Hotel Management Strategy Report Style: This Report

Hotel Management Strategy

Report Style:

This report looks at the Australian tourism industry with specific focus on the Gold Coast region and its five-star accommodation services. The paper starts by providing a brief introduction of the current stature of the tourism industry as well as the purpose that this report aims to complete. It then moves on to describe the high and lows of the tourism industry in Gold Coast and gives details about the past trends and current structures. In this section, the paper also highlights the various travelling packages and approximate cost ratios for the industry and its standings within Gold Coast. The paper also includes the PEST and Porter five forces analysis whereby we get a clear picture of how the industry benefits the Gold Coast and Australian economy now and why it has a growing percentage of local and foreign visitors with every passing year.

Introduction

Driven by alterations in consumer trends and also the demography of the Australian population, the characteristics of tourism and hospitality are altering. Cassidy and Guilding (2010) assert that the complexness of the companies, organisations and labour force that comprise the tourism industry today must be understood by modern marketers and policy makers to prevent a 'one size fits all' reaction to output.

Cassidy and Guilding (2010) further assert that tourism and hospitality companies are in the frontline of Australia's economy - supplying consumer goods as well as private and leisure services to both domestic and overseas customers. The industries are affected by continual alterations in national and worldwide consumer behaviours, needs and anticipation, in addition to the progressively global nature of the tourism market.

Chou and colleagues (2008) also write that the events, tourism and hospitality industries are inclusive of good performances for a number of different sectors like hotels, restaurants, local cafes or bars, local gaming venues and business centres, recreational facilities like parks, resorts and natural or man-made enjoyment facilities. Tourism also incorporates the use of coordinators, tour procedures, tourist information services, tour guiding services amongst others. Marketplaces within the industries of tourism and hospitality, for example business travel, major occasions and education travel also offer substantial advantages for other industries in marketing Australia and Australian items and services.

Chou and colleagues (2008) further assert that tourism is really a sector comprised of numerous industry participants. It's generally recognized as the complete tourism product or the customer experience, which is supplied with an amalgam of services across an extensive selection of industry participants including (although not restricted to) sectors of hospitality, hotels, restaurants, tourism operators, tourist points of interest, transport, retail, business and major occasions, entertainment, and academic and cultural services. This is especially true from the hospitality industry, which shares most of the service companies within the tourism sector.

Industry Description

D'Angella and colleagues (2009) in one of their earlier studies conclude that a variety of tourist accommodation will come to the Gold Coast City region once the tourism picks up, for example hotels and motels, apartment models, caravan parks and backpacker hostels. Tourism is a vital niche for the location when it comes to employment. Around the Gold Coast 19% of employment (or 27,690 full-time equivalent positions) within the financial period of the year 1998-1999 was associated with tourism. When it comes to the quantity of tourism-related employment in Queensland, the amount of employment produced by tourism around the Gold Coast recognized the state as the second biggest cause of the State's tourism employment (19%). Other primary adding regions were the sun's rays Coast (20%) and Tropical North Queensland (16%).

In the same study conducted by D'Angella and colleagues (2009), the results show that nearly half of the employees from the tourism-related employment around the Gold Coast were inside the Retail and Wholesale Trade sector (11,873 personnel amounting to nearly 43%). Another percentage, one-third to be exact, of the employees of the tourism industry were part of the Accommodation, Coffee shops, bookstores and Restaurants sector (9,143 personnel amounting to nearly 33%). In employment terms, this particular sector had the greatest reliance upon tourism, with more than two-thirds of full-time equivalent positions in the market that existed due to tourism (72%).

A number of researches, like those conducted by Roberts and Jago, 2006 as well as Johns and Lynch, 2007, support that the primary industries that led to tourism revenue inside the Gold Coast throughout 1998-99 were Accommodation, Coffee shops, bookstores and Restaurants, which led a quarter from the area's tourism revenue (a total of $355 million amounting to nearly 26%), and Retail and Wholesale Trade, which paid for nearly another quarter (a total of $311 million amounting to nearly 22%).

In another relative study conducted by Sparks and conducted (2008), the results show that the Accommodation, Coffee shops, bookstores and Restaurants sector was undoubtedly probably the most dependent on tourism, with 73% of their revenue produced by tourism. Next most reliant was the Retail and Wholesale Trade sector (nearly 26% employment being generated from tourism here). The following results were also shown in the same study: the total percentage of hotels, guesthouses and maintained apartment guest rooms within Gold Coast totalled to over 13,175 by the end of June 2004; the amount of room nights offered around the Gold Coast by the end of June 2004 totalled to 3,329,900, which was a rise of 4% in the percentage that was recorded at the end of June 2003; the typical daily room rate for Gold Coast institutions was $116.21 by the end of June 2004, which was $6.24 greater than the end of June 2003; the Gold Coast's top 5 worldwide marketplaces around the end of June 2004 were Japan (25% of site visitors towards the region), New Zealand (19%), the United Kingdom (9%), China (8%) and Europe (excluding the UK and Germany, 7%); there was a clear increase in visitation percentages from the top target markets -- China, United Kingdom and New Zealand -- towards the Gold Coast between June 2001 and June 2004 (with approximate yearly increase ratios of 16.9%, 3.6% and 0.7% correspondingly). There have been decreases in the amount of site visitors from Japan and Europe (excluding the United Kingdom and Germany) throughout the same era (Sparks et al., 2008).

Warnken and colleagues (2008) in a study for the same year asserted that when it comes to customer nights, the Gold Coast's top 5 worldwide marketplaces around ended June 2004 were Japan (1,779,041 customer nights), New Zealand (1,242,985 customer nights), the United Kingdom (643,302 customer nights), Europe (excluding the United Kingdom and Germany, 618,193 customer nights) and also the United States of America (408,853 customer nights). Furthermore, the Gold Coast's top 5 worldwide holiday/leisure customer marketplaces by the end of June 2004 were Japan (27% of worldwide holiday/leisure site visitors), New Zealand (16%), China (9%), the United Kingdom (9%) and Europe (excluding the United Kingdom and Germany, 6%). The writers go on to assert that much like the entire worldwide market, there was a rise in holiday/leisure site visitors from China, the United Kingdom and New Zealand towards the Gold Coast between June 2001 and the year ending June 2004 (average annual growth rates of 18.5%, 5.3% and 1.1% correspondingly). There have been declines in holiday/leisure visitation rights towards the Gold Coast in the Japan and Europe (excluding the United Kingdom and Germany) marketplaces over this era (Warnken et al., 2008).

Five Forces Analysis

Porters Five Forces

Threat of New Entrants

Yeaswich (2006) for the Australian markets observes that despite the fact that entry obstacles are high, because the market is growing, and also the region is progressively being regarded as a tourism and business events destination, hoteliers is going to be urged to go in this segment, mainly within the high-finish and budget segments. As major tourist locations expand, more recent operators might prefer to go into the market. Hence, the threat of new entrants is moderate.

Bargaining Power of Suppliers

Yeaswich (2006) for the Australian markets observes that five-star hotels cannot compromise on quality and therefore, the providers to such hotels may have negotiating power. However, budget hotels search for cost effective strategies to supply to clients and can likewise take a look at cost effective plans using the help of their suppliers. There's always a threat of recent and emerging suppliers in to the growing hospitality industry from the GCC region which waters down the bargaining or negotiating power of suppliers. However, switching costs in one supplier to a different one could be high not just in financial terms but additionally when it comes to quality. Hence, the bargaining power of suppliers is high.

Threat of Substitutes

Yeaswich (2006) for the Australian markets asserts that since you will find many operators in the area, there's high competition. Increasingly more shareholders are growing in the budget hotel segment to improve revenues as well as searching secondary metropolitan areas for brand new revenues. Hence, the threat of substitutes is high.

Bargaining Power of Customers

Yeaswich (2006) for the Australian markets observes that the customer has an array of possibilities and also the internet only has assisted within the marketing decisions process by enhancing the customer review and compare hotels as well as their services. Most clients and customers will also be cost conscious and can usually frequent the accommodation that provides them cost effective. Hence, the bargaining power of customer is high.

Threat of Substitutes - Hotels

Yeaswich (2006) for the Australian markets further observes that substitutes for the hotel industry are often low and can include alternative types of leisure accommodations inclusive of camping sites, portable homes or motor-homes or staying with buddies and family. Switching costs vary from minimal to high (e.g. The cost of the motor-home).

PESTE Analysis

Political Atmosphere

These make reference to government policy like the amount of intervention throughout the economy. Hotel industry in addition to tourism industry includes a fundamental backbone from the government support; without so, it won't have the ability to sustain within the competitive world. Government charges large amount of tax in the star and luxury group of hotels and therefore has a huge effect using the political changes that occur. Any small step taken through the government by altering some law it might seriously affect hotel industry. Your accommodation market is getting huge incentives and also the government authorities support the introduction of hotels as well as their growth. This in reality solves the issue how hotels are intending to expand within the economic crunch time. The government's stability and input, as suggested by Cassidy and Guilding (2007), is thus extremely important for this industry to prosper.

Economic

These include rates of interest, taxation changes, economic growth, inflation and forex rates. As one can see through the "Fundamentals of Financial aspects" book economic change may have a major effect on a firm's behaviour.

Hotels in Gold Coast, according to the conclusions made by Cassidy and Guilding (2007), attempt to capitalise around the foreign vacationers who're seen to create more income to invest together with the growing quantity of anticipation in the hotels. As observed in the past the visitors are prepared to purchase the help they get and also the more the visitors spend the more would the accommodation and tourist industry would succeed. With the rise in the percentage of the visitors the requirement for the great and splendid hotels has become massive. The per capita earnings in Australia also offers rose to a different extent.

Economy within Australia, Cassidy and Guilding (2007) state, faced probably the most minimal impact in the recent economic depression that the global economy underwent due to the controlled economic climate in the region. This assisted hotels to simply focus on the foreign vacationers which in fact had reduced and also the local market being stable was a relief towards the Tourism and Hotel Industry.

Social

Changes in social trends could affect the interest in a firm's items and also the availability and readiness of people to operate.

The social structure within Australia is mixed. It doesn't matter where you're from because in Australia you are more likely to find someone from your community which makes it a very attractive place for international visitors as well. Plus, the entire security level within the country is one that attracts most visitors to Australia as opposed to any other region. It has to be noted here that a majority of the tourist structure in Australia is representative of their social structure. In support of this, Warnken and colleagues (2008) conclude that as tourism isn't a business within the conventional sense of the word, it doesn't come in the nation's accounts or perhaps in worldwide record classifications. It is primarily a social phenomenon and thus must be treated as such. To be able to establish sufficient record standards, a precise meaning of tourism and also the tourist industry continues to be decided on through the United Nation's World Tourism Organisation: Tourism comprises those activities of people going to and remaining in places outside of their usual atmosphere for only one consecutive year for leisure or business along with other reasons that are not associated with the exercise of the activity remunerated from inside the area visited. Hence, the social structure of a state must be one that these consumers will enjoy and feel secure in. They assess thus that industries are often classified based on the service or product being provided but rather, tourism is determined based on the consumer from the service or product, and thus might be considered a social industry. Furthermore, a higher quantity of companies in tourism, hospitality and occasions are involved in several industries. Hotels, for instance, need tourism to create a part of their business, and special occasions or events cooperate with tourism to advertise their location. Some of the common events that are necessary for a satisfactory social standard amongst the consumers according to the study conducted by Warnken and colleagues (2009) include:

Large Tour - 12% of interstate site visitors towards the Gold Coast are inclined to take that Large Tour holiday. There's been some fall off within this market since mid-2003.

Getaway - This holiday type makes up about 15% of interstate site visitors. There's been a large percentage of leverage with this particular market type since September 2003.

Special Occasions - 9% of interstate site visitors arrived at the Gold Coast with regards to an occasion. Lexmark Indianapolis 300, held more than one week every year in October, may be the chief Gold Coast event which draws in interstate site visitors.

Intrastate Markets: Short Break - 41% from the Gold Coast's intrastate site visitors are more inclined to take a Short Break. There is some falling away within the market at the end of 2003. The Gold Coast's closeness to Queensland causes it to be a perfect short break place to go for Queensland citizens. Both seaside and hinterland short break stays are well-liked by the intrastate market.

VFR - 26% of intrastate site visitors are inclined to take a VFR holiday. There is strong development in the Forex market for this sector since 2003.