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March 2nd, 2011
strama paper
strama paper treaders hotel manilaI. EXECUTIVE SUMMARY
With continues growth of the hotel industry in the Philippines, there are no doubt at the growing demand of travel and tourism in the country. People awareness has increased due to the campaign being done by the different channels of the industry, specifically, the department of tourism, airlines and hotels.
Traders Hotel is located on Roxas Boulevard and overlooking picturesque Manila Bay, Traders Hotel is the ideal place to see the best that Manila has offer. It is under their main brand Shangri-La hotels that are very much known for the number of prestigious hotels locally even internationally.
An assessment of the company’s external and internal environment reveals that it still needs to pursue on continuous development of facilities and services, develop good advertising campaign and powerful promotions, explore areas of concentration and recruit faculty that will best help in developing the company. The rest of the paper would explain the stated findings in detail. A presentation and discussion of the various frameworks and tools of analysis were also included.
II. INDUSTRY ANALYSIS
· Economic Forces
Based on the preliminary results of the 2006 Census of Philippine Business and Industry conducted nationwide, with 2006 as the reference year, the Philippines Gross revenue earned in 2006 for hotels and restaurants sector reached Php93.5 billion. Hotels, camping sites and other provisions of short-stay accommodation generated only Php34.2 billion (36.6%). Cost for operating the industry summed up to 69.2 billion. hotels, camping sites and other provisions of short-stay accommodation with almost Php24.1 billion. Revenue-cost ratio, the revenue generated per P1 cost, amounted to Php1.35. Among industries, hotels, camping sites and other provisions of short-stay accommodation recorded the highest indicating Php1.42 revenue per P1 cost. Value added was estimated at Php31.4 billion. Hotels, camping sites and other provisions of short-stay accommodation had a total value added of Php14.9 or 47.4 percent.
Based on the preliminary results of the 2006 Census of Philippine Business and Industry conducted nationwide, with 2006 as the reference year, the Philippines had a total of 2,750 establishments with average total employment (ATE) of 20 and over engaged in hotels and restaurants. Hotels, camping sites and other provisions of short-stay accommodation recorded the remaining number of establishments with only 492.
On the regional level, National Capital Region (NCR) had the most number of establishments with 1,328 (48.3%). CALABARZON (Region IV-A) placed second with 332 establishments while Central Luzon (Region III) followed with 8.8 percent of the total. Autonomous Region in Muslim Mindanao (ARMM) had the least with only 4 establishments (0.1 %).
Employees of hotels, camping sites and other provisions of short-stay accommodation were the most productive in 2006 in terms of revenue employee with a Php877 thousand per employment, 32.9 percent higher than the national average of Php660 thousand. Value added per total employment, another measure of labor productivity, was valued at an average of Php222 thousand per employee. Among industries, hotels, camping sites and other provisions of short-stay accommodation had the highest average of Php382 thousand. Gross additions to fixed assets in 2006 totaled to Php10.1 billion with hotels, camping sites and other provisions of short-stay accommodation recording the highest amount of Php8.0 billion (79.7%).
Demand for the hotel sub-sector services particularly that of accommodations, peak in the months of November, December and January. Foreign visitor arrivals are at its highest in the last and first months of the year, accounting, on the average, for 18% of the total. Peak season for balikbayan arrivals, on the other hand, is during the months of November and December, accounting for 36% of the total.
International deployment of hotel and restaurant workers and professionals, on the other hand, are subject to laws pertaining to the practice of their profession. Indeed, most countries have policies preventing foreign professionals from practicing their profession in the domestic market. In the last five years, hotel and restaurant related workers and professional deployment averaged more than six thousand seven hundred forty per year. An estimated 75% of all hotel and restaurant professionals deployed during the period were cooks, waiters, bartenders and other related workers. Filipino hotel and restaurant workers and professionals are known for their competence, trainability, and ease in adapting to different environments and are, therefore, in demand in the international market. Most hotel and restaurant related workers and professionals during the five-year period were deployed to United Arab Emirates, Saudi Arabia, Kuwait, Papua New Guinea, Singapore, Malaysia, and the United States.
In terms of length of stay, however, guests stay longer in standard hotels than in the higher-rated establishments. Standard hotel guests stay an average of 3.03 nights compared to the 2.66 nights and 2.13 nights average stay in deluxe and first class hotels, respectively. Hotel entry barriers, which include economies of scale, infrastructure, and product differentiation, are significant particularly for those who will venture in deluxe or first class operations.
While there are already quite a number of players in the market, the hotel industry can be characterized by still a rigid competitive structure. Hotels sell more or less the same service but differ in quality and style. The better and wider the service, the higher the rates. No single hotel, however, monopolizes the market or has power over the rates of rooms or of other services that are offered. Further differentiation is reflected on the variety of restaurants and coffee shops that they have and on other amenities that they offer – each catering to a specific need of clients.
· Social, Cultural, Demographic and Environmental Forces
Friendly by nature, Filipinos have a special way of making strangers feel welcome. Hospitality in the Philippines is both a tradition and an art. Moreover, among Asians, Filipinos are the most fluent in written and spoken English. Since English is the world’s universal business language, tourists and business travelers alike are always pleasantly surprised at the absence of any language barrier in their dealings with Filipino hotel and restaurant workers.
Opportunities for hoteliers also arise from the country’s strategic location. The Philippines is situated in the center of Asia, home of the fastest-growing economies in the world. The archipelago lies southeast of Hong Kong, northeast of Singapore and almost directly north of Kota Kinabalu in Malaysia and Bali, Indonesia. Owing to its accessibility and strategic location, the Philippines is a natural Mecca of commerce.
During the last decade, the hotel and restaurant industry has flourished even as it struggled to cope with difficult challenges. New hotels mushroomed in the capital while older hotels have done their best to spruce-up both their interiors and upgrade services. Hotels are the most popular source of accommodation among foreign travelers. In the past five years, more than 50% of foreign tourists used hotels for lodging purposes.
Indeed, global travel is expected to grow rapidly for at least the next 20 years. Worldwide arrivals were expected to expand from 613 million in 1997 to an estimated 700 million in 2000, 1 billion by 2010 and 1.6 billion by 2020.
The Department of Tourism (DoT) recently organized a forum on zero waste management for hotels and resorts, in coordination with the Global Alliance for Incinerator Alternatives (GAIA) and Greenpeace International.
Hotel chains constitute a classic application of brand strategy. Brands are a quick way for hotels and hotel chains to identify and differentiate themselves in the minds of the customers. A brand symbolizes the essence of the customer’s perceptions of hotel chains, its products, and services. The favorable or unfavorable attitudes and perceptions formed by brand influence a customer’s hotel preference. Unfavorable attitudes and perceptions formed by brand influence a customer’s hotel preference.
As foreign tourists are not very price sensitive, they are usually after the amenities and service that they need during their hectic travel. Hotels that cater to the tourist market compete mostly in the area of amenities and services. During specific seasons of the year, hotels offer weekend and/or holiday packages (generally includes discounted accommodations and meals). These packages are also offered to specific market segments – wedding parties, honeymooners, and balikbayans.
· Political, Governmental and Legal Forces
Government, industry association and trade union cooperation provides the industry with a strong support system. The Philippine government actively promotes the country through its numerous tourism programs.
Government effort is complemented by the strong support of industry associations and trade unions (i.e., Hotel and Restaurant Association of the Philippines and the National Union of Workers in the Hotel Restaurant & Allied Industries), which enable the hotel industry, among other things, to undertake programs and projects that upgrade and professionalize the sector and to influence government regulatory policies/laws/rules affecting the industry.
There are Laws that hinder or facilitate the hotel and restaurant industry includeExecutive Order 219 the domestic and international civil aviation liberalization policy, the Investment Priorities Plan (IPP) 2000,Intellectual Property Rights, and the Labor Code provisions on the employment of foreign nationals.Provisions of EO 219 opened the domestic airline industry market to competition, which resulted in the expansion of airline seat capacity,reduced airfare and the elimination of the so-called “missionary routes”. Combined, EO 219 led to a significant increase in tourism, thus expanding on of the hotel and restaurant industry’s main market. The IPP 2000 offers fiscal incentives to investors in, among others, the tourism industry (i.e., tourist accommodation facilities, which refer to hotel, apartelle, tourist inns, pension house, and resorts, tourism estates, tourist buses,and restoration of historical and cultural sites/properties). All franchise agreements with foreign franchisors are registered with Intellectual Property Rights office as well as licensing, technical assistance and services, technology transfer and distribution agreements. Foreign franchisors in the Philippines, similar to other industries, are subject to the restrictions on ownership, 40%. The laws on technology transfer, however, guarantee franchisors in the Philippines royalties of 5% and a maximum allowable term of technology transfer arrangements of ten years.
Finally, foreign national employment in the hotel and restaurant industry is subject to the tripartite agreement signed in 1992 by the Department of Tourism, Department of Labor and Employment and the Bureau of Immigration. The agreement addresses the following issues regarding the employment of foreign nationals in the hotel and restaurant industry: positions open to foreign nationals in the hotel and
restaurant industry: positions open to foreign nationals, procedures in the issuance of visa/permits, and disciplinary/penal provisions.
The presence of external support systems can enhance an industry’s competitive advantage. Factor conditions (i.e., cost of capital, labor and raw materials), for example, are affected through subsidies, policies toward the capital markets, policies toward education, and the like. External support systems can also help stimulate local demand conditions, establish local product standards or regulations and programs that mandate or influence buyers’ needs.
The local hotel and restaurant industry external support systems include government agencies, industry associations and trade unions. Government agencies and various consultative bodies, which includes but is not limited to the Department of Tourism, Department of Trade and Industry, Department of Labor and Employment, and the Hotel and Restaurant Tripartite Consultative Body, Inc., work together to promote the tourism and hotel and restaurant industries through specifically designed laws, policies and programs that promote industry growth and industrial peace, safeguard labor rights, provide training and seminars, and ensure consumer safety. Programs specifically designed to attract more tourists and therefore expand the hotel and restaurant industry’s market, for example, is the DOT’s Tourism Master Plan.
The Tourism Master Plan (TMP) is the framework and guide of the Department of Tourism for the sustained development and expansion of the tourism industry of the Philippines. Completed in 1991, it serves as the blueprint for tourism development in the country until the year 2010. The Plan was prepared by the Hoff and Overgaard on behalf of the World Tourism Organization (WTO), United Nations Development Program (UNDP) and the DOT. Its aim is to position the Philippines as a leading tourist destination in Asia.
Industry associations, on the other hand, enable the hotel and restaurant sector, among other things, to undertake programs and projects that upgrade and professionalize the sector (i.e., training and seminars for employees and industry promotion by sponsoring domestic and international exhibits) and to influence government regulatory policies/laws/rules affecting the industry.
Finally, trade unions in the hotel and restaurant industry, among other things, safeguard the rights and welfare of industry workers and professionals. They work closely with government and industry participants in improving working conditions and employee performance (i.e., recommending additional training and or certification) and in defending employee rights.
· Technological Forces
Most local hotels are quick to respond to changes in technology. To date, most have computerized bookings, reservations, room service, and accounting systems. Pressure on hotel prices comes from the drive “for value for money”. Increased operating efficiency obtained through the computerization has helped to reduce costly waste in the supply chain. However, higher labor, raw materials, and utility costs continue to push operating costs up.
Philippine hotels, though quite late in technology adoption, own a mix of information technologies that appear to slant towards improving guest service. The intrinsic characteristics of technology seem to be the main factor in the decision to adopt technology while IT illiteracy and the prohibitive cost are the main reasons for non-adoption. The research likewise affirmed that ownership structure and firm size positively affect adoption behavior. The results manifest organizational rationalism and recognize the power of social and cultural forces to shape IT adoption behavior. Possible implications were raised regarding strategies that address IT literacy and cost, and enhancing absorptive capacity of small hotels.Hospitality - specific studies on adoption of IT are widely varied. There are five areas of IT adoption in hotels. These are (1) reservation system, (2) property management systems, (3) ancillary systems that include electronic door-lock system, energy management system, in-room entertainment systems, internet access, telephone and call accounting system, (4) catering information systems composed of recipe-costing system, stock-control system, conference and banqueting system, electronic POS, and (5) back-office system comprised of accounting systems, payroll system, human resource system, sales and marketing system.
There are various reasons why hotels adopt information technology. IT offers advantages in terms of providing service quality, improved administrative processes and competitive edge in cost or differentiation.
Wifi technology affects a lot on hotels in the Philippines nowadays. Guest is seeking for Wifi installed rooms that is already equipped on their hotel amenities.
Guests nowadays would prefer to stay in hotels that can offer more than the usual amenities. Even wired internet access, traditional voice services and cable television are not enough.
Here are some technological systems that greatly affect the hotel industry in the Philippines:
Wireless Fidelity - It provides your guests with Internet access using wireless technology in the rooms and in any other common area. We will even provide computer units for your business center for guests who do not have laptops.
Voice over internet protocol - It allows your guests to make cheaper International calls using Internet Protocol technology. We will integrate the service into your PABX to allow calls to be made from existing handsets provided in the rooms.
Internet Protocol Television - It gives your guests true digital viewing pleasure and a selection of movies to watch on-demand. The content will be delivered over our network and will be viewed on the television sets provided in the rooms.
Closed Circuit Television
1. IP-based surveillance and alarm systems
2. Wired and Wireless options
3. Digital Recording for easy search and playback
4. Capable of remote monitoring
Hotel Management System
1. Windows-based and LAN-ready
2. Package includes standard and optional modules:
1. Front Desk
2. Reservations
3. Point of Sales
4. Call Logging
III. INTERNAL ASSESSMENT
a. Company Vision and Mission
· Vision
To be the first choice for guests, colleagues, shareholders and business partners.
· Mission Statement
We envision a community of responsible and educated citizens who are environmentally conscious, practice social responsibility in their daily lives and inspire others to do the same.
We commit to operating in an economically, socially and environmentally responsible manner whilst balancing the interests of diverse stakeholders.
We strive to be a leader in corporate citizenship and sustainable development, caring for our employees and customers, seeking to enrich the quality of life for the communities in which we do business, and serving as good stewards of society and the environment.
b. Company Corporate Social Responsibility Our daily operations ensure that we mitigate the impact of climate change, uphold biodiversity in conservation/habitat restoration, adopt the best practices in preventing ozone depletion, and continually strive to improve water-use management, waste-disposal management and indoor air quality.
We are committed to protecting our customers, employees, stakeholders and the greater public by providing a safe and healthy environment based on international standards.
We value our stakeholders and always engage them with clarity, honesty, and respect. We require that our business partners ensure the highest standards in environmental, hygiene and labor practices. · Embrace We believe that caring for others today allows them to care for themselves and others tomorrow. ‘Embrace’ aims to build, strengthen and sustain local communities through various and specific education and health projects. Each of our resorts provides a natural habitat for flourishing biodiversity. The ‘sanctuary’ is Shangri-La’s project for ensuring the highest standards in marine and terrestrial habitat restoration and environmental conservation. c. Brand Structure · Corporate Officers and Directors Mr. Rao, Madhu Mr. Dogan, Greg Mr. Zhu, Kent Mr. Offe, Jean Michel Ms. Cheah, Caroline Mr. Sekercioglu, Cetin Mr. Nessmann, Lothar Mr. Bormes, Robert Mr. Cottan, Michael Mr. Haechler, Bernhard Mr. Douin, Thierry Mr. Flecker, Wolf-Dieter Mr. Gearing, Darren Mr. Paw, Sunny Ms. Pang, Barbara Ms. Angeles, Peggy Ms. Chen, Sarah Mr. Frost, Austin Mr. Windle, Brian Ms. Cheng, Charlene Mr. Liu, David Mr. Inns, Brendan Mr. Rao, Anand Mr. Leung, Vincent Mr. Sachdev, Navjyot Mr. Yuen, Andree Vice President - Finance Ms. Ng, June Mr. Lui, Ben Mr. Leung, Peter Mr. Chu, Nelson Mr. Lee, Harold Ms. Wong, Carrie e. Organizational Chart Chairman of the Board Vice Chairman Chief Executive Officer Chief Information Officer Chief Operating Officer Company Secretary Executive Director Group Director of Engineering Group Director of Planning and Design Group Director of Projects Group Director of Rooms Group Director, Food & Beverage Group Director, Human Resources Group Director, Sales & Marketing Vice President Brand Communications Vice President Finance f. Hotel rooms and Offerings Guests of Traders Hotel Manila will not only enjoy a range of facilities but also an exceptional level of service that Shangri-La is renowned for. It is this combination of factors that makes the hotel an ideal choice when compared to other Manila Philippines hotels. Hotel Lobby Superior Room Superior City View Rooms offer contemporary décor, comfort, and a full array of amenities that make your stay productive and peaceful. All superior rooms have full-length windows that offer a view of vibrant Roxas Boulevard. Complimentary broadband Internet access, in-room safe, satellite TV, coffee/tea making facilities, and a comfortable working chair and writing desk are standard in all Superior Rooms. The room dimension is 36 sqm/387 sqft. Deluxe Room Guests may choose between sea view rooms which are overlooking Manila Bay and the yacht club or city view rooms that offer the view of Roxas Boulevard’s spanning Manila’s cityscape. Each Deluxe Room is warmly decorated with comfortable chairs and writing desk with ample supply of stationery. Dual line telephones (with dataport connection), complimentary broadband Internet Deluxe Suite Room Each Deluxe Suite contains a spacious and comfortable parlour separate from the bedroom, along with a walk-in-closet. Bathrooms include separate shower and bathtub areas, with a rainforest showerhead. Dual Internet access, in-room safe, flat screen television set and DVD/CD player and elegant writing desks.line telephones (with data port connection), complimentary broadband Deluxe Suite Parlor Lobby Lounge The Lobby Lounge is ideal for cocktails and listening to live entertainment. Genuine Japanese cuisine is served at Kikufuji Restaurant. Latitude The hotel’s Latitude restaurant offers international cuisine and a la carte menus that originate from the five different countries found in the same latitude as Traders which is 14.35 ° N 121° E. These countries are Philippines, Guatemala, Mexico, South Africa and Thailand, U. S. steaks are also offered. Swimming Pool Embassy Ballroom The Embassy Ballroom can hold up to 500 guests. Seven other function rooms, audio-visual-equipment and wireless internet access are also made available upon request. Embassy Ballroom- Conference Set-up Ambassador Sala Health Club Club Rooms Club Rooms are 36 sqm, located on the 17th to 19th floors. They are fitted with a king size bed or 2 single beds. Bathrooms have a bathtub with an overhead shower. Guests have the extra Traders Club benefits and facilities: All-day non-alcoholic beverage service, daily breakfast, afternoon tea, and sunset cocktails at the Traders Club Lounge. Broadband internet access, Dual line telephones (with dataport connection), in-room safe, 29 inch interactive satellite TV, coffee/tea making facilities and comfortable writing desks are standard in all Club Traders Rooms. Other Facilities: · Restaurants · Spa · Massage · Steam room and Jacuzzi · Children’s pool · Outdoor jogging track · Cruise (near ferry terminal) · Airport Transfer · Baby Sitting / Child Care · Business Centre · Car Rental Service · Complimentary Shoeshine Service · Conference Facilities · Delicatessen · Express Check-in and Check-out · Facilities for the Physically Challenged · Foreign Exchange Counter · Hair / Beauty Salon · In-Room Dining · Laundry & Valet Service · Non-smoking Room · Parking Facilities · Photo Processing Service · Postal / Courier Service · Taxi & Limousine Service · Travel Agency / Tour Desk g. Internal Factor Evaluation (IFE) Matrix KEY INTERNAL FACTORS WEIGHT RATING WEIGHTED SCORE Internal strengths 1. Exceptional Level of Service .30 4 .80 2. High standard Facilities .25 4 .80 3. Superb Sea View .10 3 .30 4. Wide range of exclusive privileges .15 3 .45 Internal Weaknesses 1. Brand Awareness .10 2 .20 2. Customer loyalty .10 1 .10 TOTAL 1.00 2.65 Internal Factor Evaluation Analysis: Internal Factor Evaluation (IFE) Matrix determines the strengths and weaknesses of Traders Hotel. The High standard Facilities weighted most important strength of the company. Having the score of 2.65, the company is responding in an above average way to existing strengths and weaknesses in the industry. IV. EXTERNAL ASSESSMENT a. Market Position
b. Market Competitors · Manila Hotel The Manila Hotel is a 500-room,five starhotel in Manila, Philippines, located in the heart of the Manila Bay area. The Manila Hotel is the oldest premiere hotel in the Philippines, built in 1909 to rival Malacañang Palace, where the Philippine president now lives, and opened in 1912. It was built on 3.5 hectares (376,736.9 sq ft) of land along Roxas Boulevard. It was the residence of General Douglas MacArthur from 1935 to 1941. The main lobby was designed for sitting as well as for making grand entrances. Measuring 125 feet (38 m) long by 25 feet (7.6 m) wide, the lobby is lined with white Doric columns. The floor is Philippine marble, the chandeliers are made of brass, crystal and seashells, the furniture is carved out of Philippine mahogany which is used throughout the hotel. The rooms provide exceptional views of the city, especially the gardens of Rizal Park and Intramuros. Manila Hotel is the first hotel in the Philippines to offer HBO among other television network systems for all rooms. All rooms make use of the Ving Card electronic card system for maximum security. The 570 fully renovated rooms that reflect the hotel’s storied past blend with the conveniences of a modern luxury hotel. Other amenities include traditional decor with elegant furnishings, individually controlled central air conditioning, remote-control TV with cable channels, mini bars, separate bath and toilet with extension phone, and secure in-room safes. The three-bedroom MacArthur suite rents for $650 a night. The penthouse, the most expensive suite (with a private swimming pool) on the 18th floor, has a view of the Bay, of Rizal Park and the 16th-century ruins of the Spanish walled city of Intramuros, opposite the hotel. Like the Presidential Suite, which costs $900 a night, the $1,200-a-night penthouse is decorated with rare paintings, Asian antiques and Filipino crafts. The MacArthur, Presidential and Penthouse Suites provide 24-hour butler service. The hotel’s guest facilities and other services include limousine and luxury car rental, a helipad on the roof deck, airport transfer and transport assistance, medical and dental clinic, a business center with Internet access, 24-hour full menu room service, a delicatessen, a barber shop and beauty salon, a florist, laundry service, a post office, an in-house shopping mall, and arrangement of sightseeing tours. The Bay Club, Manila Hotel’s sports and health club, features a jacuzzi, two tennis courts, and one squash court. Guests also have access to a gym, a sauna, swimming pool with a wet bar, a game room, and an indoor golf simulator. Other health club services include a whirlpool, wet sauna, steam box, martial arts, swimming, massages, and tennis lessons. · Sofitel Sofitel Philippine Plaza is a unique luxury hotel in Manila with a resort setting next to the largest convention center and close to theaters, museums, government offices and the Mall of Asia. 5-star accommodation includes 609 rooms and suites boastingof balconies and spectacular views of Manila Bay sunsets. Flagship restaurant Spiral is the dining favorite in the metro, Sunset Bar has nightly cultural shows, 7Pecados features live bands and LeBar offers bistro-lounge-patisserie service. Lagoon swimming pool, tropical gardens in 12-acres with aqua golf, mini golf, tennis and petanque courts and jogging trail. LeSpa at Sofitel and SoFit center open 24 hours. Playground and indoor Kids Club for superb recreation and sports activities. c. Porter’s Model New Entrants · Carlson Hotels –Manila Bay · Hotel H2o – Manila Bay Competitors Manila Hotel – Manila Bay Hotel Sofitel – Manila Substitute 1. Inn 2. Motels 3. Apartelle Suppliers · Security Agency · Maintenance · Laundry · Toiletries · Furniture Target Market Tourists (Local and Foreign) Class A , B & upper C (professional, elite, high and moderate income) Event organizers (wedding Planners) d. External Factor Evaluation (EFE) Matrix KEY EXTERNAL FACTORS WEIGHT RATING WEIGHTED OPPORTUNITIES 1. Increase in income .35 3 1.05 2. Internet Users .20 4 .8 3. Economic Crisis 16 4 .6 THREATS 4.Fluctuations in international and domestic tourist arrivals .10 4 .4 5. Population below poverty line .07 3 .21 6.Growth of existing competitors .13 4 .52 TOTAL 1.0 3.58 Legend: Weight: 0.0- not important 1.0- important Rating: 4 – major strength 3 – minor strength 2 – minor weakness 1 – major weakness External Factor Evaluation Analysis: The External Factor Evaluation Matrix is used for the assessment of the current business conditions to visualize and prioritize the opportunities and threats affecting Traders Hotel. The weight gives the value of the factors while rating indicates how effective Traders Hotel’s current strategies respond to these factors. Weights are industry-specific while ratings are company specific. The most critical and important among the factors listed is the increase in income. This factor was a weight of .35. the hotel got a weighted score of 3.58 which indicates that it is responding very effectively to the existing external opportunities and threats. e. Competitive Profile Matrix TRADERS HOTEL MANILA HOTEL HOTEL SOFITEL CRITICAL SUCCESS FACTORS WEIGHT RATING SCORE RATING SCORE RATING SCORE Promotion and Advertising .19 3 .57 4 .76 4 .76 Service Quality .27 4 1.08 4 1.08 4 1.08 Price Competitiveness .22 4 .88 3 .66 3 .66 Customer Loyalty .14 2 .28 4 .56 3 .42 Financial Position .10 3 .30 4 .4 3 .30 Market Share .08 2 .16 4 .32 3 .24 TOTAL 1.0 3.27 3.78 3.48 Legend: Weight: 0.0- not important 1.0- important Rating: 4 – major strength 2 – minor weakness 1 – major weakness 3 – minor strength Using Competitive Profile Matrix (CPM), we have identified Traders Hotel’s major competitors and particular strengths and weaknesses. Manila Hotel, Hotel Sofitel and Traders Hotel gained 3.78, 3.46 and 3.27 respectively. V. STRATEGY FORMULATION a. BCG Matrix High
Market Growth Low Market Share BCG ANALYSIS Based on the table illustrated, Manila Hotel is placed in STAR because it is defined by having high market share in a growing market. Stars are leaders in the business but still needs a lot of support for promotion and placement. Under QUESTION MARK, we placed Traders Hotel because it has growing market but have low market share. Hotel Sofitel is placed in CASH COW, because of its position of high market share in a mature market. Lastly, Sogo Hotel is placed in DOG because of its low growth market and has low market share. b. SPACE Matrix STRATEGIC POSITION AND ACTION EVALUATION (SPACE) MATRIX FS and IS = +6 (best) and +1 (worst) CA and ES = -1 (best) and -6 (worst) INTERNAL STRATEGIC POSITION FINANCIAL STRENGTHS (FS) RATING Working Capital +5 Liquidity +4 Profitability +5 Budgeting +5 Raise short term capital +4 TOTAL +23 FS average (+23/5) +4.6 COMPETITIVE ADVANTAGE (CA) RATING Market share -3 Product quality -2 Technological know how -3 Customer loyalty -2 Product life cycle -3 TOTAL -13 CA average(-13/5) -2.6 EXTERNAL STRATEGIC POSITION ENVIRONMENT STABILITY (ES) RATING Technological changes -3 Price range of competing products -2 Risk involved in business -3 Competitive pressure -3 Price elasticity demand -2 TOTAL -13 ES average (-13/5) -2.6 INDUSTRIAL STRENGTHS (IS) RATING Growth potential +5 Profit potential +5 Technological know how +4 Resource Utilization +4 Financial stability +5 TOTAL +23 IS average (23/5) +4.6 Basis/Sources: Environment strength, Financial strength, Industry strength, Industry Analysis, Questionnaire, Company profile. 6 5 4 3 2 1 -6 -5 -4 -3 -2 -1 6 5 4 3 2 1 -6 -5 -4 -3 -2 -1 IS 4.6 FS 4.6 ES -2.6 (2, 2) CA - 2.6 Traders Hotel SPACE MATRIX Analysis In the Strategic Position and Action Evaluation (SPACE) Matrix of Traders hotel, it shows that the company’s position in the market is Aggressive. This means that the company has to use its internal strength to develop market penetration and product development strategies. In market penetration financial strength is a dominating factor in the industry. The best way to achieve this is by gaining competitors’ customers. In terms of product development service are innovated for the ever changing demand of customer. The company should improve their service to increase sales. Rapid market growth c. Grand strategy Matrix Slow market growth Quadrant 1 Quadrant 2 Quadrant 3 Quadrant 4 Weak competitive position Strong competitive position GSM analysis Based on the Grand Strategy Matrix, Traders Hotel is positioned in Quandrant 4. It has a strong competitive position but are in a slow-growth industry. D. Internal-External Matrix
IE analysis: Having analyzed the IE Matrix of the company, we have seen that Traders Hotel falls under the first region or division which is cells I, II or IV can be described as grow and build. e. SWOT Analysis STRENGTHS · Exceptional level of service · High standard facilities · Superb bay view · Wide range of exclusive privileges · Company image · Competitive price · Value and affordability · Customer service · Facility maintenance WEAKNESSES · Brand awareness · Customer loyalty · Few advertisements OPPRTUNITIES · Increase income · Internet users · Economic crisis THREATS · Fluctuations in international and domestic · Population below poverty line · Growth of existing competitors SWOT EXPLANATION STRENGTH · Exceptional level of service - Being a 4 star hotel in the country, Traders Hotel’s quality of service will definitely be an assurance. Adding up is that being of it’s a subsidiary of chain of hotels of Shangri-La hotels worldwide. Word class service is a must for Traders Hotel. · High Standard Facilities - Having a world class service of Traders Hotel, high standard facilities will definitely be an edge to its leading competitors. First class furniture, appliances, etc. are expected and available in the said hotel. · Value and Affordability - One of the competitive advantages of Traders Hotel is letting their customers experience unique comfort and outstanding services with reasonable price. · Facility Maintenance - An efficient and effective management knows the value of facility maintenance for long run business operations. Hotel rooms as well as hotel facilities are well maintained by regular inspection as a monthly ritual. · Customer Service - Traders Hotel’s long existence, the hotel proved a lot. For these long years of operations and good company image, it is more than safe to say that the hotel sustains good relationship and cater excellent services to their customers. · Company Image - The hotel’s good image has been maintained and continuously improving. · Superb Bay View - An overlook of Manila Bay’s during sunrise and sunset will definitely blow your eyes away. Having this, Traders Hotel consider this as one of their competitive advantages. By this way, the hotel does not only promote the hotel itself but as well as the country’s natural beauty. · Wide ranges of exclusive privileges - Traders Hotel’s treatment to its customers is like treating a family. Saving only the best is the only focus of the hotel. Giving exclusive prinilages to its loyal customers as well as to other customers is an edge for the hotel. · Competitive Price - Being a 4 star hotel with reasonable price, truly, Traders Hotel is an assurance. The price dictates the qualitty of a product or service. But to Traders Hotel, the excellent quality of service is paralleled with a reasonable price that is not too much or overpriced compared to its competitors. WEAKNESSES · Brand Awareness - Being a subsidiary of Shangri-La chain of hotels, low brand image of Traders Hotel is developed. People tend to know other 5 and 4 stars hotels but not or not so much of Traders Hotel. · Customer Loyalty - For a hotel industry, customer loyalty is hard to gain. People wanted to try different hotels to see which the best is. Lack of advertisements and exposure to the public of Traders Hotel is one of its weaknesses. · Intensive Advertisements - The hotel may have already established itself and made it popular and known for others, but still, advertisements will make their status better for they cannot be complaisant with its status. Continuous changes in the industry should be coped up by the hotel and one of this is through intensive advertisements. OPPORTUNITIES · Increase Income - A person’s capacity of spending is based on the income. The buying power of people tends to increase and vice versa. This is an opportunity for the hotel in marketing the excellent services as well as the facilities so that people may be enticed to go with Traders Hotel. · Internet Users - In our fast faced environment, people prefer the convenience offered by the internet. With just a snap, we can buy food, clothes and even book a flight. This becomes an opportunity by exposing the hotel to the internet users as a medium of advertisement. · Economic Crisis - Economic crisis does not only mean negative. Experiencing this, people are smarter in spending their money. So instead of having purchase a 5 star or 4 star hotel room which is more expensive one, there is a tendency of shifting to a 4 star hotel room, which offers almost the same service. THREATS · Fluctuations in the international and domestic arrivals - Total dependency on foreign tourists can be risky, as there are wide fluctuations in the international tourism. Domestic tourism needs to be given equal importance and measures should be taken to promote it. · Population below poverty line - The increasing and significant number of our population that is included below poverty line is very much threatening. · Growth of existing competitors - The continuous growth of existing competitors in the industry will tighten the competition and may cause the hotel develop further the operations to maintain its status. f. Quantitative Strategic Planning Matrix (QSPM) STRATEGIC ALTERNATIVES CRITICAL SUCCESS FACTORS MARKET PENETRATION MARKET DEVELOPMENT KEY SUCCESS FACTORS WEIGHT AS TAS AS TAS OPPORTUNITIES Increase in income .35 3 1.05 4 1.40 Internet Users .20 4 .8 4 .8 Economic Crisis .16 3 .48 3 .48 THREATS Fluctuations in international and domestic tourist arrivals .10 3 .30 2 .60 Population below poverty line .07 3 .2 2 .14 Growth of existing competitors .13 4 .52 4 .52 STRENGTHS Exceptional Level of Service .30 4 1.20 4 1.20 High standard Facilities .25 4 1 4 1 Superb Sea View .10 2 .20 1 .10 Wide range of exclusive privileges .15 3 .45 2 .30 WEAKNESSES Brand Awareness .10 3 .30 3 .30 Customer loyalty .10 3 .30 3 .30 TOTAL 2.00 12.35 7.14 QSPM Analysis Based on the above matrix, the total attractiveness score of market penetration and market development is 12.35 and 7.14 respectively. The highest TAS is market penetration that would mean it is the most attractive strategy among market penetration and market development Market penetration strategy seeks to increase market share for present products or services in present markets through greater marketing efforts. This includes increasing the number of salespersons, increasing advertising expenditures, offering extensive sales promotion items, or increasing publicity efforts. Market development strategy involves introducing present products or services into new geographic areas. VI. STRATEGY RECOMMENDATION RECOMMENDED BUSINESS ORGANIZATION STRATEGIES In order to maintain and improve TRADERS HOTEL market share and competitive advantage, the following business strategies are suggested for the company to remain competitive in their industry. 1. CONTINUOUS DEVELOPMENT OF FACILITIES AND SERVICES The hotel may have well appointed accommodations and first of its class amenities and facilities but it should continuously develop its services to deliver customer’s need. One way to fulfill the promise of unique stay experience i s by showcasing modern first-class amenities and facilities that that will make and keep the customers happy and satisfied. 2. DEVELOP GOOD ADVERTISING CAMPAIGN AND POWERFUL PROMOTIONAL STRATEGIES Advertising is very important for it is the means of communicating the products and services offered by the hotel to influence and persuade people to make accommodations. The hotel should be aggressive and place TV ads, print ads and internet ads. They can be cost efficient and take advantage of the internet and its ability to pass out information. 3. EXPLORE AREAS OF CONCENTRATION The hospitality industry contains many segments, each with their own special needs. The hospitality industry includes lodging, foodservice and transportation. Trader’s hotel management may focus on lodging, but that still includes such diverse segments as hotels, beds and breakfasts, resorts, vacation ownership, gaming and spas. 4. RECRUIT FACULTY Hotel managers must be skilled in environmental management, revenue (or yield) management, leading people, investments and technology. Attend conferences such as the International Council on Hotel, Restaurant and Institutional Management (CHRIE) where you can meet dedicated hotel management faculty members and get recommendations. Recruit people with a diversity of backgrounds. VII. STRATEGY IMPLEMENTATION Our recommended action plan is to put greater emphasis on the advertising and promotions of the hotel by having ads on the magazines, newspapers, leaflets/flyers, viral marketing, and website interaction with customers through Facebook, Blogs, Multiply and Friendster. By having greater marketing efforts the hotel will be popular and it will add information to the public. It will attract more foreign and local customers that will do business or have a reservation with the hotel. Through advertising more customers are knowledgeable and can be attracted to have corporate meetings and forums, events like weddings and birthdays and tourist and locals who are looking for a vacation and relaxation. In addition to our recommendation, we would like the company to provide the registered customers with SPA, Discount Card, Covered Swimming Pool, and Sports Area, so that guest will not go out and seek for other places or business that offers such services. Also, to set special offers for special occasions like Valentine’s Day, Christmas, and Summer Vacations. Magazines the stronger the readers affiliation with the magazine as a brand, the higher the level of endorsement that the advertising receives from the magazines personality. The Magazine good for the hotel to set ads is the Good Housekeeping and Seventeen Magazine. Good Housekeeping advertising rate for 1month full page colored is Php. 391,185.00 and Seventeen Magazine for 1 month full page colred is Php. 134,000.00 with the total of Php. 525, 185.00. Newspaper is another way of advertising the hotel in the public and we choose Manila Bulletin as the broadsheet that we will put the ads. 3 col. x 5 cms = 5,292.00 (weekdays) ; 6,216.00 (sundays) it will be post for 2 months in the newspaper. The total for 2 months weekdays Php. 211, 680.00 and for 2 months on Sundays Php. 49,728.00 and the over-all total is Php. 261,400.00 Leaflets/Flyers will be distributed to major malls in manila like SM North Edsa, Trinoma, Glorietta, SM Mall of Asia and SM Mega mall. The No. of Leaflets is 100,00 (20,000 leaflets per malls) and the price per leaflets is Php. 2.50 and the total cost for leaflets is Php. 250,00.00 Viral Marketing is the kind of technique that uses pre-existing social networks to produce increases in brand awareness or to achieve other marketing objectives (such as product sales) through self-replicating viral processes. It can be word-of-mouth delivered or enhanced by the network effects of the Internet. This strategy is one of the most effective means of advertisement that will give consumers glimpse and also full information about the company. But with using this maybe some informations being spread by people are false or has negative impact to the public, so be very careful of using this as one of the advertisement. Additional recommended plan: Discount Card One way of penetrating the market for a Hotel is to offer discount cards to any client. This would help the hotel to attract and retain customers who have at least patronized their services. Especially satisfied customers because those persons would likely want to have the same experience that they had during their stay at the hotel, plus, the fact that the hotel will offer them a lower rate than before would be a great help to have loyal customers. Not to mention that this can create a ripple effect to the society. Spa Another great service that a hotel can offer to their patrons would be a spa. Relaxation is one of the main purposes that a person stays in a hotel, and a spa can help the hotel give the most relaxing service to their clients. Having this kind of services offered inside the premises of the hotel would add to the comfort and security of the customers and would increase the satisfaction of the patrons. Covered Swimming Pool Having a swimming pool inside the hotel premises is a great deal for customers because some customers, especially young individuals and those that would bring along children would be delighted to have a swimming pool to indulge themselves with plus, without the hassle of leaving the hotel premises for convenience, safety and security, and pleasure. Sports Area Another facility that a hotel can offer to its clients is a sports area, usually it can be composed of a basketball court, full or half, tennis and badminton courts. This can help the hotel attract and retain customers because sport area is great for the health and a great venue for people to meet new friends. It can serve as the place for the clients to unwind after a long day or to keep a healthy lifestyle without any burden of leaving the hotel grounds. This can add up to the satisfaction that the hotel would want to give to their patrons. Financial Implication The total expenses for the advertisement of the hotel is Php. 1,035,585.00 which will increase the expense of the firm by 10% - 30% but will possibly increase sale after the advertisement for also about 20% - 30%. VIII. CONCLUSION We therefore conclude that the strategy to be implemented on the hotel is the Market Penetration, seeking increased market share for present products or services in present markets through greater marketing offers. It includes increasing the number of sales persons, increasing advertising expenditures, offering extensive sales promotion items, or increasing publicity efforts. By increasing primarily in advertising and promotion, the hotel can provide more information to the public about their products and services offered.
Vice Chairman
President and Chief Executive Officer
Group Director of Sales and Marketing
Group Director of Food and Beverage
Group Director of Rooms
Vice President
Vice President
Vice President
Vice President
Vice President
Vice President
Vice President and Executive Director
Vice President
Vice President
Vice President - Sales and Marketing
Vice President - Sales and Marketing
Vice President - Sales and Marketing
Vice President - Sales and Marketing
Vice President - Sales and Marketing
Vice President - Sales and Marketing
Vice President - Sales and Marketing
Vice President - Brand Communications
Chief Information Officer
Vice President - Finance
Vice President - Finance
Vice President - Finance
Group Director of Human Resources
Group Director of Projects
Director of Projects
Group Director of Planning and Design
Group Director of Engineering
Director of Contracts and Quantity Surveying
February 23rd, 2011
chediebey.... ♥: strama paper-Traders Hotel Manila
I. EXECUTIVE SUMMARY
With continues growth of the hotel industry in the Philippines, there are no doubt at the growing demand of travel and tourism in the country. People awareness has increased due to the campaign being done by the different channels of the industry, specifically, the…
February 23rd, 2011
