hotel business plan

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University Degree Business and Administrative studies

Harlington hotel business plan

A critical review of the hotel industry, and the feasible idea of a new hotel business

with sufficient strategies in place; with a specific focus on consumer value and

financial accumulations.

Christopher P. A. Tilley 19/05/2009

Index

  1. Introduction ..............................................................................                4        

1.1Purpose...................................................................................        .        4

2.0 Executive summery................................................................                5

2.1 points to be considered.........................................................                5

2.2 The business........................................................................                5

2.3 Market need...........................................................................                5

3.0 Methodology..............................................................................                6

 3.1 Selection of research method ...................................................                6

4.0 Industry Analysis..........................................................................                7

4.1 Market size...................................................................................                7

4.2 trends within the market...............................................................                7

4.3 Market analysis...........................................................................                8

4.3.1 SWOT analysis.........................................................................                8

4.3.2 PEST analysis...........................................................................                10

5.0 Presentation of findings................................................................                11

5.2 Interview overview........................................................................                11

6.0 Consumer analysis......................................................................                12

6.1 Target market............................................................................                12

6.2 Consumer needs......................................................................                12

7.0 Strategic implementation.............................................................                13

7.1 Blue ocean and focus strategy....................................................                13

8.0 Management and frameworks......................................................                14

8.1 Management................................................................................                14

8.2 TQM framework applied..........................................................                14

9.0 Financial sources......................................................................                15

Bibliography..................................................................................                16

Bibliography.................................................................................                17

Bibliography...............................................................................                18

Bibliography................................................................................                19

Appendices............................................................................        ..........                20

Appendix 1 Percentage of accommodation.....................................                21

Appendix 2 Purpose of visit & length of stay......................................                22

Appendix 3 Questionnaire.............................................................                23

Appendix 4 Results..........................................................................                27

Appendix 5 Interview questions.....................................................                32

Appendix 6 Full interview analysis.................................................                34

Appendix 7 Simple SWOT and PEST..............................................                38

Appendix 8 Management and staffing structure................................                41

Appendix 9 Finances.....................................................................                43

1.0 Introduction

The business plan shows how feasible a new hotel can benefit the hotel market and customer satisfaction via strategy, research, and execution of promotion.  The hotel will be placed within Weston-Super-Mare due to the amount of visitors it receives every year, and creating a deal with the local theatres, allowing those who are staying at the hotel will receive discount on theatre tickets, which could consist of up to 50% discount. This is to give a serious competitive advantage over the competition, to develop further to retain consumers, and will benefit by getting known, and will eventually increase profitability. “A 5 per cent increase in customer retention could result in increased profitability of between 25 – 95 per cent” (Reicheld, 1996). This is about having a focus strategy on consumers, once developed, then other developments and strategies, would occur to strengthen the business further.  

  1. Purpose

The main purpose of this business plan is to:

  • Critically review the hotel industry, apply strategies, to research and listen to consumer’s needs and wants.  This would have a specific focus on retaining consumers, and providing a strategy of overcoming predicted challenges and to develop realistic financial assumptions and financial plans.

        

2.0 Executive Summery

2.1 Points covered within the Executive Summery

  1. Explanation of the business plan
  2. Market need for the business

2.2 The business

The business is to be a new medium size hotel of modern services and facilities.  The design of the hotel is to have 60 rooms, reception, waiting lounge, one restaurant, two function rooms, two state of the art conference rooms, one bar, and an indoor swimming pool with a gym.  

The other side of the business is also having links with the local theatres and as a promotion, those of which stay with us can get tickets to see different shows at half price.  

2.3 Market need

The hotel industry is worth just over $30 billion within the UK  and has been on the up since 2003.  Majority of the people who stay within the hotels is domestic tourists. According to Data Monitor (2007) “The UK hotels and motels industry generated total revenues of $34.1 in 2007, this representing a compound annual growth rate (CAGR) of 5.7% for the period spanning 2003-2007”.  

Under the market research conducted 54% of the people asked would stay at a hotel with the offer of 50% per cent discount on theatre tickets, , this shows there is a market and a need for this kind of business as being innovating and new.

  1. Methodology

  1. Selection of research methods

 Two types of research will be conducted.  A qualitative and quantitative approach.  This will build a foundation and gain an in-depth study of consumer’s needs and wants for the business.  According to Gummesson (2000) “an organisation acts in the reality and consists of people”. This suggests when gaining a study of consumer’s needs and wants the business needs to see that people are not just statistics but also they are the ones whose information, can help change the operation of the business in real-time. The two forms of research is Interviews and questionnaires.  Research helps to give a variable, and variety of sources to analyse, helping the decision process.  “Research is the systematic and objective process of gathering, recording and analysing data for aid in making business decisions” (Zekmund, 1991).

 “It is essential to have a clear understanding of the philosophical basis for the research strategy selected and this helps to provide the researcher with clarification, focus and consistency of research design.... this will be dependent on the research design and the types of evidence we collect”  (Hines, 2000).

Questionnaires and interviews are effective because “Studies depended on interviews and questionnaires for their data ..... Using questionnaires and interviews obtained statements about opinions and feelings..... Interview behaviour is a form of social interaction and should be analysed accordingly.   Verbal data has been made the keystone of contemporary social science” (Foddy, 1996)

Interviews and questionnaires are highly relevant because it will help identify, if the business will be viable and this type of research is non-expensive. “Small firms can benefit from low cost qualitative market research techniques to determine achievable advantageous marketing strategies” (Goodman, 1999).

Confidentiality of data is important; ensuring persons taking part are aware of what the project is. “Researchers have a moral obligation to maintain the confidentiality of the data. In this respect the anonymity of the respondent is crucial and should be respected, by the researchers prior to the collection of the data” (McKenna, 2006).  

4.0 Industry Analysis

  1. Market size

The market the business is entering is extremely large as the business is not only going have to compete with hotels, but also other venues of accommodation.  This would include campsites, B & B’s, holiday centres i.e. Centre Parks and theme parks accommodation e.g. Alton Towers. The data provided by Visit Britain (see appendix 1) there is still a variable market for the hotel industry, as it is showing 23% per cent of tourists staying in hotels within the UK compared to the other forms of accommodation.  This percent shows hotels are second choice as 48% would prefer to stay at a friends or relatives house. The business needs to reach out and to be different in order to boost the percentage for the hotel market and lower the FR (friends and relatives) percentage, by providing a high quality level of service and amenities which will outperform the comfort of FR’s.

  1. Trends within the market

The trends of the consumers staying within the UK, the largest amount was mainly for a holiday.  According to Visit Britain (2009) it was the largest since 2000 with a 33% increase in 2007.  But there has been a decline as in 1995 the numbers of visitors has dropped from 44% to 33%. For VFR there has been an increase since 1995 from 20% to 30% (Visit Britain, 2009).  VFR is the only one showing  growth within the market, “since 1999 it has had an increase of 30% in total but they are not contributing to the accommodation sector” (Visit Britain, 2009).

Visit Britain (2009) states “Business visitors are generally a lucrative target- spending on average £126 per night, £514 per visit, and staying largely in paid accommodation (68% in hotels/Guesthouses)”

  1.  Market analysis
  1. SWOT analysis

“This technique provides a framework that enables an organization to assess their position within a market in relation to the competition” (Page and Connell, 2006).

Strengths of the business is having a variety of rooms, several conference rooms, which are hi-tec, high quality service, training programmes for staff and effective strategies in place. This will help to retain consumers and with research on consumers and competitors, the business will be able to enhance finances. “Firms that generate disseminate and meaningfully respond to market intelligence and planning inputs are likely to enjoy enhanced financial performance”. (Jaworski and Kohli, 1993).

Weakness of the business is mainly signage, as it is not cheap and processes though the council can take time.  Other weaknesses are finance. The business will be seeking finance from banks and investors, to help start the business.   “Such firms, which generate valuable knowledge about both customer preferences and competitor intents by integrating planning and intelligence inputs/views, can optimize the fit between their capabilities and external opportunities and thus achieve superior performance” (Novicevic et al, 2004)

Opportunities for the business is developing links with other attractions, to help out in further projects within the town especially with the lead up of the 2012 Olympics as this will help to bring in more custom an dalso benefit the local attractions. The Euro is becoming stronger against the Pound forming an era of an affordable England for international tourists, which helps to have the opportunity of develop a good financial stance within the market.    According to Day and Nedungadi (1994) the opportunities are “intended to provide options for the firms to exercise in order to maximize the fit between its capabilities and future opportunities”.

Threats for the business are the competition as they will up their game to ensure that a new business does not succeed, especially within a recession. The local authority will be a threat via planning permission may not be given for certain development plans. The idea of these threats is to acknowledge them until resources allows them to be minimised. According to Liedtke (2000) “synthesizing process creates value, not only in aligning components, but also in creatively re-arranging them”.

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  1. PEST analysis

Political issues for the business is ensuring all licences required are put into place, this includes selling of alcohol, health and safety – fire exits, supervision of swimming pool, CBR checks, hygiene certificates, different licences for opening and closing times of facilities.   Grants and funding is also an issue as government have made several ways to get a hold of funding for businesses, via the banks.  “For example, executives evaluating potential mergers or acquisitions must consider antitrust suits ...

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hotel business plan
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    7392
  • Page Count
    52
  • Level
    University Degree
  • Subject
    Business and Administrative studies
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