotler

states that an organization can gain a competitive advantage by distinguishing itself through different means such as product differentiation, service differentiation, channel differentiation, people differentiation, or image differentiation. It is crucial to choose the most efficient form of differentiation considering associated costs. When selecting image as a differentiating factor, factors like conveying unique benefits and position should be considered. Developing a strong image requires creativity and hard work. McDonald's management takes pride in creatively setting themselves apart from their competitors through various strategies. They differentiate themselves by highlighting the superior quality of their products due to special care given to their own farm and cows. This includes using high-quality seeds on their farm and providing comfort to cows in specially designed cowbarns. Such differentiation appeals to vegetarian lovers, animal lovers, and those transitioning to organic products.The importance of Porter's generic strategies in selecting appropriate approaches is shown by these strategies. It should be noted that the niche scheme may not be suitable for expensive luxury properties, as targeting a very small segment alone is not feasible for luxury groups. A study conducted by London's city manager suggests that the hospitality industry should prioritize strategies like product distinction, image distinction, and cost leadership. This study has greatly aided me in identifying future hotel demand.