Marketing Audit Hotel
The purpose of this report is to evaluate The Felbridge Park Hotel’s marketing capabilities. This family owned business based in Sussex belongs to the UK Hotel Industry. Elements of Hotel Catering are also included in discussion due to the hotel’s restaurant.
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The recession is the main economic factor affecting this industry. 2009 has been tougher than 2008, ‘although there has been an increase in the number of consumers taking UK breaks in 2009 , it is the cheaper end of the accommodation market that has seen the most benefit from this, eg budget hotels and the likes of Butlins. (Mintel 2009) (See Appendix Figure 1).
The strongest macro-economic factors affecting hotels are political/legal and economic. Nonetheless environmental, socio-cultural and technological are also regarded. External Analysis Macro-Environment PEST Analysis Political/Legal: Licences to operate interfere and they can change with political times. Tort of negligence and discrimination laws are other factors affecting Fekbridge Park Hotel as the swimming pool can be a hazard and staff can be accused of negligence. Overbooking is liable to tort of negligence.
All these can financially affect the hotel; in addition they might ruin its reputation. There are laws regarding eviction, reasons must be clearly stated. The restaurant is taken separately, having its own legal and political factors, although they are similar to the ones mentioned above. The industry is facing an increased amount of bureaucracy with the ban on smoking in public areas and increasing concerns about binge-drinking. This comes, of course, on top of the existing costs of complying with Health and Safety Legislation.
Economical: ‘The hotel market generally has been one of the worst affected by the recession in the field of hospitality, with high levels of insolvencies and redundancies rife as a way of controlling costs. (Mintel 2009) ’ This affects the disposable income, consumers putting a greater focus on value for money. Another economic factor is pound power, a consequence of the Credit Crunch, which declined against the euro and dollar (Appendix, Figure 10). This is favourable to abroad visitors that might be attracted by the exchange rates.
High prices not only on hotel services, but customers see hotel restaurants overpriced as well. ‘Mintel found that 16m people think this. ’ Environmental: Concerning both the hotel and its restaurant is consumer behaviour, which can incline favourable to organic products and environmental friendly services and products. Socio-cultural: A trend of cuisine fusion is rising as people want to enjoy different cuisines. ‘Consumers are increasingly demanding to new styles of food and drink from different parts of the world (e. . French, Italian, Portuguese, Indian, Japanese, Thai, Malaysian and Middle Eastern) and restaurants serving these styles are continually springing up. ’ (Case study) ‘Both the hotel and hotel catering markets are expected to receive a significant boost from major sporting events being held in the UK in the coming years: the 2012 Olympics and Paralympics and the 2015 Rugby World Cup. ’ (Mintel 2010) These cultural events will attract large numbers of visitors, mainly in London which is close to Sussex.
On the other hand European Tour Operators Associations argues that the Olympics can harm England as no country has been able to correctly predict demand. They are warning accommodation owners to not increase prices. (Mintel 2010) Technological factors do not have an influential impact on the hotel industry. Micro-environment Markets The Total Revenue of the Hotel Market in 2010 is estimated to 11,516, an increase from 10,968 in 2009. (Mintel 2010) Recession has crushed demand and people started looking for alternatives.
‘Camping and caravanning are negatively affecting the hotel market. (Mintel 2009) ‘The proportion of revenue per room in the UK derived from Food & Beverage (F&B) has declined by 2% between 2006 and 2008: the average F&B revenue received per room for the UK in 2008 was £9,522, continuing recent declines. ’ (Mintel 2009) Customers Market statistics show a focus on corporate and conferences, followed by leisure. The first, main segment has been drastically affected by credit crunch whereas the second segment increased during recession and after. This proves the importance tourists have for hotel industry and Felbridge Park Hotel adapted fast to this change.
Moreover customers choose to stay in UK rather than abroad in 2009. (Mintel 2010) The hotel’s segmentation comprises two consumer segments: business ‘companies from London’ and UK based tourists which are attracted by traditional food and location (between London and South Coast). Regarding the restaurant ‘almost 13m people like the convenience of eating where they’re staying: these consumers tend to be third agers, who are generally attracted to menus with simple, traditional dishes. ’ (Mintel 2009) this aspect is favourable to the hotel.
The gap in the restaurant hotel market is with ‘11m consumers’ that believe hotel restaurants are mainly for their own guests. (Mintel 2009) Restaurants do not satisfactorily encourage this segment. Competitors Direct competitors are locally based, for both the restaurant and hotel. (Case study) There are also substitutes-competitors, further discussion on the topic later in the report. Porters Five Forces Framework Barriers to entry: High costs and unfavourable economic times, as it is a recovering market. Established hotels including Felbridge Park Hotel whose reputation and fame is growing.
High investments in creating a reputation and name are needed. Bargaining power of buyers: Buyers have a high power as they are creating the demand and due to the recession they have emphasised value for money. Their requirements are various and they are affected by many factors in the decision-making process of choosing a hotel and/or hotel-restaurant. Threat of new substitutes is sizeable due to cheap alternatives consumers are searching. It was more powerful in 2009 but decreased in 2010 as the economy is stabilizing.
Consumers could have chosen camping, weekend spa treatments or just a backyard barbeque as ways of relaxation instead of scheduled vacations. Threat of industry competitors: Selsdon Park Hotel through its own golf field. Felbridge Park Hotel has a more strategical location in comparison to Selsdon Park Hotel, but it does not own a golf court. Gatwick Hilton is a main competitor. Especially because a significant part of Felbridge Park’s business customers are staying here for easier access to the airport. Bargaining power of suppliers is low as most hotels have the same suppliers; the same for a hotel restaurant.
Internal Analysis Profitability The development suffered by the hotel in the last 20 years with noticeable enlargements in number of rooms and additional features, can only suggest that there is a cash flow, hence the hotel is being profitable. Also the increasing reputation of the restaurant is attracting locals, which leads to an assumption that is being productive. Marketing metrics such as customer satisfaction ratings are positive: food is popular with businessmen, good custom from guests; nonetheless there have been complaints with serving times. On a long term it can lead to a negative reputation.
Capabilities: Assets and Competencies An asset is the owner’s reputation which increases brand awareness and has been applying to the restaurant as well as the hotel. Permanent staff (assets: people and internal communication) is reliable therefore building customer relationships. Attracting local customers is an asset as it creates consistency and also brand awareness. The swimming pool is an asset. ‘Hotel guests are most willing to pay a premium for a swimming pool or a quality restaurant. ’(Mintel 2009) The culture is represented through ‘a family business’ label which customers might appreciate.
Sandra’s background is an effective marketing tool as it created alertness and a name for the hotel. It is still applying today. Strategy As segmentation is concerned they focused primarily on businessmen segment and later on the tourists market. Families are a third segment that has not proved productive. The approach adopted is to offer cut priced services. They have been attracting only UK tourists although their position is optimum for receiving abroad guests. Data interpretation: the present strategy does not completely, effectively and efficiently connect the hotel’s assets and capabilities to the market opportunities.
The owner family is not exploiting their marketing tool (Sandra’s reputation); they do not tailor service packages according to their segmented markets. The restaurant opening times can be seen inconvenient by customers. The Marketing Mix – The 7 P’s The hotel’s products are: a swimming pool, 60 standard bedrooms, 20 ‘affluent’ suites and 20 family suites; conference room, bar, bistro and a restaurant. The 60 bedrooms are in their matury stage of PLC (were purchased in 1990, part of the hotel).
Assuming the bar, bistro and restaurant aren’t new developments they are as well in their maturity stage. This means sales growth will or are slowing down and competition increases. The swimming pool, 40 bedrooms and conference rooms are in the growth stage of PLC because they are later developments and ‘proved to be attractions in market’. In this stage sales should start increasing. Relating the products to Henderson’s BCG therefore judging from market share and growth, the 20 family bedrooms are question marks as until now they have not proved themselves to generate cash flow.
All the others are stars as they have proven able to obtain market share (they are all attracting and appealing to consumers) but they are not market leaders to become cash cows. Price: the current strategy has included a price reduction, proved ‘moderately successful’ but on the long term it can affect the business (only 10% of consumer buy on price). Place: the location of the hotel is strategically and can be effective as a marketing tool. It facilitates International tourist activity and International business. For UK tourists and businessmen the hotel is located between London and the South, another plus.
Surrounding attractions in combination with Sandra’s reputation are great marketing tools for tourists that want to enjoy golf. Forms of promotion where made through public relations due to the owner’s name and resulted in a widely present recognition. The case study does not provide any other information regarding advertising or any other promotions. Processes regarding restaurant services: only evening service and standardized times do not offer flexibility for the businessmen segment nor variety for the tourist segment.
People: complaints about temporary staff can mean not enough training and not shared values as they are not fully integrated in the team. Permanent staff on the other hand is an asset as they create customer relationships. The main physical evidence is related to the restaurant and consists in the English traditional menu which is appreciated by the local market, but questionable for the International market. As trends in the industry show an inclination towards fusion cuisine this present feature might affect the hotel.