Analysis Of The Shangri La Group Tourism Essay

Analysis Of The Shangri La Group Tourism EssayInternal organisational Analysis and the competitive advantage the group may or may non have in establishing a presence in capital of the United KingdomA schematic representation of the SWOT (Strengths, weaknesses, opportunities threats) give be utilise to match the discover external and internal factors. The following SWOT would pass on us with a comprehensive organizational resource analysis of the Shangri La group a greatside providing us with the competitive advantage the group would enjoy.StrengthsWeaknesses located at a premier location in capital of the United Kingdom as has been unequivocal in their properties passim the world (Grayson Hodges, 2004).Legendary Asian cordial reception the classic Asian Flavor having a Chinese pargonnt c solelyer-out gives them an edge over all the others in terms of having the Asian close part of their collective socialization and thus a unique come out (Hitt, Ireland Hoskisson, 2 009).40 hotels world(a) thus a broad base to piece of ground experiences and put learned lessons from approximately the world to good put on (Robbins DeCenzo, 2007).Pre identify fanny segment of strain and leisure travelers with an eye for class and culture (Robbins DeCenzo, 2007).Service approach shot of hospitality and flexibility embedded in corpo measure culture and food foodstuffing activities (Walker, Walker, Mullins Boyd, 2010).Sound monetary backing.First interaction with occidental culture was Sydney no other experiences as yet in the westboundmostMarked difference in Sydney and capital of the United Kingdoms CultureAn topicive and efficient counsel style played a major role in Shangri La Sydneys success.The brand is not that healthy recognized outside the Asian and immediately overly Sydneys trade.OpportunitiesS-O strategiesW-O strategiescapital of the United Kingdom 2012 Olympic and Paralympics Games.New mean tourist attractions ilk Internation al Dome in capital of the United Kingdom.Trend of using price promotions. relatively lower value of Pound sterlingGrowing emphasis of the local anesthetic government on promoting touristry.Growth of capital of the United Kingdom as a financial orbit a conference and business destination.Establish in capital of the United Kingdom (S1,S2, O1,O2,O4,O5,O6,)Extensive integrated market communication efforts. (W1,W4,O1,O5,O6)Make use of opportunities in the West (W1, W5).ThreatsS-T strategiesW-T strategiesRecent trends show that luxury hotels have grown at a rapid pace in London. The competition in the closelipped forthcoming exit be cut-throat and intensive as to a great extent and more inhabits will be added to the diligence.The presence of much more potent brands in the luxury sector of the London hospitality manufacturing squ ar(a) increase in branded reckon hotels around 13% ratiocination yearUncertainty created by terrorist activities.Aggressive investitures in the se ctor by other Asian in-between Eastern investors.High barriers of entry box Marketing and of importtain that niche (S2,T1,T2)Premium, Image base pricing (S2,S5,T3,T5)Based on the above analysis and the secondary research, Shangri Las competitive advantage lies in its classic Asian Flavor and the ability to principal(prenominal)tain a customer-centric approach which forms the basis of their corporate culture, thus also reducing the need for calibration of transitiones. The core values of the instruction argon respect, courtesy, sincerity, helpfulness and humility and the training modules focusing on the groups mission of delighting customers each and every time (Honeycutt, fording Simintiras, 2003). Not confined to training programs, Shangri-La Care is a documentation culture within the group, strongly supported by top commission and continuously cascaded through the organization. both(prenominal) these are bound to help Shangri La carve out a unique niche for itself in the London market. The unless threat being the fact that other Asian and Middle Eastern players are also venturing into the hospitality industry. Whether those who are bewildered based on their Asian ethnicity are able to bring out the same big H in their culture prevails to be pick upn2. An external analysis of the potential competitors and customers in LondonLondon, that great cesspool into which all the loungers and idlers of the Empire are irresistibly drained.-Doyle, Sir Arthur ConanThe past 20 years has seen an overall increase in the ingrained number of visitors to London, despite any makeshift down adjudicates seen intermittently in the short-term. Overseas visitor meter have increased from 9.6m in 1990 to around 14.9m (estimated) in 2006 (Hooley, Saunders, Piercy Nicolaud, 2008). Domestic visitor numbers to London have also grown over the long-term from 6.9m in 1990 to an estimated 11.8m in 2006. Domestic numbers however have seen the largest fluctuations (compar ed to overseas visitors) in the short-term, resulting in a supple downward trend in total visitors to London since 2002. This has been influenced by the increase popularity and accessibility of legion(predicate) countries and growing competition from other major European cities (due in part to the ascension of no-frills airlines) (Flourish Oswald, 2006).The overall London market has been buffeted by a number of issues since 2001, including terror nonethelessts, SARS and the bang of Foot and Mouth. However, a convalescence in supplicate ( specially for international visitors) is evident and the London bombings in July have proved and a temporary fixedback. Improved room yields have supported investment in saucily hotel rooms in London, increasingly away from primal London to the western and eastern parts of the city. The dispersal of registration represents opportunities for businesses outside of Central London, only also grants challenges for coordinating visitor infra structure including transport and information service (Easterby-Smith, Thorpe Lowe, 2002).There has been strong harvest in the cypher sector of the market and this has provided visitors to London with a greater choice of alteration. Moves to standardize the whole step ratings for hotels will hopefully also provide visitors with greater information and certainty regarding their accommodation experience. Looking forward, touristry is expected to relate to grow (as forecast to 2016 in the 2002 PwC describe and extended in this report to 2026) and when considered in combination with the spare carry on of the 2012 Olympic and Paralympics Games (whose influence was not take ond in the PwC report), and the planned phylogeny of major tourism facilities, much(prenominal) as the International design Centre, it can be seen that substantial additive demand for accommodation on an on-going basis could be generated (Young, Weiss Stewart, 2006). New accommodation is planned to meet future demand, closing the gap between the current room stock and the demand forecast in 2016 as reported by PwC, and the hotel market is cheerful about Londons prospects.Demographic change looking forward, tourism is expected to continue to grow (as forecast to 2016 in the 2002 PwC report and extended in this report to 2026) and when considered in combination with the additional impact of the 2012 Olympic and Paralympics Games (whose influence was not included in the PwC report), and the planned development of major tourism facilities, such as the International Convention Centre, it can be seen that substantial additional demand for accommodation on an on-going basis could be generated. is expected to provide a market opportunity for the provision of accommodation to the hearty accommodation market, although evidence suggests that London is not servicing this market as well as other destinations, which provides challenges for the future (Greater London Authority, 2006).As one of the briny tourist destinations in the world and with the 2012 Olympic Games on the horizon, London is set to be at the forefront of a recovery in the UK, and and so European, hotel markets. Price promotions and the low value of sterling during the year allowed London to remain a popular tourist destination, with leisure tourism particular from Europe, offsetting the fall in corporate bookings, which had continued from 2008 (Smith, Berry Pulford, 1999).These would-be buyers have been attracted by the depreciation of the British Pound against the US Dollar and the Euro. Initial signs of a slowdown in the reduction of values, indicating that the bottom of the market has been reached also makes acquire attractive to high net worth(predicate) individuals and sovereign wealth funds. The come-on of the Olympics is continuing to draw wheeler dealers and developers into the capital, which is predicted to experience a 12% increase in novel rooms (13,300) by 2012. With its high barrier s of entry London continues to be an extremely competitive market place unless one, as the recovery gathers momentum, that will remain a target for the majority of hotel investors, developers and operators with their eye on long-term gains (Murphy, Maguiness, Pescott, Wislang, Ma Wang, 2005).Worldwide, the majority of international tourist trips in 2004 were for the occasion of leisure and holidays (52%) with only16% being for business travel. The rise in the number of citizenry ( some(prenominal) international and domestic visitors) to London has been relatively modest since 2000, with the number of visits only now returning to the high point reached at the Millennium. However, over the long term there has been a steady increase in visitors to London. Nights stayed in London by international visitors have risen on average out by 3.1% each year since 1993 (compared to 1.6% each year for the UK as a whole (Greater London Authority, 2006). In 2004, 33% of overseas tourist trips t o London were for holiday, 27% were for business and 28% were for the purpose of visiting family and friends (IPS 2004, 2005 Growth has been particularly strong in 2004 and 2005, with return of over 14% in 2004 and estimated growth of 6% in 2005.However, growth was relatively modest in the primordial part of the 2000s with a number of circumstances (such as low speak to airlines, exchange rates, terror events) reducing overall tourist arrivals, impacting on both overseas and domestic tourists. The events of September 11th had a similar effect on tourism, with the number of visits only returning to their 2000 high point in 2004 (Robbins DeCenzo, 2007). The London bombings in July 2005 had only a short term impact on overseas visitor numbers with visitor numbers rebounding in the latter part of 2005.7 It should be noted that the PwC report produced in 2002 did not include the short-term downward trends noted above since these trends were only on the dot in the cycle at this point (Greater London Authority, 2006).Domestic visitors to London have also increased dramatically, given the one of a sorting millennium celebrations the opening of several new and attractive tourist attractions. Until recently there has not been a proper understanding within central or local government of the importance of business tourism or its contri furtherion to the local and national economies. One business tourist is worth at least three times the amount of one leisure tourist in employment and economic terms and business tourism is worth 3.2bn to London, reservation the business tourism sector an important heavens for London to invest in. London, being a metropolis destination invariably had immense potential as a business destination (Hooley, Saunders, Piercy Nicolaud, 2008). understanding that potential, the government and the hospitality industry has finally started taking steps in this regard.Currently the city lacks facilities that would allow maximum exploitatio n of the citys potential but hold up has started on those lines. An international chain has just initiated Duchess Rooms in order to attract the businesswoman of today especially the Middle Eastern market (Honeycutt, Ford Simintiras, 2003). However, there remains a great deal of work that the city administration can undertake in a holler to rejuvenate the citys illustrious scene.London caters to a wide variety of visitor specific accommodation needs. The only exception is the apparent lack of accessible accommodation for disabled visitors. Visit London estimates that serviced accommodation (including hotels, bed breakfast establishments and guesthouses) accounts for around 76% of all bedrooms (with the remainder comprising self-catering, hostels and university accommodation) (Jensen, 2008). The budget hotel market growth and the increasing investment in up market hotels has led to a polarization in supply and gradual erosion of the three-star serviced hotels previously provide d by Thistle and Marriott amongst others. It is possible that a situation could occur in the short to middling term where hotel grading and quality/service provision at the budget end of the market, could arrest blurred to some buyers (Guffey Loewy, 2010).With the near saturation of roadside and motorway sites, greater flexibility will need to be shown by both planners and developers if this demand is to be satisfied. For example some solutions may include the alteration or refurbishment of redundant buildings into hotels, rather than completely new build, as well as the development of sites around the M25 corridor and other key transport corridors. The continued growth of London s financial sector will mean more developments geared to this market and the come acrosss/ business tourism market generally. This is likely to include larger developments with leisure facilities, more bedrooms, but also with more flexible meeting facilities and (subject to planning), apartments, apart hotels, or even hotels with apartments located very close by that can enjoy the hotel s facilities ( e.g. Capital, St James and Ritz Hotels) (Hitt, Ireland Hoskisson, 2009).3. An analysis of Possible Segmentation strategies that the Shangri La could adoptThis refers to the process of choosing ones target market. It needs to be clarified at the onset that trade targeting is not synonymous with market segmentation. Segmentation is actually the prelude to target market selection. One of the most significant advantages of effective target marketing is that it improves the efficacy of all the intravenous feeding Ps of marketing (Aaker, Kumar, Day Leone, 2010). The use of segmentation, as a tool to distinguish the entire market into stratas is a useful process. Firms can then decide which segment they are targeting and focus their efforts and energies towards that segment in order to achieve the highest return on investment (Robbins DeCenzo, 2007).Positioning, on the other hand, is a concept introduced in Positioning a Positioning a battle for your mind. According to the authors Positioning is what you do to mind of the prospect. Meaning it is how the customer perceives your product or what you are in the eyeball of the beholder Thus it is imperative that each brand is Positioned in a particular class or segment (Al Ries Trout, 1993).Given the turn of the millennium and the growth witnessed in travel, each segment in the tourism industry has set its goals on increasing its share of the pie thus trying to egress most attractive to the target audience. In this case, marketing communication helps classify similar accommodations and travel hot spots in terms of making their spot appear the most attractive (Arbuckle, 2000). But also in this case, it becomes essential that the target segment for the integrated marketing communication is identify beforehand. It is essential that marketers ensure that the destination is not competing with a competitor with great er edge secondly, that the destinations position is not vague in the customers mind and finally that the destination has no image or probably a negatively charged image in the eyes of the customer. (Lovelock, 1991).The hospitality industry based on the diverse constitution of its offerings also witnesses a variety of position strategies. The meeting place for sun worshipers, is the localisation statement of Cancun, Mexico. However, positioning can castrate greatly. Fisher Island has positioned itself as where people who run things can stop running. It all depends on the creativity of the positioning team (Bergh Ketchen, 2009). An interesting positioning statement is that of Ritz-Carlton Hotels Group it says After a day of competition, you deserve a hotel that has none. The class to which marketing teams strive to be unique determines the extent to which a positioning statement is distinctive and appealing.By developing a creative campaign, an operator can market the fact th at many Japanese visitors have been to the idealistic Canyon, and were impressed by its awe-inspiring presence. This may include testimonials from previous visitors or tour operators example to illustrate this feeling who can make a direct appeal to the target market. However, since the feeling of awe is an intangible construct, positioning statements must show a tangible (Young, Weiss Stewart, 2006). There are many ways of communicating to the audience the position you want your brand to deal in the customers mind. They might include a creative campaign a testimonial by celebs or by previous visitors etc, but it is required to be able to convey the inspiration and the other intangibles associated with the brand.The London hotel market could be segmented into several groups namely, bed breakfast, inns, hotels (five star, four star etc,), rude hotels, motor lodge hotel, town house hotel, youth groups to name the broadest categories. The make-up of branded hotels and luxury ou tlets in London has soared to around 13% of the total supply in the capital, with chains such as Whitbread, Premier go away Inn, Travelodge, IHG s Express by vacation Inn, Accor, Ibis, Choice, Comfort Inn and whole tone Hotels increasing their exposure (Blaxter, Hughes Tight, 2006). This growth in the budget hotel market throughout all parts of the capital, as elsewhere, has been the key trend in this industry over the last decade. In London, particularly, it has to some extent, replaced the traditional three-star hotels which were more in evidence in previous decades. The cost of building a three-star establishment, with its higher(prenominal) specifications, service and food requirement is generally considered to be prohibitive in London.The gradual erosion of the mid-market three-star brands in London has possibly contributed to accusations that the capital is dearly-won and does not provide value- for money , Given that budget hotels have only been so evident in recent years and that central London prices are (like most major cities) high, this is unsurprising (Easteryby-Smith, Thorpe Lowe, 2002).However, as we will see later, both Paris and Geneva recorded higher average room rates than London in 2005. It is perhaps the perception of expensive that has to be addressed. In the central sub-region, it is up to now difficult to find cheap accommodation, dissimilar say Paris or Amsterdam and it is unrealistic to expect budget hotel developers to invest in the more expensive areas of the central sub-region, such as Westminster or Kensington and Chelsea, to any great extent. The dynamics of hotel demand and this industrys development and subroutine economics will mean that future up market hotel development will continue to be more viable centrally. The international business visitor and high disbursal US, Arab and Japanese leisure tourists for example, will still choose to be In this context it should be recognized that a branded budget hotel, with lim ited service may still be awarded a two star grading, the same as a quality inn in the regions with good service, but limited facilities (Greater London Authority, 2006).Hotels in London are concentrated in the central area, but are increasingly being distributed more evenly across London, located where the main attractions, retail and restaurants are located. The luxury sector is amongst the fastest growing sectors in London there are reports that as many as four thousand additional rooms can be operational in the next five years (Greater London Authority, 2006). The industry is set to become increasingly dependent on exotic marketing and luring of customers and tourists that arrive in London each year. It will require a survival of the fittest dodge from all major players to see through the competition.Thistle is the largest provider of hotels and hotel bedrooms in London. The follow has some 5,969 bedrooms, which equates to 6.4% of the total London supply of serviced accommodat ion. Hilton follows closely with 4,662 bedrooms (Greater London Authority, 2006). Both these groups operate in the upper tier category. The Inter-Continental Group operates across the tiers with its 5-star hotel in Park Lane, 4-star Holiday Inns and the budget brand Express by Holiday Inn. Accor, with its range of brands, provides bedrooms in each category, from the 5-star Sofitel to the 4-star Novotel, 3-star Ibis and budget Formula.The main branded hotels be 12% of the total number of serviced establishments and 38% of the number of bedrooms in serviced accommodation. The place branded hotels are most dominant in the high-end of the market, comprising over fractional of all 4 and 5 star establishments in London (Greater London Authority, 2006). The above mentioned names also will be Shangri La Londons main competitors. However, the difference between niche marketing and direct competition will prevail in this scenario. It is necessary for Shangri La to ensure that it is able to position itself well, with respect to its competitors (Etzel, Walker, Walker Stanton, 2007).The international business visitor and high spending US, Arab and Japanese leisure tourists are the main segments that Shangri La will target. As per the Greater London Authority carried out under the London government, he conference and incentive travel industry has evolved over the past few decades into a mature business sector. It is increasingly clear that businesses and associations cannot function efficaciously without face-to-face meetings. Over the ten years to 2004, there was a 50% increase in all business trips (with 27% of overseas visitors locomotion on businesses to the UK in 2004) exceeding the overall tourism growth rate (Gilgeous Chambers, 2001).On a global scale, 16% of International tourist arrivals worldwide were for the purpose of business in 2004. For Shangri La, the discerning business and leisure travelers are the prime focus. The majority of the customers for Shang ri La should hail from this segment and thus should be targeted using appropriate and relevant strategies (Young, Weiss Stewart, 2006).The positioning of Shangri La for the assigned market segments in London will be truly psychological image based positioning aiming to create a unique position in the consumers mind on the basis of the classic Asian Flavor visual prominently in the corporate culture of the organization and in the nature of the hospitality services provided.