Senior Project Outline
Table of Content
 Executive Summery
 Brief History of Hospitality Industry
1.
2.
3.
4.
Hospitality Origins
US hospitality history
The Jack Parker Corporation
Le Parker Meridien
 Company Evaluation
1.
2.
3.
4.
Vision
Current Market Strategy
Culture
Focus
 Environmental Analysis
1. Effects of Environmental Causes in Business
2. Generic/Macro Environment
(a) Economic
(b) Social
(c) Culture
(d) Technological
(e) Global
(f) Political
 Customer Analysis
(1)
(2)
(3)
(4)
(5)
Number
Type
Value drivers
Decisions process
Concentration of customers base for particular product
 Competitor Analysis
(1) Brief Current Industry Trend
(2) Jumeirah Essex House
(3) The New London
 SWOT Analysis
1. Internal Factors
a. Strengths
b. Weakness
2. External Factors
a. Opportunity
b. Threats
3. SWOT Matrix
 Market Segmentation
(1)
(2)
(3)
(4)
(5)
(6)
(7)
Introduction
Percent of Sales
What they want
How they use the product
Support requirements
How to reach them
Price sensitivity
 Alternative Market Strategies/Suggestions
(1) Product
(a) Brand Name
(b) Quality
(c) Scope of product line
(d) Packaging
(e) Warranty
(2) Price
(a) List price
(b) Discounts
(c) Bundling
(d) Payment terms and financing options
(e) Leasing options
(3) Distribution
(a) Distribution channel
(b) Motivating the channel
(c) Criteria for evaluating the distributors
(d) Locations
(e) Logistics/transportation
(4) Promotion
(a) Advertising
(b) Public Relations
(c) Promotional programs
(d) Budget
(e) Projected results
(5) Short & Long Term Projections
 References
Brief History of Hospitality Industry
Hospitality Origins
A hotel is an establishment which serves travelers with food and shelter on short
term basis. The word hospitality comes from the French word “hospice”, which
means to provide for the weary. The hotel and hospitality dates back for centuries.
Early hotels were no more than just a room to stay for travelers. During the Greek
and Roman era people began to travel longer distances. Romans were known for
their extensive network of travel routes. These routes paved the way for business
travels. Romans built mansions to provide accommodations for travelers on
government business. They built thermal baths in villages designed for rest and
recuperation (Miller, year).
After the fall of the Roman Empire their network of travel routes fell into
disrepair and became quite dangerous to travel. In this period very few people
traveled and those who did so at great risk (Miller, year). As a result the hospitality
services suffered a great deal. In the Medieval period, travel houses were not held in
very high regard and the people who operated these businesses were considered
crooks. The nobility even made it illegal for owners to charge travelers (Miller,
year). Towards the end of the medieval period people began to use forms of
transportation other than foot. This made travelling more a lot more popular.
“In early England public houses or hotels were normally called ‘inns’ or
‘Taverns,’” (James, year). The name inn was reserved for finer establishments
providing service to the nobility and clergy. The places frequented by the common
people were known as taverns. The birth of the modern hotel industry took place in
Europe in the shape of small hotels which provided a variety of services and were
mainly patronized by the aristocracy of the day.
The advent of the industrial revolution in England brought up new ideas and
progress in this business of Inn keeping. The development of railways and
steamships made travelling more prominent. The industrial revolution also changed
travel from social or governmental travel to business. There was a need for quick
and clean service all the time. (James, year)
US hospitality history
The real growth of the modern hotel industry took place in the USA. As
people migrated to the New World, the US was settled by people from different
parts of the world. The first modern hotel opened in New York in 1794. It was called
the City Hotel; for its time the building was quite large and consisted of 73 rooms.
The City Hotel was the first building devoted exclusively to hotel operations (IRS,
2007). In 1829 hotels took a distinct step up in style and class when Tremont House
opened in Boston. “This hotel was considered by many to be the beginning of what
was regarded as first class service” (IRS, 2007). As more Europeans emigrated to
the US and the ability of the Elite to travel back to Europe led to a cultural
revolution. Hotels in the US were grand affairs borrowing the style of Europe. “This
eventually led to great competition between different cities and resulted in frenzied
hotel building activity” (James, year). Some of the finest hotels of US were built in
this era.
The early 20th century saw a real boom in the hotel industry. In 1908, the
first business hotel, the Buffalo Statler opened marking the beginning of the
modern commercial hotel era. Statler was the first hotel to offer many services now
considered standard, including such amenities as a light switch next to the door,
private bathe, ice water and a morning newspaper (IRS, 2007). Statler set the
standards of the day by being clean, comfortable and affordable. “In the 1920’s,
hotel building entered a boom phase and many famous hotels were opened,
including the Waldorf Astoria, New York’s Pennsylvania, and the Chicago’s Hilton
and Towers, which was originally named the Stevens” (IRS, 2007). This period also
saw a beginning of chain operations under the guidance of E.M. Statler. Chain
operations involved large investments, profits and trained professionals to manage
the business (James). Statler challenged the hotel industry’s attention to the
wealthy by declaring he would offer hospitality at a price ordinary people can afford
(Strausz).
The great depression had a disastrous effect on the hotel industry. It was felt
that the Hotels would never recover; but the outbreak of the World War 2 brought a
tremendous upsurge (James, year). After the war as the population spread out into
the suburbs, the hotel industry was poised to grow. “Motels began to replace
roadside cabins as use of the automobile spread throughout society” (IRS, 2007).
Offering clean rooms with adjacent parking, motels enjoyed great popularity with
traveling public. In the 1950s and 60s, the practice of franchising appeared within
the industry. Franchising enabled entrepreneurs to expand their operations without
the use of substantial capital (IRS, 2007). While franchising allowed motel chains to
grow within North America, big hotel chains operators spread into all continents.
However, as the franchise and chains began to grow, individual entrepreneurs
found themselves crushed in this race for multi-national industry. “International
chains could provide the expertise technology and marketing thrust that individual
owners could not provide,” (James, year). Individual owners increasingly found
themselves at a competitive disadvantage and thus merged themselves with large
chains such as Sheratons, Hiltons, and Hyatt etc…
Today one can find lots of varieties of hotels from contemporary to unusual.
Some of the world famous hotels include the Plaza Hotel and Waldorf Astoria in
New York; the Ritz and Savoy in London, Taj Mahal of Mumbai and others. An
unusual type of hotel is the Ice Hotel. An ice Hotel is a temporary hotel made
entirely of snow and sculpted block of ice. They are promoted by their sponsors and
have special features for travelers who are interested in novelties and unusual
environments. All of the ice hotels are reconstructed every year, and are dependent
upon constant sub-zero temperatures during construction and operation. The walls,
fixtures, and fittings are made entirely of ice, and are held together using a
substance known as Snice, which takes the place of mortar in a traditional brickbuilt hotel. Today’s hotel caters to all the needs and wishes of a guest and the future
holds promise for a further modernization of hotels.
The Jack Parker Corporation
The Jack Parker Corporation was founded in 1955 by Jack Parker. The
company was first founded as family owned business and still remains as a
privately owned real estate development company. The company took off by
realizing its first project of transforming the Bayside Golf Club in Queens, NY into a
residential community of three hundred single family houses.
Jack Parker had a clear vision of what was wanted for the company to be in
the future. The vision was to build an ample portfolio. Thus far, the company
manages a portfolio that includes more than 15,000 residences of luxurious highrise rental, condominiums, and single family homes throughout the Northeast and
Florida in the United States. Part of the Jack Parker corporate vision was also set
on Pacifico, Costa Rica. In 2006, The Jack Parker Corporation introduced the plans
for the development in Pacifico. “Encompassing 175 acres along Costa Rica’s
Northwest Pacific coast,” was acquired to complete the task, (Southers, 2006). The
project included 500 residences which included 350 condominiums, town homes, and
villas, 20 rental apartments, and 150 single-family homes. These properties were
built to meet the United States standards.
Apart from luxury rentals in Costa Rica and the Northeast and Florida, the
Jack Parker Corporation holds a portfolio that includes “world class hotels,”
(Southers, 2006). Among the hotels included in the portfolio are Le Parker Meridien
in New York City and Le Parker Meridien in Palm Springs, California.
The Jack Parker Corporation has stand out from the crowd by “making
history” for being the first one to fully use the IBS system thorough an intranet to
run the “company enterprise-wide property management and accounting activities,”
(the free online library, 2002).
Le Parker Meridien
Le Parker Meridien was first founded in 1981 as part of Le Meridien Hotel
and Resort chain. It has been sold and purchased over twenty different times by
Japanese and British firms. The birth of Le Parker Meridien goes back to the
origins of Le Meridien Hotels and Resorts back in 1972.
Le Meridien Hotels and Resort was first established by Air France. Le
Meridien Hotels is an international European hotel chain with headquarters in
United Kingdom. Its portfolio holds a chain of more than 120 upscale and luxurious
hotels in fifty different countries. The first Le Meridien property was opened in
Paris, France as one thousand rooms’ hotel. As of November 2004, Le Meridien is
owned by Starwood Hotels and Resorts.
Le Parker Meridien was acquired by The Jack Parker Corporation in 1992.
After the purchased, Le Meridien became Le Parker Meridien. In 2001, another
branch was opened in Palm Springs, California.
Le Parker Meridien is a forty two stories property conformed by 730 rooms,
three restaurants, Norma’s the Burger Joint, and Seppi’s, and a health club,
gravity, as well as eight convention/meeting rooms, a bar/café lounge, and an indoor
swimming pool.
Company Evaluation
Mission
“Our mission is to exceed the expectations of our guests, inspire and reward our
associates and provide superior financial results to those who entrust us with
managing their assets,” (Le Parker Meridien Corporate site, 2009).
Vision
“[We pledge] to provide a deluxe personal service to our guests providing the
sense of warmth and privacy. We will understand the needs of guests and
associates, to consistently surpass their expectations by delivering relax yet
luxurious aspects of our facilities,”
Le Parker Meridien Corporate site, 2009
Current Market Strategy
Le Parker Meridien has kept a flexible marketing strategy in order to serve
their clientele according to their changes in needs. Because technology and social
trends are evolutionary factors in the industry, Le Parker has kept their options
towards its strategy opened so that it can be renewed accordingly. The main
resource Le Parker has used to build a competitive advantage and maximize sales is
the available space on premises.
Le Parker Meridien is not just a seven hundred room’s hotel. In addition to
the luxurious rooms, Le Parker is formed by a high scale restaurant, Norma’s; an
urban style fast food restaurant, Burger Joint; a gymnasium/spa; gravity; a coffee
shop/bar/lounge with a renaissance style; eight conference rooms among which a full
view of central park and the latest technology for e-conferencing is offered; a rooftop
swimming pool; among others, like the restaurant Seppi’s. All of these added
ventures form part of Le Parker Meridien current marketing strategy with the goal
to mark a competitive advantage.
However, there have been other ventures of Le Parker’s that have either
failed or not met clientele expectations. One of those cases is Jack’s Bar. Jack’s Bar
was a $250,000UDS investment that closed after its second year of operation.
According to actual management of Le Parker, the venture had low acceptability
among customers.
Usage of available space on premises is one part of Le Parker Meriden's
current market strategy. The other part consists of focusing on customer service
improvement. To achieve a superior ranking on customer service, Le Parker uses
primary data obtain from its clientele feedbacks. Le Parker collects surveys from all
its new guests in order to get feedback regarding the service provided. Weekly staff
meetings are held to analyze the results of the customers’ feedbacks. Using the
information collected, Le Parker addresses and fixes any inconvenience found the
customers. Another method used by Le Parker to collect customers’ feedback is
using secret shoppers. The secret shoppers would stay at the hotel and later provide
Le Parker with a report of its experience during its stay at the hotel.
Culture
Le Parker Meridien promotes a culture of flexibility in their environment.
Walking repeatedly into the lobby of the building could bring out different emotions
on a person for each entrance would become a unique experience. The unique
experiences would be due to the diversification in music that constantly plays in the
lobby. There is no sole music type that would play as they go from the typical
Hispanic Merengue to a Chinese romantic ballad making every audience feel rather
comfortable. By using this technique, Le Parker complies with their idea of being
able to adapt rapidly to changes shall the time call for it.
Music is just one of the techniques used by Le Parker to make their
environment friendly. Other techniques used are employed in the design of the
lobby with a Renaissance theme. The antique look is differentiated using casual
styles. One example of the casual integrated is the usage of Mac computers by the
front desk personnel. The relaxed environment is also promoted among employees
by not calling each other employees but associates instead and not using name tags.
Focus
Le Parker Meridien’s motto is “uptown, not uptight”. The motto is used by the
company to centralize their focus on customer’s needs. Whether their customers’ call
is based on money or service, Le Parker has an answer for it. As method to solve
their customers’ complaints, Le Parker has developed a method that they guarantee
has been effective. Le Parker collects customers’ satisfaction surveys from all new
guests. The results of the surveys are analyzed by managers of different
departments in a meeting that is held on weekly basis. The motive of these
meetings is to improve any discrepancies found by the guest in any aspect of the
hotel. Remedy to the situation is immediately put into practice and a follow up call
is made to the guest to apologize for any inconvenience and assure that the matter
was taken care of. Another way to keep guests coming to the hotel used by Le
Parker is by offering to lower the Junior and Tower suite prices to the floor price
when a guest tries to cancel reservation in advance. These techniques have
contributed to Le Parker’s 30% of customer retention.
Environmental Analysis
The Effects of Environmental Forces on Businesses
Environmental conditions affect Businesses in many ways. These conditions
are forces that keep changing their courses while creating events that can affect
business performances favorably or unfavorably or determine whether companies
will succeed or fail. All businesses must understand their significances. Failure to
ignore the importance of environmental forces can damage significantly the
performance of a firm, threaten its survival, and even stop its existence.
Raghavan Parthasarthy and Alvin L. Booke, authors of the book Strategic
Management, from Baruch College, City University of New York, classify
Environmental conditions into two distinct areas of study as follow:
1. Generic or macro environment
2. Industry environment
The purpose of this study is to stress the value of environmental changes and
focus mainly on the impact of the generic or macro environment, which may often
be underestimated by many companies. Many firms, however, behave reactively to
the industry environment climate because they fail to plan strategically, and
consequently struggle to adapt to the changing environment."Firms that have
excellent forecasting skills and rapid adaptation capabilities will, therefore, survive
and succeed," (Parthasarthy & Booke, year). This study has two specific objectives,
and they are the following:
1. to underline the impact of the business environment on the U.S. hotel
industry
2. to show why hotel management must consider environmental information to
forecast any possible threats and opportunities that may occur in the climate,
which they can exploit to their benefits
Because of the complexity of the hospitality and tourism industry, the scope
of the research is limited to the business of the hotel industry. For the purpose of
clarification and illustrative information, each area of the environmental conditions
that affects the hotel industry must be defined respectively.
Generic/Macro Environment
The macro environment constitutes the following changing forces/agents:
•
Economic
•
Social
•
Cultural
•
Technological
•
Political
•
Global
Economic Factor
The economic environment reflects standards and general well being of a
society. The economic growth increases consumer income and expenditure,
(Parthasarthy & Booke, year). Higher consumer spending reduces competitive
pressures, thereby increasing opportunities for businesses to make above average
profits. By contrast, economic decline leads to reduced consumer spending, resulting
in price wars and lower profits. This definition, therefore, correlates with the state
of the economy. The terrorist attacks on September 11, 2001 of the World Trade
Center Towers in New York City, and in Washington D.C .are prime examples of
environmental conditions. This catastrophe resulted in thousands of losses of
human life, countless casualties, and produced a devastating economic effect on all
business industries domestically and abroad. As a result, U.S. airlines and airports
were forced to close for three days for the first time in history. To prevent future
possible attacks, the U.S. airline industry and customs houses in the airports have
enhanced their security measures. The aftermath of this horrendous tragedy
brought fear to the entire country and the rest of the world. Consequently, people
abroad became afraid to travel to the United States. Americans were afraid to
travel abroad for fear of being targets; they were afraid to travel even at home due
to security concerns. Over all economic loss is estimated in billions of dollars, and
the Travel and Tourism industry is one of the worst affected sector especially the
Airline industry. According The International Air Transport Association (IATA),
direct losses form the unprecedented closure of U.S. commercial airspace for two
days following the terrorist attacks on the morning of September 11 have been
placed at $10 billion, (author, year). Delta Airlines puts the figure at $4.7 billion for
September alone. Moreover, IATA has indicated that $7 billion US will be lost by
the world’s airlines in 2001, almost three times the amount predicted prior to the
terrorist attacks. Job losses worldwide could exceed 200,000, with more than
120,000 already lost sine September 11 in the U.S. alone.
The 9/11 terrorist attacks without no doubt has caused severe economic
damage to the U.S. particularly to the Hospitality and Tourism industry including
airlines, hotels, and restaurants. According to Jones Lang LaSalle Hotels, one of
the world’s leading professional services firms, specializing in hotel estate, the
damage cost has been estimated at $60 billion, including:

Damage to buildings which is estimated in excess of $20 billion

Economic output lost in September alone which is expected to reach
$25 billion. The graph below indicates that airlines and hotels are the
severely affected.

Disruptions to the U.S. financial system and transport industry which
are estimated to cost an additional $ 15 billion in lost output in the
final quarter of 2001
"Business travel had already been the dumps, and hotel occupancy rates
weren’t exactly robust before recession, and Sept. 11 became part of our every
lexicon." (Allen, 2002, pg 2). Studies show that in U.S. cities with a high ratio of
business travelers, this sector has not recovered at the same pace as the domestic
leisure market.
“Therefore, hotels in U.S. cities have continued to face tough competition to protect
their business. For cities such as San Francisco, Boston, New York and Chicago, the
industry has recorded declines of 10 to 27 percent in Revenue per Available Room
(RevPAR) during July 2002. In addition, the results indicated that airport hotels
continued to be the poorest performers in the U.S. hotel industry, and the RevPAR of
U.S. airport hotels fell by 20 percent during the fourth quarter of 2001. The forecast
of July 2002 was improved, but still dropped 10 percent.”
Hotel industry 9-11 predictions: Who was on, who was off, 2002
The Social Factor
The social environment plays a critical function within the environmental
condition. Social change, by definition, comprises demographic and life style trends.
According to an online article, “Looking into Hospitality and Recreation”, during the
late years of the twentieth century, the hotel chains dominated the industry,
(author, year). As more people travel around the world, the hotel chains built more
facilities to accommodate the increasing number of travelers. To attract more
travelers and retain them as clients, hotel chains offered similar accommodations in
each hotel chain site, and offered services from nationally known franchises such as
pizzerias or Starbucks coffee shops. However, by the beginning of the twenty-first
century, travel destinations and vacation activities were changing.
People now travel for reasons other than leisure and business. There are
people who travel simply to explore nature and experience cultural heritage. There
are those who travel to visit ancient sites or to search for relatives or ancestors at
home and abroad. In fact, many hottest trends in travel are on the rise. Perhaps
“ecotourism” is the hottest trend. According to the Quebec Declaration on
Ecotourism, ecotourism “includes local and indigenous communities in its planning,
interprets the natural and cultural heritage of the destination to the visitor, and
lends itself better to independent travelers,”(author, year).
Another growing trend is the archaeological tourism according to the paper.
People travel to visit ancient sites in the Middle East, Africa, Europe, and Asia.
According to (author), in 2005 Archaeological Tours in New York City offered
packages tat allowed travelers to explore the ancient Silk Road of China, the
Byzantine monuments in southern Italy, and the legendary statues of Easter
Island. Archeologists or university professors led most of the tours.
Additionally, (author) states that travel trend has its roots in America’s
history as a country of immigrants. The report found that in recent years many
Americans have begun searching for relatives and ancestor both at home and
abroad. “As distant parts of the world grow closer together, travelers are finding
more opportunities for what has come to be called ‘heritage travel' to Europe, Asia
Africa, and Central and South America,”(author, year). This change in tourism
forces the hotel industry to create effective marketing strategy to take opportunity
of these emerging market trends in travel. The industry must segment these
markets to cater to their needs. The article indicates that the hotel industry faces
fierce competition due to an oversupply of hotel rooms. A construction boom in the
1980s was followed by a decline in the number of travelers during the early 1990s.
Hotel occupancy fell from a high of 72 percent in 1979 to just 59.2 percent in 2003,
leaving more than one-third of all hotel rooms empty on any give night. The result
of this oversupply has been increased market segmentation. Rather than running
huge, five-hundred-room hotels to fit the needs of every traveler, many hotels today
target one market segment such as business or budget travelers.
The Cultural Factor
This refers to change in the values and beliefs of a society by definition. The
United States of America is a country that is rich in history and culture. It is a
huge place where cultural heritage is rooted in history of racial and ethnic diversity.
Americans and people around the world travel in the country to visit locations with
historic sites and buildings, museums, and particularly to experience the country’s
landscapes and its cultural diversity. This trend convinces the Travel and Tourism
industry leaders to explore not only the cultural opportunities, but also to
acknowledge it as a new market segment of the industry. As a result, more than
1,500 dedicated political and industry leaders and practitioners, as part of their
national agenda for the travel industry, had adapted a seminal blueprint for
cultural and heritage tourism at the 1995 White House Conference on Travel and
Tourism. In the paper “A Position Paper on Cultural & Heritage Tourism”, the
authors capture the definition of cultural and heritage tourism by writing the
following:
“travel directed toward experiencing the arts, heritage, and special character of a
place. America’s rich heritage and culture, rooted in our history, our creativity and
our diverse population, provides visitors to our communities with a wide variety of
cultural opportunities, including museums, historic sites, dance, music, theater,
book and other festivals, historic buildings, arts and crafts fairs, neighborhoods, and
landscapes.”
author, year
The following illustration (published by, when) shows the direct impact of the
Cultural and Heritage industry on the Hotel industry
The Technological Factor
Today no business can operate effectively without having a full knowledge of
its industry market trend. The technology plays an indispensable role in the
business operations of any type of industry. It can contribute to the success or
failure of a company depending on the ability of the company to take advantage of
technological application to maximize revenue opportunities, and to project
economic conditions that may affect business operations domestically and abroad.
Despite the awareness of the growing value of technological use in the hotel
industry, not enough hotel chains take full advantage of its benefits. In fact, most
hotels still utilize legacy systems that are fragmented and limited in distribution
technology platform according to Amadeus, a global leader in technology and
distribution solutions for the travel and tourism industry. On November 26, 2007,
in Madrid, Spain, Amadeus had completed the migration of 75000 hotel properties
onto a next-generation distribution technology platform. Its strategic goal is to reengineer hotel technology into a new era in electronic distribution, reservation and
search. Antoine Medawar, Managing Director, Hospitality Business Unit,
Amadeus, says that:
“With more than two billion people checking-in to hotels each year – more even than
the airline industry – the hotel industry is one of the world’s biggest in terms of
transactions processed, but the industry’s IT processes remain fragmented and
unready to cope with the enormous increase in transactions as more hotels are
booked online…Our hotel distribution platform is designed from the ground up to
help hotels reduce costs and increase revenue by centralizing their technology
infrastructure and preparing their businesses for the next wave in the online
evolution of the travel industry.”
The traditional labor-intense method of managing labor productivity often
restrains revenues opportunities. Due to technological advancement, integrated
management systems can help hotel companies to manage labor productivity more
efficiently. An online article reports a discussion meeting held in Geneva, April 2-6,
2001, about Human resources development, employment and globalization in the
hotel, catering and tourism sector. (author) contrasts the traditional labor-intensive
operations of this industry with computerized integrated management systems that
can enable hotel companies to manage business effectively. The report states,
“Integrated management systems are enabling hotel companies to computerize dayto-day reception operations. Clients are thus able to make their own reservations
via the internet, while electronic in-room installations make it possible to settle
accounts from the hotel room. This technology will also make it possible to monitor
the productivity of personnel, while new techniques in food preparation and storage
are reducing the skills needed in the kitchen and the time required for food
preparation. Hotels are therefore seeking new ways to measure service delivery that
take into account customer satisfaction and return visits, rather than sticking to a
narrow “input/output” system.”
International Labor Organization, 2001
Efforts have been made on the part of many hotel chains to reverse the
traditional approach by implementing new computerized systems. The following
table published by the Australian Bureau of Statistics in 2000 shows the figures of
three countries where tourism industry is labor intensive.
Tourism characteristic industries: Share of gross value added and employment
Country
Gross value
added (%)
Australia (1997Employment (%)
98) compared*
Australia (199798)*
compared
New Zealand
(1995)
3.7
3.2
4.1
4.9
Canada (1997)
2.5
3.9
3.7
5.7
2.3-2.8
3.3
3.3-4.0
5.1
United States
(1997)
In order to estimate its labor productivity, the industry habitually uses – in addition
to revenue per employee – the number of hotel rooms or beds per employee.
The hotel industry by global regions, 1995
Total
Number
US$
of hotels
revenues
(billion)
Number
of rooms
Number
of beds
Number Number Revenue
of
of beds
per
employees
per
employee
employee (US$)
Africa
6.30
10 769
343 347
675 960
1 259 019
0.54
5 004
Caribbean
7.92
5 290
155 253
300 097
277 614
1.08
28 479
Central
America
1.20
1 160
41 221
83 862
232 180
0.36
5 171
North
America
62.13
66 943
3 738 977
6 725 390
2 268 256
2.97
27 396
South
America
9.84
14 576
487 787
1 005 972
1 283 917
0.78
7 667
Northeast
Asia
23.73
10 192
719 480
1 470 857
1 120 339
1.31
21 190
Southeast
Asia
12.84
13 211
453 657
898 212
730 585
1.23
17 566
South Asia
3 08
3 663
159 417
223 519
472 092
0.47
6 532
Australasia
6.60
10 082
229 319
567 346
539 286
1.05
12 250
Middle East
9.24
4 735
162 178
326 131
455 432
0.72
20 302
European
Economic
Area
87.49
151 945
4 242 193
8 108 983
1 873 772
4.33
46 687
Rest of
Europe
17.40
15 117
600 370
1 153 939
681 926
1.69
25 509
Total/Average
247.78
307 683 11 333 199 21 540 267 11 194 418
1.91
22 143
Source: Into the New Millennium, A White Paper on the Global Hospitality
Industry, 1996, International Hotel Association; calculation by the ILO, total
revenue figures rounded to two decimal places.
The most striking thing to note regarding labor productivity in the different
regions is the gap between Europe’s average of about US$47,000 per employee and
the overall average of US$22,000. The performance of the Caribbean (around
US$28,000) is also impressively higher than average.
The pace of information technology is so dynamic that no industry can
manage information productively without the use of up-to-date technology. The
hotel industry is no exception in that trend. According to www.hotel-online.com
news report, ten top issues in the Hospitality Industry for 2007 were discussed at
the Annual Conference held in Miami, FL, by members participated in a series of
roundtable discussions to identify these issues. The members identify seven issues
as the “distribution revolution”, which they examine with the following finding:
“In 2006, it is estimated that $24 billion worth of hotel rooms in the US alone will be
booked through internet sites representing 27% of the US hotel industry room
revenues --- up from $ 15.5 billion just two years ago. Moreover, industry analysts
estimate an additional 25 to 30% of all hotel bookings are influenced by online
research. The bottom line is that the hospitality industry continues to experience a
revolution in distribution, and organizations are less and less equipped to keep pace
with dramatic changes in this online “landscape”. As distribution via the Internet
evolved, many experts agreed that online presence helped “level the playing field”;
that independent hotels and small hotel companies could compete in cyberspace with
major brands. Today, the issue is not “can they compete” but can any hotel or hotel
company keep pace with the colossal changes and innovations that flood the online
world?”
Author, 2006
The Global Factor
Globalization is defined as the development of an increasingly integrated
global economy marked especially by free trade, free flow of capital, and the tapping
of cheaper foreign labor markets. This factor causes tremendous challenges for the
hotel industry. Due to globalization, the world market is shrinking and people
around the world are getting closer or closer to each other. Due to the economic
growth of developing countries such as China, India, and Brazil, business
professionals and entrepreneurs from developed countries travel more frequently to
these countries for business ventures and investments. In quest of revenue
opportunities, many American companies have been penetrating the world’s
growing markets more aggressively in order to acquire more market shares and
remain competitive. Multinational corporations like McDonalds, IBM, and General
Motors have become increasingly culturally aware. To ensure they maintain
employee low turnover rate and high labor productivity, these companies promote
cultural diversity by offering intercultural training courses to their domestic and
foreign employees. In an article Why Cross Cultural Training? (Published by) the
authors state that:
"...the single greatest barrier to business success is the one erected by culture.”
Edward and Mildred say, “Today, more than ever Business success requires
intercultural awareness and effective cross cultural communication skills. Working,
meeting, dealing, entertaining, negotiating, and corresponding with colleagues or
clients from different cultures can be a minefield. Understanding and appreciating
intercultural differences ultimately promotes clearer communication, breaks down
barriers, builds trust, strengthens relationships, opens horizons and yields tangible
results in terms of business success.”
Hall & Hall, 2007
Thomas L. Friedman makes a very interesting case his book “The world is
flat” to his figurative book title. He proves that the world is no longer round by
showing all the environmental conditions that bring people around the world closer
and closer to one other. He believes there are ten forces that flattened the world.
1. Flattener #1: 11/9/89, The New Age of Creativity: When the walls come
down and the windows went up
2. Flattener #2:
8/9/95, The New Age of Connectivity: When the Web went
around and Netscape went public
3. Flattener #3:
Work Flow Software
4. Flattener #4:
Uploading, Harnessing the power of communities
5. Flattener #5:
Outsourcing, Y2K
6. Flattener#6:
Off shoring, Running with Gazelles, eating with Lions
7. Flattener#7:
Supply-Chaining, Eating Sushi in Arkansas
8. Flattener#8:
In-sourcing, What the guys in funny brown shorts are really
doing
9. Flattener#9:
In-forming, Google, Yahoo!, MSN web search
10. Flattener#10: The Steroids, Digital, Mobile, Personal, and Virtual
The above statement is summed up as follows:
“The Bible tells us that God created the world in six days and on the seventh day he
rested. Flattening the world took a little longer. The world has been flattened by
the convergence of ten major political events, innovations, and companies. This
chapter is about the forces that flattened the world and the multiple new forms and
tools for collaboration that this flattening has created.”
Friedman, 2005
According to Mr. Friedman, the shrinking world market and the
unimaginable technological advancements that allow instant access and sharing of
information worldwide, have compelled people around the world to work together,
collaborate, and form new alliance and partnership instead of competing against
each other.
The Political Factor
The political factor has always plaid a pre-dominant importance in the
economic function and behavior of a society of every country in the world. Thus, the
economic stability or instability of a country is the result of its form of government
or political establishment. Therefore, governmental rules of a given society can
have a profound impact on its business industries. The political unrest of
November 2008 in Thailand is a good example to show how the ongoing political
crisis in Bangkok, Thailand’s capital, has crippled the country’s hospitality
industry, which already has to deal with the global economic downturn. Over a
period of five months, from November 2008 to March 2009, the four Thai markets,
tracked by STR Global, the leading provider of market information to the global
hotel industry, have reported declines of more than 30 percent in revenue per
available room (RevPAR) against the comparable period of the previous year. The
closure of the airport due to violent protests during the political unrest had James
Chappell, managing director of STR Global, to say this: “Security is a main concern
of travelers, and the recent media coverage of violent protests will deter many
business and leisure guests contemplating travel to Thailand.”
The following table shows a five consecutive month period of sharp revenue
decline in the hotel industry reported by Thai markets due to the political crisis.
5-month performance of selected Thai markets (November 08 to March 09) and
percentage change to prior timeframe
City
Occupancy
ADR
THB
RevPAR
THB
occupancy %
change
ADR %
change
RevPAR %
change
Bangkok
52.7%
3564.8
1879.2
-31.6%
-3.7%
-34.1%
Chiang
Mai
43.0%
3755.0
1616.3
-31.9%
-11.9%
-40.0%
Hua Hin
57.4%
5174.8
2968.2
-27.0%
-9.0%
-33.6%
Phuket
60.8%
5327.6
3236.9
-24.8%
-10.9%
-33.0%
Competitors’ Analysis
Brief Current Industry Trend
This industry environment is referred to as the competitive environment or
the task environment by definition. Therefore, one can say that this environment
constitutes changes that occur due to the needs or demands of consumers for
products or services or lack of their needs or demands. All of these factors, thereby,
create the business climate for industries in this declining economy.
According to a report published by the official website of the city of New York
(nycgo.com) in 2007 there were 46 million visitors to New York City. To
accommodate these visitors, New York has plenty of hotels to offer. There is fierce
competition amongst hotels to attract as many guests as possible. Hotels compete
within their market segments to achieve their desired occupancy levels. In the case
of Le Parker Meridien, the management perceives the following hotels as their
direct competitors: Jumeirah Essex House and The New London. These hotels
market themselves to a similar clientele base. They are all four stars rated hotels
and are located within few blocks of each other.
Jumeirah Essex House
Jumeirah Essex House is located on the southern edge of Central Park. This
historic hotel was first opened in October 1931. At the time of construction it was
the tallest tower in New York. The hotel is 44 stories tall and is one of the city’s
premier Art Deco masterpieces of the 1930s. “Jumeirah Essex House is one of more
than 200 hotels and resorts throughout the country that is recognized by Historic
Hotels of America for preserving and maintaining its historic integrity, architecture
and ambiance” (Jumeirah, 2009). The hotel has had several owner/operators over
the years, including Marriott Hotels (1969), Japan Air Lines/Nikko hotel (1985) and
is currently under the direction of the Jumeirah group (Wikipedia, 2009). In 2006
the Jumeirah group acquired the hotel and started a 90 million dollar
refurbishment program (Jumeirah, 2009). By October 2007 the renovation was
completed and the hotel opened its doors once again.
Essex house features 515 luxury rooms and suites ranging from 300 to 2500
square feet. Many of the rooms offer unobstructed view of central park and the
Manhattan skyline. “The decor throughout the rooms captures the 'glory days' of the
'Golden Age of Travel' of the 1920s and 1930s, whilst providing the very latest in
comfort and technology” (Jumeirah, 2009). Essex house provides its guests with
latest room technology like LCD flat panel TVs, touch-screen control pads for
preferred lighting, mood and temperature settings. Essex house features two
restaurants South Gate and Lobby Lounge. The South Gate offers a unique dining
experience in a contemporary overlooking Central Park. Essex house also features a
state of the art health club and spa. The recently renovated in-house spa facilities
include a dedicated relaxation lounge, personal training, sauna and steam bath and
a selection of massage treatments. The health club is fully equipped to serve the
needs of its guests. Essex house provides its guests a blend of prewar charm and
state of art technology to make their visit memorable.
Essex House has been a New York landmark for over 75 years. This long
history of service serves as a huge strength for the hotel. The Art Deco design and
pre war charm of the building also attracts many guests. The hotel is located across
the street from Central Park; this location greatly benefits the hotel because of its
convenience. Some of the major tourist attractions like Lincoln Center, Carnegie
Hall, Fifth Ave, and Times Square etc are within walking distance from the hotel.
The management of the Essex house, The Jumeirah group holds a world class
portfolio luxury hotels and resorts. Some of its most famous hotels include the Burj
Al Arab in Dubai, one of the most exclusive and expensive hotels in the world, and
Carlton Towers in London among others. The experience of managing a variety of
luxurious hotels provides an edge to the management over its competitors. The
company holds properties in different countries, therefore has access to vast
resources and alternative strategies. Essex house in New York, for example, can
introduce a new technology popular among guests at Carlton London. The website
of Essex house is very informative and user friendly. The design of the site is very
attractive and adds value to the company.
The New London
The London NYC is located on W 54st in midtown Manhattan. It was built in
1990 as the Rihga Royal hotel. In 2007 the hotel received a total make over by the
LXR hotel group and reopened as The London. It is the tallest hotel, 54 stories, in
New York. The London also has some of the largest guest rooms in New York, the
smallest of which measures at 500sq feet; the largest go up to 2200sq feet. Rooms on
the high floors offer breathtaking view of the Manhattan skyline. Few New York
hotels can match the space of the London's standard suites. All suites feature the
latest technological enhancement like free high speed internet: wired and wireless,
LCD plasma TVs, iPod docking stations, DVD players and automated mini bars.
The London boasts the first U.S. restaurants by British star chef Gordon Ramsay,
whose formal dining room has received excellent reviews from New York food critics
(PTR). The fitness club known as The London club is exclusively for the guests. Just
like the guest rooms the fitness center is also unusually spacious. The club offers
yoga, Pilates and a computerized training system. In addition it offers all kinds of
exercise machines like treadmills, elliptical and bikes (PTR, 2009).
The London markets itself to the sophisticated traveler and it is well
equipped to serve the needs of these travelers. The architecture and décor is modern
and practical which attracts these customers. The room size and technology
enhancements also add value to the trip. The location also attracts many visitors to
the London. The hotel is located just a few blocks from MoMa, Broadway theaters
and 5th Avenue shops. While most hotels in New York charge additional fees for
internet usage, The London offers its guests free high speed internet access. This
service is very attractive to business travelers who often need to work from their
suites. Although the London may not be in the same deluxe category as the nearby
Four Seasons, the space, style and location represent an outstanding value for wellheeled business or leisure travelers.
SWOT Analysis
Definition
S = Strengths
W = Weaknesses
O = Opportunities
T = Threats
A SWOT analysis is a “situation analysis in which internal strengths and
weaknesses of an organization, and external opportunities and threats faced by it
are closely examined to chart a strategy,” (Business Dictionary, 2009).
Internal Factors
Just like any other company, Le Parker Meridian has got both strengths and
weaknesses. The strength of an organization enables it to maintain or improve its
market share. Organizations should try as much as possible to perceive any changes
required in order to increase its competitiveness in the market. One of the key
strategies of the Le Parker is its abilities perceive changes in the market. The
management at Le Parker is proactive, rather than reactive, to changing market
conditions. In the wake of current economic crisis, the management anticipated a
drop in their business clientele. In order to maintain their occupancy rates,
management started to target new markets in order to attract new guests.
It has been found that, for any organization to succeed, it must adapt to the
conditions of the market. Le Parker is one of the organizations which perceives and
implement changes in order to stay ahead of the competition. The effectiveness of
an organization’s competitive advantage relies on rareness and uniqueness of its
capabilities and resources. If a company is less imitable, its competitors are likely to
face cost disadvantages in trying to imitate its competencies. As a result, core
competence is a critical source of effective and sustained competitive advantage for
organizational success and high economic returns (Davila, 87, pg53). Core
competence of an organization has been defined as a bundle of technologies and
skills that aid an organization in provision of specific benefits to consumers. It is
important for managers to note that competencies are not aimed at specific products
but they contribute to competitiveness of a range of services or products. In order
for managers of an organization to translate skills into competitive advantage, the
skills have to meet three tests which include competitor differentiation, customer
value and extendibility. Customers’ interests need to be aligned with those of
organization in order for a company to gain a sustainable competitive advantage.
Strengths
Le Parker enhances the quality of its services through investing into
customer service enhancements and modern technologies in order to create and
maintain a large customer base which leads to high profitability. The Le Parker
management acknowledges that time is a resource which needs to be efficiently
utilized in order to gain competitive advantage. For instance, China is a growing
market for the hotel industry; In order to gain an edge over competition Le Parker
markets itself in China to the businesses whose employees frequently travel to the
US for business trips. The organization has engaged in a continuous improvement
of its activities in order to gain competitive advantage. Continuous improvement is
a philosophy which says that engineering, production and marketing excellence
normally need ongoing learning and attention (Davidmann, 87, pg 72).
In order to build a staff which meets the requirement of professional ethics
and interests of the organization, the Company provides effective administrative
support. Management of the organization has a clear vision so as to enable staffs to
get acquainted with roles that they need to play in order to achieve the vision.
Leaders are visionary and cheerful who see beyond the normal daily routine to a
vision of what should be attained through use of effective strategies. Administrative
support is an important aspect which needs to be employed within an organization
in order to achieve the desired goals. Improving motivation of employees is one of
important strategies which are used by management team to ensure that the
service staffs change their behavior to conform to organizational expectations. Room
service, valet, doormen and front desk employees are the ambassadors of the
business. Their attitude and behavior toward guests has the potential to make or
break the business. Employees are involved in decision makings of the organization
which influence their activities. This strategy boosts morale of employees which in
turn enhances efficiency in production. The human resource managers understand
that service staffs are part of the organization’s family hence they need to be
informed about the farewell of the organization. The company adopts management
feedback system which seeks feedback from managers, workmates or direct reports.
This strategy enables collection of multiple points of view on certain employees.
The management of Le Parker has discovered that the consumers are the
kings of the business hence they dictate what to be produced in the market. As a
result, the company constantly seeks feedback from its customers. Company uses
research and feedback data to determine the current and future needs of
consumers. Accordingly, the company has been able to improve their facilities and
services which meet the preferences of the customers. Customers’ interests need to
be aligned with those of organization in order for a company to gain a sustainable
competitive advantage. Organizations should aim at delivering high quality
products and services at prices which are lower than its competitors (Zepeda, year).
However, organizational managers need to understand that the main aim of being
in as business is to make a profit hence they should avoid making inefficient policies
which may cause abnormal loses to the organization.
Le Parker is situated in the central business district of New York City also
known as midtown. This location serves as a huge strength for Le Parker because of
its convenience. Some of the major tourist attractions like Central Park, Carnegie
Hall, Fifth Ave, and Times Square etc are within walking distance from the hotel.
The architecture of the hotel lobby is breathtaking with its towering ceilings and
beautiful light fixtures. The restaurants at the hotel also add value to the overall
experience. The restaurants at Le Parker include Norma’s a breakfast and brunch
spot. “…’astounding’ breakfasts and brunches are served at this ‘swanky’ Midtown
New American where the ‘good humored staff’ keeps its ‘power player’ crowd happy;
“(Zagat, year). Norma captured the headlines with its $1000 caviar omelet. Seppi’s
a French bistro is another restaurant which brings a lot of customers. Burger an all
American joint serving burger and fries has been a huge hit. It brings big crowds
during the lunch hours and is frequented by celebrities. The interior walls of burger
joint are filled with signatures of celebrities and other famous patrons. These
restaurants add a lot of value to the business by generating revenue and creating a
name for the hotel.
Companies which discover future markets before their competitors stand at a
higher chance of gaining competitive advantage in future hence able to reduce their
competitors’ market share. Organizations normally create new competitive space
when they acquire an opportunity horizon that goes beyond the boundaries of the
current market. Development and implementation of core competencies within an
organization depends greatly on the employee and management of the organization.
Top echelon managers are crucial actors who carry out the duty of developing and
nurturing core competencies of an organization. Top echelon managers need to look
beyond product and service standardization and lower costs so as to develop
effective strategies which are more competitive in the corporate world. Firms which
fail to identify their competitors move are not able establish competitive moves and
as a result, they often lag behind the target (Davidmann, 87 pg 122).
Weakness
Le Parker has many internal strengths but it also has some weaknesses. Le
Parker brand has been bought and sold by a number of different companies since its
start. These organizational changes can have negative effects on the employees and
takes a toll on their motivation. Le Parker also fails to fully utilize its strengths.
Le Parker’s strengths such as its location and popular restaurants are not
being used effectively to promote its main product the hotel. There is minimal
advertising done compared to its competitors. Valuable space is not utilized to its
full strength; for example the penthouse and the rooftop offer excellent views of the
park, but it is usually sits empty. The management fails to recognize the value
offered by this resource. Customer satisfaction is also affecting the performance of
the business. Although the hotel conducts customer reviews on its own, it pays
minimal attention to independent hotel review sites. The following is a quote from
a customer reviewing the hotel on one of the travel sites: “Eat at Norma and stay
somewhere else”.
Organizations whose capabilities are scarce, defensible, long lasting and hard
to imitate, normally form basis for surplus profit and competitive advantage. Le
Parker Meridian offers services which are easily imitable hence improving the
competitive advantage of its competitors. Organizations which identify and
implement effectively their core capabilities normally outperform their competitors
in consistency, speed, acuity, innovativeness and agility. These dimensions shape
the underlying capabilities which in turn define the growth path of the
organization. The effectiveness of an organization’s competitive advantage relies on
rareness and uniqueness of its capabilities and resources. If a company is less
imitable, its competitors are likely to face cost disadvantages in trying to imitate its
competencies. As a result, core competence is a critical source of effective and
sustained competitive advantage for organizational success and high economic
returns. The organizational culture, flexibility of strategy, effective technology
management and proper human resource management normally provide crucial
sources of core competency. It is upon the management team of organizations to
develop effective policies in order to translate the core competencies into a
competitive advantage of business (Hamlin, 00, pg 47).
One of the factors which contribute to the low occupancy rates at Le parker is
the pricing structure. The rooms are offered at reasonable prices but the guests
have to pay extra for amenities like wireless internet; while many of the
competitors include these amenities in the total price. In order to translate
competence into a sustainable competitive advantage, an organization needs to
establish and implement its value of chain appropriately. To have a sustainable
competitive advantage a firm does not only need to focus on better performance but
also focus on delivering genuine value to its existing and prospective customers at a
reasonable price. Any organization that focuses on delivering genuine value to its
customers, gains a dominant position in the market hence gain enough stability to
avoid being thrown out of the market by the competitors. Capabilities and internal
resources of an organization play a crucial role in enhancing competitive advantage
of an organization. In order for a company to build an effective competitive
advantage which cannot be easily eroded, it must develop and implement linkages
between the competitive advantage and capabilities within it which is impenetrable
and more complex in order to avoid imitations (Hamlin, 00, pg 59).
External Factors
Opportunities
Opportunities in the hotel industry may not seem like much due to the
current economic recession the United States in undergoing. However, there are a
few existing opportunities that Le Parker Meridien can benefit from and use as
path to surpass the slowdown it has been experiencing since October 2008. Some of
those opportunities constitute available resources in premises, emerging
international markets, attraction of new segments by developing new packages, and
chance to expand by buying out declining firms in the industry.
An opportunity that is of immediate reach to Le Parker Meridien is the
availability of resources in premises. Le Parker counts with available space and
workforce as to start a new venture on its own premises. One of Le Parker
conference rooms is located in a top floor which includes a full view of Central Park.
This park view conference room has of low rate of return due to low reservation
during the year. The conference room has ample space as to be converted into a high
scale restaurant or party rental hall. The view to Central Park can become very
attractive as an advertising tool. Putting either of these ventures to function would
not cost Le Parker extra expenditure as it can use its existing staff from Norma’s,
Burger Joint, or Seppie’s to start operating.
Emerging international markets is one opportunity Le Parker Meridien
should take advantage of. The United States undergoing an economic recession has
been leading to a decrease in the value of the dollar compared to other international
currencies. However, this has become an attraction to international tourist for “a
weak dollar has brought record tourism from overseas, especially to our city…This
influx of overseas visitors also helped the city capture the number one position in
total tourism spending last year,” (Fitzpatrick & Spinnato, 2008). The inflow of
tourists enlarges the market of tourists who visit the city and stay at hotels. With
the right marketing strategy, Le Parker Meridien can easily advantage from the
situation by targeting segments on this new market section.
“In 2007, more than 46 million people visited New York City, up more than 5% from
the 2006 all-time high of 43.8 million visitors. Through the end of 2007, the revenue
per room increased by 13.5% over 2006. About 8.5 million of the visitors were from
overseas, an increase of approximately 17%, and accounting for 20% of all overseas
visitation to the U.S. in 2007."
Stoler, 2008
As a way to attract new segments, like lower or middle class consumers, Le
Parker can consider the creation of new package that are affordable to these social
groups. Le Parker can use a percentage of its most affordable suites, Junior and
Tower, to create packages to lower and middle class consumers whether from
international markets or local. The packages can be used to attract new markets
using its surrounding attractions as part of the packages to make them more
appealing to customers. Among the group that forms Le Parker’s surroundings are
included The Museum of Modern Arts (MoMa), Columbus Circle Time Warner
Center, Carnegie Hall, and others.
The hotel industry has been in decline due to the economic slowdown the US
has been undergoing for the past few trimesters, (Farrier, 2009). The decline in the
industry has contributed to some firms tumble and be unable to stay in business.
This negative effect on some hotels can result in an opportunity to Le Parker. Le
Parker now has the chance to buyout declining hotels and use them as an
opportunity to expand and enlarger their market share by adding one more location
to its portfolio.
Threats
As there are existing opportunities in the hotel industry for Le Parker to
surpass their slowdown in sales, there are threats to the firm. Some of the threats
include but are not limited to current economic slowdown, intensive competition,
and unfavorable changing local government regulations. While some of these
threats can bring new opportunities to Le Parker like the economic slowdown, they
do not become less significant of threats for they can result on negative impacts to
the firm.
The actual economic recession the United States is undergoing has impacted
nearly every industry in the business sector. The hotel industry is not exception as
the “recession threatens to affect the domestic market,” (Fitzpatrick & Spinnato,
2008). The economic slowdown has affected the hotel industry as it affected the
financial sector and has kept the consumer confidence on decline. The decline on
consumer confidence means less spending by the customers.
“Hotel occupancy through March fell to nearly 50 percent and rates plummeted,
affected by a slide in business and leisure travel and an increase in room volume due
to a construction boom that’s turning into a bust for the local hotel industry.”
Solnik, 2009
Hotel occupancy has declined making the market for the remaining hotels in the
industry a fiercer competitor for the low demand available. The second threat to Le Parker
is the intensive competition. The economic slowdown has contributed to this threat
to be even greater. In an article published by the Long Island Business News, Mike
Johnston, general manager for the Long Island Marriot and president of the Long
Island Hotel and Lodging Association, was cited “everybody’s competing with
everybody… Demand is down,” (Solnik, 2009).
There are currently (number) hotels in New York City. Taking into
consideration that occupancy has declined by an estimated 50% the aggressively
competition becomes even greater for there are lower demands to be met. Two of Le
Parker’s competitors are Essex House and the New London. To captive the greatest
market share, Le Parker as well as its competitors creates strategies to build
product differentiation and competitive advantage.
Another external factor that can affect negatively Le Parker Meridien is
changing local government regulations. With demand being at a low point in
marker currently, some government regulations can affect profits and even the
break even point of Le Parker as those have not changed along the economy cycle.
One example is that “the state continues to collect a $1.50 New York City hotel
room tax,” (Solnik, 2009). This regulation affects Le Parker more now that it is
functioning at 25% room capacity and yet it is responsible to respond for the tax
collection of 730 rooms.
SWOT Matrix
Strength/Opportunities
 Use location as focus to advertise
immerging international markets
 User actual employees to staff
new ventures
 Use data from customers’
feedback to create effective
packages.
Strength/Threat
 Create advertising campaign
emphasizing its existing food
businesses as its competitive
advantage among competitors.
 Use existing sales department to
make sales calls targeting lowermiddle class prospects.
 Use changes in government
regulations to emphasize its
responsiveness to social
responsibilities. Like not using
paper to advertise.
Weakness/Opportunities
 Direct more effort on website to
attract emerging international
markets.
 Strategize on new ventures
possibilities to effectively utilize
all resources available.
 Create advertising campaign
targeting low-middle class
prospects.
Weakness/Threat
 Use outsiders’ customer reviews to
outperform competitors.
 Use underutilized resources to
create ventures that are
affordable and of interest to
prospects.
 Rearrange website to use a
powerful resource to compete in
the market.
References
Davidmann, M., 1987. Role of Managers under Different Styles of Management. Oxford:
Chandos Publishing Ltd.
Davila, E., 2006. Making Innovation Work. Wharton School Publishing
Farrier, J., 2009. Recent Hotel Industry Decline Leads to Unprecedented Buying
Opportunities for Opportunistic. Information Management Network. Retrieved May
9, 2009, from http://www.reuters.com/article/pressRelease/idUS111332+25-Mar2009+PRN20090325
Fitzpatrick, J. & Spinnato, J. 2008. 93rd Annual International Hotel/Motel &
Restaurant Show to Spotlight Innovations, Insights and Emerging Trends
New York City Hotel Newline. Vol. X No. 4
Hamlin, E. 2000. Organizational Change and Development. New York: Financial Times pg.
47-59
Hotel Industry Overview. 2007. Internal Revenue Service. Retrieved May 2, 2009, from
http://www.irs.gov/business/articles/0,,id=174494,0.html
James, E. (2009). A History of the Hotel Industry. Associated Content. Retrieved May 2,
2009, from http://www.associatedcontent.com/pop_print.shtml
Miller. F., 2009. History of Hotels. Economic to Extravagant. Retrieved March 31, 2009,
from http://www.searchandgo.com/travel/hotels-history.php
Solnik, C. 2009. Hotels take a hit from economic slowdown. Long Island Business
News. Retrived May 21, 2009 from http://libn.com/blog/2009/05/21/hotelstake-a-hit-from-economic-slowdown/
Stoler, M., 2008. City's Hospitality Industry Inspires Cautious Optimism.The New
York Sun. Retrived May 21, 2009 from http://www.nysun.com/realestate/citys-hospitality-industry-inspires-cautious/70534/