Travelodge is a leading brand that was created in the year 1985. From that time onwards, the company has grown into a huge business and now has 200 properties in UK and Ireland. The company provides 10,000 bedrooms to various cities across the whole of UK and Ireland. They opened their first lodge in the year 1985, in Barton-under-Needwood. The place was a 20 bedroom building. Today it has business not only in Europe but also in other parts of the world, including the United States, Australia, Spain and New Zealand.
Since the time of its implementation, the company has undergone a great transformation opening more than 500 properties. They have moved from the roadside chains of hotel to become the largest as well as the fastest growing and the most cost conscious brands in the hotel business. It was revealed in their website that over 16.5 million people lives in the hotel every year. The hotel also boasts that the queen of England Queen Elizabeth had stayed in their hotel. The company employs 6000 staff in the Ireland, Spain and England. The company has opened its first budget hotel management apprenticeship programme for those who will leave schools. It was initiated in the year 2011 in the month of April (Wyndhamworldwide.com, 2015).
It is seen that budget accommodation sector of the UK has become very competitive over the years and more so during the last 15 years. The situation is so because more and more competitors are entering the business. The company has 22 % market share. The company is heavily investing in the market so that it is able to retain its current market position and also to increase the market share (SWOT analysis. 2015). The company is into two kinds of hotel services. The first one is for the family segment who seeks accommodation for the purpose of leisure. The second one is for the business people who hire or seek accommodation for business meetings or conferences at convenient locations.
The company is heavily using the digital media to drive its business. The company has its website which provides online bookings for the people. The company has adopted a policy to sell their services through the email also. They held online surveys as a sales promotion tool.
External factors-Macro analysis
The Macro analysis can be done based on the PEST analysis
Political factors- the political factors play an important role in the business. The union of the company as well as the taxation policy of the government plays an important role in the business. The company does not have any control on these factors. Moreover the political factors give rise to legal issues (PEST Analysis. (2011).
Economic factors- the company provides cheap rates of rooms to the people. the economic condition of the company has not influenced the company very much as the company still now offers rooms at £ 60.90 with the inflation rate rising at the rate of 3.5% every year.
Social factors- with the increase in the use of internet, the company have started the use of web based technology where the people will be able to book the rooms over the net as well as cancel the reservations. Moreover it encourages the people to book at cheaper rates.
Technological factors- the development in the technology has developed the e-commerce market in the UK. The increase use of e commerce has made the company develop a personalized relationship with the customers. People are becoming more aware of the company due to the advancement.
External factors-Micro analysis
5 forces analysis of the company can be seen by:
The threat of entry in the market- the market poses the threat to the company when the new company enters into a market. The company faces steep competition from the competitors who were there in the market as well as the new entrants. There are a few competitors of the company like Accor, Intercontinental Hotel Group PLC, Premier Inn etc who posses threats to the Travelodge (SWOT analysis and PEST analysis. 2015).
The threat of substitutes- there are various hotels in the market that provides the same kind of offers and services. The company needs to incorporate changes that will make the company stand out in the market like travel accommodation along with pick up and drop which will make the people feel good McCabe, S. (n.d.).
The power of the supplier- there are many suppliers that supply materials to the hotels. Thus the prices and the quality are the main issues when the hotel is making a purchase decision Jauhari, V. (n.d.). Though it must be kept in mind that that the suppliers do not influence the decisions of the hotels as they are able to pick and select from a large number of suppliers.
The powers of the buyers- the size of the customers who buy the services of the hotel are the main influencers of the company. The company must continue to give cheaper rates to the people so that the people are attracted to the hotel. The bargaining powers of the buyers also a threat to the company (Wyndhamworldwide.com, 2015).
Internal factors-Value chain analysis of the company
The value chain is a systematic approach to determine the competitive advantage of the company. In t his it is seen that there is a chain of actions that ultimately add to the value of the company. The primary activities include:
Inbound logistics- the way the company chooses to the space where the hotel will store the products needed by the company. Travelodge sees that the right components are delivered to the company, so also the suppliers give the right amount of products to the company
Operations- the company operations has been divided into three categories, the food, the room services and the receptions. The company sees that the best food is supplied to the people from good restaurants. The room services are also top class as the rooms are fitted with modern fittings (Tsiotsou, R. and Goldsmith, R. 2012).
Outbound logistics- travelogue has a unique way of outbound logistic, where the customers or the people will get cheapest budgeted hotel rooms and services. Due to its good outbound logistics the company is able to hold its position in the economic downturn.
Marketing and sales- the company sees that the company uses products and services that are in demand by the people (Pride, W. and Ferrell, O. (n.d.). The company uses sales promotion in the net to attract the customers and provides cheap rated hotel rooms to the people. The company is saving the cost on advertising by doing its promotion on the email. The company has made the rooms in the hotel Wi-Fi enabled; more over the company gives rooms on the choice of the children as well and provide for them cuddly toys.
Services- Travelodge is generally focusing on its services of pre-installation and so that they have to pay less effort on their after sales service thus they don’t need to handle the complaint of the customer (Travelodge.co.uk, 2015).
Support activities- the company is supported by the IT as well as the web based technology to run their activities. They have well developed website to promote their functions. Thus they have the support from the big IT companies.
· It owns groups of hotels
· There are 500 hotels in brand
· Domestic market
· Web technology
· Small business units
· Future uncertainties
· New products and services
· New markets
· Growing demand
· Growing economy
· Increase cost of the raw materials
· Increase in the labor cost
· Change in the global economy
(STRATEGIC PLANNING AND SWOT ANALYSIS, 2015).
The company decided to introduce a number of new strategies in the future. The company is planning a £57 million value of renovation in the sites of the company. The company will more advertise in the email so that the advertising coat of the company reduces. Travelodge is looking to update the services that it provides, such as providing a good quality bed and provide free Wi-Fi in the rooms (Morrison, A. 2013). It is hoped that these new measures will draw business from medium to small enterprises and also will boost in-bound tourism.
The marketing mix
Product- the company has well diversified products. The company provides hotel room services to the people to many countries around the world with new innovations in the products. Their products are changing day by day as they are increasing their innovations of the products.
Price- Travelodge provides cheaper r ate hotel rooms to the people. The price is less compared to the others in the market so as to attract the customers. Moreover the company provides attractive discounts if booking are made over the internet Codita, R. (2010).
Place- the company has targeted the customers who are on the move so that they can rest and continue their journey. Thus the hotels are situated on convenient locations. Travelodge can be found nationwide on motorways and ‘A’ roads in towns and city centres. They are also located near tourist attractions and areas of natural beauty.
Promotion- The introduction to the web was about providing information to a new worldwide audience. In the early days this was achieved through the provision of an on-line brochure. Alternatively the user can select from a drop-down list which area and town is required; the lodges available in that area are shown (Tallman, S. (2009).
Having selected the most suitable Travelodge, the potential customer can then find out about the number of beds available and make an online reservation. Nothing could be simpler. Once the customer has selected a Travelodge they are then provided with the phone number of the lodge, should they need further information or not (Pedersen, T. 2014). Thus the company has adopted a policy so as to provide the people with a world class experience. This is done so that the people remain loyal to the company. The mission of the company is to attract the largest customers by providing better services.
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