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Check Out Our Repute Hotels Ltd. London Report Essay

Introduction

Today, the global economy appears as an indivisible global entity, which is characterized by diverse quality processes. Transnational corporations, which are the driving force of globalization phenomenon, changed separateness policy for cooperation and implementation of economic projects. In recent years, the tourism industry has been development rapidly, and has obtained the global form. In international tourism, globalization is better traced by the example of tourist accommodation sector, which is expanding rapidly through the development of hotel chains.

 
 

The hotel industry is being among the majority of the world markets that are growing fast. During the second half of the twentieth century, this area had experienced dramatic shifts, which have changed the understanding of the hotel as a place to sleep; thus, this had put the hotel segment into a leading position among the components of the tourism industry (Tar?, et al., 502). Expansion of the market of hotel services and the irreversibility of the integration processes, which increased marketing costs, have reduced product life cycles (Sloan et al.). The need for constant updating of its own product, the formation of categories of trade secrets, and know-how implementation require joint efforts of organizations and the establishment of cooperative relations in their various manifestations and forms.

This paper is aimed at examining the key issues that influence the expansion of the Repute Hotels London (UK medium-sized hotel) into the US market. First, the industry analysis will be made that will discuss the peculiarities of the US hotel industry, its development, and the key players of the market.

Industry Analysis

The hotel industry is being among the most important sectors in the structure of tourism, which is a material-technical base of the industry that determines the type, features and quality of the tourism product (Buchanan et al., 117). The processes occurring in the field of tourism in general affect the functioning of the main indicators of hotels, and the latter determine the performance of the tourist activity in this area.

The analysis of the hotel market indicates that relatively high prices for services from large hotel chains allow them to invest in new facilities, and maintain their competitive position in this market segment. Competition in this market is maintained, for example, in the Gulf countries, traditionally service-oriented class is "luxury" (Brotherton).

Many major hotel chains prefer to diversify its business and are presented in several price segments of the market under different brands. Thus, the same hotel chain often consists of hotels in different price categories. The cost of staying at the hotel of a class of the same brand may also vary depending on the location. It is essential to note that the vast majority of the hotel chains are represented by several brands simultaneously (Sheldon and Park). Moreover, each circuit can have its own classification of hotels. According to the magazine "Hotels", the largest number of hotel rooms accounted by brands Best Western, Holiday Inn Hotels & Resorts, Hilton, Holiday Inn Express, Hampton Inn, Comfort Inn, Days Inn, Sheraton Hotels & Resorts, Super 8 (de Grosbois, 397).

The US hotel industry is representing 35% of the world's hotel stock (more than 9 million rooms). The pace of development of the hotel base is not higher than in Europe. The total share of the US in the global hotel industry is 37%. This continent has the second highest number of visits due to such directions as the United States, Mexico, Caribbean, etc. North America is a continent with the dominated Hotel Chains (Trends in the Hotel Industry USA).

In the US, the share of members of the hotel chain in the total number of hotels in the country has increased from 45.9% in 1990 to 60% in 2000 (in 1930, the share of Rooms in the composition of the chains in the total number fund of the country was only 15%). Today, at least 70% of US hotels are included in a particular hotel chain, with 195 of their headquarters situated in the USA (Statista). There are ten largest global groups (the owners of one to ten hotel chains) where the vast majority are the US hotel chains.

The 71 largest hotel chains of the world from 150 have the US ownership, and their headquartered are located within the US. The largest of the bottom is Cendant Corp., which has 6.4 thousand. There are more than 510 thousand hotels in the chain. Then, Marriott International follows, which owns 2.7 thousand hotels in the world (Hung, Shang, and Wang, 381). Choice Hotels International caters 388 thousand rooms in 4.8 thousand hotels of the world. In addition, among the US hotel chains, there are Best Western International, Hilton Hotels Corp., Starwood Hotels & Resorts Worldwide, Hyatt Hotels / Hyatt International (Statista).

In the total of 150 of the largest hotel chains, 80 belong to the American continent, which makes the American hotel chain one of the largest chains in the world. In the first world "ten" hotel chains there are seven American chains, and in the first "twenty" - fourteen. American hotel chains are very diversified, here are chains consisting of small hotels (Choice Hotels International, Four Seasons Hotels & Resorts) and those consisting of the world's giants distinguished by quality and high cost of services (Hilton Hotels Corp., Marriott International) (Statista).

According to the number of US hotels within the hotel chain, there are 5 groups: Cendant Corp., Marriott International, Choice Hotels International, Hilton Hotels Corp., Best Western International where each one includes about 2000 hotels. All other American hotel chains are composed of less than 1,000 hotels (Hobbs, and Toscano).

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Wyndham Hotel Group is the world's largest manager of the hotel and real estate group. The American chain of Wyndham is presented in more than 100 countries, and tourist business brings it 32% of revenues. However, only 5% of its hotels are located outside the United States. It manages brands such as Ramada (more than 1,000 hotels in the US and Canada), Howard Johnson (490 hotels in 15 countries), Days Inn (1900 in 12 countries). Villager (125 in the US), Wingate Inn (130 in North America, the Caribbean, 1 - in London), the Canadian Travelodge (114 in the US and Canada), motel chains Super 8 Motel (2000 in the US and Canada), and Knights Inn (160 hotels). The company is also engaged in real estate under the brand Century 21 (where on average every minute one object is sold or purchased) (Statista). In addition, the chain is the owner of the corporation car rental Avis and the world's leading hotel franchise and timeshare.

In 2012, Marriott International Corporation had over 2600 hotels with 425,900 rooms’ accommodation facilities located in the United States and 65 hotels in other countries. The company employs more than 145,000 people (Hoque, 2013). This year, Marriott International will open 11 hotels in Europe and Asia (Romania, UAE, China, Germany, India, Indonesia, Jordan, Saudi Arabia, Brazil, Italy, and Armenia). Marriott Hotels and Resorts are hotels with a full range of services managed through a franchise or independently.

The company Hilton Hotels was established in 1919 (named after the founder and owner). It was reformed in 1946 from the Hilton Hotels Corporation that specialized in large real estate transactions, including the hotel, and succeeded in doing so. At the beginning of 2000, the Hilton Hotels Corporation owned 141,185 hotels, 74 and 1352 hotels under the terms of the lease and franchise respectively (Hospitality & Leisure). The company operates hotels in Belgium, Egypt, England, Hong Kong, Ireland and other countries. Hilton Corporation includes Conrad Hotels, Doubletree, Embassy Suites Hotels, Hampton Inn, Hampton Inn & Suites, Hilton Grand Vacations Club, Hilton Garden Inn, Homewood Suites, Harrison Conference Centers, Scandic and Camino Real. The last two listed names are special as Camino Real is a Mexican chain with hotels of 4-5 stars that in 2000 has assigned contact management with Hilton (Statista).

Best Western International is the largest hotel chain, which included 4,000 hotels in 80 countries in 2007. The company brings together independent hotels that have their own charm and high standards of service. Best Western reserves the right to independence of the hotels guest service program, training, marketing and sales providing consulting services, support and booking systems. At present, the company has 30 offices in four regions of the world. Among 4000 hotels, 2100 are located in the US, and 1900 - abroad (244 hotels in Europe, 309 hotels in Australia and New Zealand, 85 hotels in South and Central America, 63 hotels in Asia and East 7 hotels in Africa) (Slattery).

American Starwood Hotels & Resorts Worldwide, Inc. operates among the biggest and powerful international companies in the hospitality industry and recreation (SelectUSA). The company was founded in 1969, but such brands as Sheraton Hotels & Resorts, Westin Hotels & Resorts have more than 60-year history. Today, the company includes about 850 hotels and resorts in more than 95 countries around the world, with 145 thousand employees in 2006 (Statista). The company acts as the owner, operator and franchiser of the hotels. The brands of the corporation include Sheraton Hotels & Resorts, Westin Hotels & Resorts, The Luxury Collection, St. Regis, W and Four Points Hotels by Sheraton, Le Meridien, Aloft. Starwood geographically represented in almost all continents: Europe, Asia-Pacific, North America, the Middle East, Africa, and Latin America (Chiang, 160).

In order to expend the Repute Hotels London, it is essential to assess the competition in the segment that the particular company operates in.

PESTLE

The purpose of analysis is to identify PESTLE (political, economic, social, cultural and technological, legal and environmental) factors that influence the further development of the hotel Repute Hotels London.

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The Political Factors

  1. Politically stable region.
  2. Support for the tourism industry by the government.
  3. Threats of terroristic attacks.

Economic Environment

  1. The unstable economic situation in the country.
  2. Inflation rate.
  3. The global economic crisis.
  4. US macroeconomic situation.

Social Environment

  1. High unemployment level.
  2. The emergence of new budget accommodation (hostels).
  3. The increasing number of traveling youth.
  4. The emergence of youth as the new fashion trends and couch surfing and hitchhiking.
  5. The emigration of young educated people.

Technological Environment

  1. The introduction of information technology in the service sector;
  2. Increase of the internet integration into day-to-day life;
  3. Advancements in the hotel technological basis.

Legal Environment

  1. Constant changes in the US regulation of the hotel industry;
  2. Immigration rules;
  3. Consumer protection regulations and rules;

Environmental Factors

  1. Changes of weather and climate.
  2. Increase of pollution.
  3. Natural disasters.

After analyzing the macro environment of the Repute Hotels London, it is easy to identify that although there are favorable political environment created by the state through the introduction of a special incentive policies, there are some negative economic and social factors, which influence is also worth considering.

Political factors are increasingly characterized by a fairly strong positive influence of the organization of events of international importance of the United States. The changing political situation in the world is a negative factor in relation to the development of tourism in the country as it creates a negative image of the country and can cause difficulties in obtaining visas and the organization of tourist trips. However, this factor will most likely not affect the object of study that leads to the general conclusion favorable political situation in the market of hotel business (Kosov?, Lafontaine, and Perrigot, 1314).

Turbulent economic environment not fully affects the activity of hotels but plays a role in the activities of personnel and suppliers of hotels. Hospitality is inherent seasonality of demand. Partly, it can be compensated by the seasonal distribution of flows on the objectives of the tour. The volatile economic situation in the country and the changes in GDP have a negative effect, which is permanent and cannot influence a separate company. State investments in this market could make the industry more attractive; however, the likelihood of their support for a particular company is rather small. In this regard, through the economic factors, the situation in the hotel market is quite volatile and unfavorable (The Lodging Industry).

In this case, the influence of technical factors is not so important since the selected branch is not based on the latest developments and adopts the experience of foreign companies adding new solutions applicable to modern reality. Therefore, the influence of technological innovation or the lack of innovation is relatively insignificant.

Social factors create unfavorable environment for the development of tourism resulting in low levels of proficiency among the population, the image of an unsafe place for tourist trips, but these factors are not fundamental.

Ecological issues are one of the most important factors that affect the development of the hospitality industry as they determine how much the consumer is satisfied with service, rest and dreams, through a sense of comfort, atmosphere of hospitality, safety and beneficial healing effect. Their purpose is related to the role performed in the system of tourism. It should be noted that the degree of impact on the environment and the activities of suburban hotels are more pronounced than city hotels. In the course of its business, hotels updated environmental problems such as a forestry reduction in the region, the deterioration of the landscape, the impact on the surrounding environment of the region, the rational use of energy and water resources (Peir?-Signes, Verma, and Miret-Pastor).

Largely due to the creation of an effective system of institutional support for foreign investors, the legal environment of the US is highly appropriate for the Repute Hotels London.

PESTLE analysis has shown that there are enough opportunities for the expansion of the hotel Repute Hotels London. For example, the USA is politically stable region, as well as the tourism industry here is supported by the government (political party), an increasing number of traveling youth (social factor), and an increase in the number of the Internet users (technological environment).

However, the results of PESTLE-analysis have identified the negative factors that may adversely affect the further development of business Repute Hotels London. These include the global economic crisis, in particular, the unstable economic situation (economic factors), the emergence of budget accommodation (hostels) and new youth movements such as couch surfing (social environment).

Cross-Cultural Dimensions

Globalization has unified numerous different aspects of modern life, but still, it is unable to cope with cultural, national, and mental differences. Cultural characteristics that are often underestimated can impinge the image of an international company and its chances for success. Despite many similarities, there are huge cultural differences between the US and the UK. Although the state language of both countries is common, people talk and act differently (Moran, Abramson, and Moran). This is reflected not only in emphasis or individual words but also in the general supply. In addition, people in these countries have different ways to make friends, find work, and interact with people.

At first glance, the Americans seem to be very helpful. They chat with strangers in the store, joke and laugh with other guests in the bar and help their neighbors. At the same time, many Brits living in the United States reported that they are much more difficult to have close friends (Ting-Toomey, and Chung). There is an opinion that the friendliness of Americans is just a surface. Americans do not like and do not take a humorous satire and criticism; it is believed that this is just a waste of time for those who have nothing more to say. An important thing that is essential for the expansion of the Repute Hotels London is that Americans are highly individualistic while the British are conservative. These factors ought to be considered during the expansion into the US market.

Marketing

Marketing efforts cannot be limited to creating high-quality tourism or hotel product and the establishment of a rational price for it. There is still a need to bring the product to the consumer. To ensure effective implementation of hotel products and services, a hotel enterprise should consider a set of measures that find expression in the formation of marketing sales strategy (Jha). Success in the hotel industry measured in terms of sales is expressed in the boot of the hotel, the average price per room, and the amounts of income received. Achieving the highest possible performance depends on proper segmentation of the hotel market and development of the appropriate marketing strategies (sales) that fully meet the needs of the selected segments (Shaw, Bailey, and Williams, 208).

Summary

Before starting the active expansion into the US market, the Repute Hotels London should start its branding campaign. It should focus the attention of potential customers on the advantages, uniqueness, and specific peculiarities of the 4 and 5 stars hotels of the Repute Hotels Ltd. chain.

Today, there are two trends that dominate in the hotel industry: the increasing number of independent travelers and the increasing the role of the Internet in making decisions and organizing the trip. In this case, the task of the Repute Hotels London is to increase sales rooms directly through the hotel website, which will reduce the cost to attract customers to the hotel, and to create and maintain audience loyalty (Chan, and Guillet, 349). In addition, the brand should be actively engaged in the promotion of the hotel in the social networks and add new content every week. Blog is a great tool for this as it is essential to create a reputation in the network. Good reputation, the same as brand management, should involve guests’ leave reviews on different sites.

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