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Global Economic Trends: Travelodge Hotel UK Ltd Add in library

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Questions:

1. Analyse significant macro-economic changes that have taken place in the Travelodge Hotel UK ltd ’s external environment?
 
2. Evaluate opportunities and threats posed by the changes you have identified; and
 
3. Discuss how the Travelodge should respond to the changes you have identified, demonstrate appropriate coverage, critical appreciation and evaluation of relevant literature, demonstrate a critical understanding of key concepts and the application of theory to practical solutions?
 
 

Answers:

Introduction:

In order to meet the quest of pleasure expansion of the hospitality chain, in the last few years all over UK has increased intrinsically. Amongst them Travelodge Hotel Limited has expedited its business. A report of Yap and Kenyon (2010) critically state that Travelodge has acquired £27 million of profit in 2010 from 480 hotels in all over UK, Spain and Ireland. Here, in this section of research work, the researcher tries to critically analyze the external environment and the possible opportunities and threats that the organization is being faced.

1. External Environment Analysis of Travelodge Hotel:

For the external environment analysis, application of PEST is called to be the most significant tool which helps in ascertaining the different issues being faced by the organization. The PEST analysis includes the attributes like political, economical, social and technical issues.

Political Issues: As UK is having the free business market, the approach of the government towards the development of this industry is literally effective. Application of new immigration policies has caused a significant growth in the business of Travelodge Hotel. The Digital Economic Act of 2010 has enabled Travelodge Hotel to let its guests cherish Wi-Fi connections while staying in the hotel (Go and Govers, 2011).

Economical Issues: Travelodge Hotel in the last few years has gone through an extensive economic crunch. In 2011 the hotel had recorded a debt of £517m (Heaton, 2012). The hotel has incurred a loss of £56.8m in 2013. The debt has increased intrinsically which towards the end of 2013 accounted as £484.5m (Cadle et al. 2014). Having been under teething competition with the other hoteliers of Europe the company is gradually aging behind. But during London Olympic the hotel has bagged an economic boost. In the current days the company is focusing on the C and D grade of market.

Social Issues: London Olympics seems to have resurrected the hospitality management. Travelodge Hotel offers its guests a friendly and relaxing suite which also helps the company to be developed (Thomas, 2014). To cope up with this economic crunch more focus is being given on the mediocre Britons. The company is sophisticate in its approaches to attract more customers if the market place.

Technical Issues: Travelodge Hotel, in these days, lets the customers book their suitable suits online and even from the mobile as well. It maintains a customer friendly website which focuses on the current offers being provided by the organization. The site also lets the budget conscious customers to compare the rate with the other hotels of UK.

 

2.  Evaluating the Opportunities and Threats for Travelodge Hotel:

Eyeing on the current organizational and market situation Travelodge Hotel seems to have distinctive opportunities in the business development. At the same time, the threats are also convenient factors which throw challenges for the business development of Travelodge Hotel. In the following section the researcher is going to delineate the threats and opportunities.

Opportunities: Travelodge Hotel business seems to be UK centric. Hospitality business in the other countries of Europe has received an immense boost. Neill et al. (2013) can be quoted by saying that Travelodge Hotel is missing a huge number of customers as it has not expanded its business perimeter. Countries like Switzerland, Norway, Spain and several other countries has become a hotspot of the tourists. By extending the business in these countries Travelodge Hotel can expect to attain a proficient business.

Travelodge Hotel can also expand its partnership with the other hospitality franchises working in the other countries. At the same time, application of the smart marketing objectives also appears to be literally helpful for the development of the marketing objectives (Hetherington, 2012). This also helps in bagging more reputation for the organization as well. Once the marketing objectives are fulfilled Travelodge Hotel can also expect to overcome the business clumsiness. It is also helpful in attracting more customers.

Threats: Travelodge Hotel seems to face the teething pangs of competition. In order to compete with the other luxurious hotels Travelodge Hotel is gradually lagging behind. In these days people generally seeks for extensive pleasure which Travelodge Hotel is failed to cope up with. Competition among the other hospitality sectors has also increased (Trkay et al. 2011). The gross economic decline in these days has also result a challenge for Travelodge Hotel. Customers prefer more sophisticated hotels which appear to be more attractive to them.

As Travelodge Hotel seems to be only UK centric, it is losing a huge business which can be gathered by expanding its business in the other countries. Promotion of the hotel is not so much affluent and attractive as well. Therefore, foreign tourists are not acquainted with the name of Travelodge Hotel. Therefore, they do not feel interested of booking a suite. Preference for them gradually shifts for the luxurious hotels like Hotel Hilton and others.

3. Critical Evaluation of the Necessary Changes:

Expansion of the business in other countries is identified to be the main change needed to be applied for Travelodge Hotel. Application of change management in this approach is literally significant. Application of strategic management process is literally effective which seems to be effective in order to fetch more customers of the market. To attain the benefits of the competitive market advantages, Travelodge Hotel has to make the proper market research. The need of identifying of the policies being applied by other hotels is literally important. For ascertaining the market place, analyzing the Porter’s Five Force strategy is literally significant. For the business purpose Travelodge Hotel has slashed down the charges collected from its guests. But it barely has result in gaining any market advantage. Go and Govers (2011) have critically stated that the common people are barely ready to compromise with comfort and luxury. So for Travelodge Hotel it is an open opportunity to provide an immense service to the customers. Expansion of the hotel branches in the different tourist hotspots across Europe is able to bring changes in the economy of Travelodge Hotel. On the other hand, brand loyalty also appears to be helpful for Travelodge Hotel to expand its business sophistically.

Conclusion:

Throughout this research study the researcher has shed light on the different approaches of external market strategies applied by Travelodge Hotel. At the same time, approaches of threat and opportunity have been discussed by the researcher. The researcher has also recommended the approaches following which Travelodge Hotel can expect to develop its business.

 

Reference List:

Books

Go, F. and Govers, R. (2011). International Place Branding Yearbook 2011. Basingstoke: Palgrave Macmillan.

Cadle, J., Eva, M., Hindle, K., Paul, D., Rollason, C., Turner, P., Yeates, D. and Cadle, J. (2014). Business Analysis. Swindon: BCS Learning & Development Limited.

Journals

Heaton, D. (2012). Business in the Big Picture: Managing for Sustainability. J Bus Hotel Manage, 01(02).

Hetherington, A. (2012). Threats and opportunities. New Phytologist, 197(1), pp.1-2.

Neill, N., Dev, C. and Yanagisawa, H. (2013). Hotel assets: an analysis of brand attributes, franchise fees, hotel age and performance. International Journal of the Built Environment and Asset Management, 1(2), p.139.

Trkay, O., Solmaz, S. and Azengl, S. (2011). Strategic Analysis of the External Environment and the Importance of the Information: Research on Perceptions of Hotel Managers. Procedia - Social and Behavioral Sciences, 24, pp.1060-1069.

Yap, Y. and Kenyon, A. (2010). Significant Website Attributes in the UK Hotel Industry: An Exploratory Study. International Journal of Management Cases, 12(2), pp.582-594.

Website

Thomas, N. (2014). Travelodge still £57m in the red as it recovers from 'annus horribilis'. [online] Telegraph.co.uk. Available at: https://www.telegraph.co.uk/finance/newsbysector/retailandconsumer/leisure/11078505/Travelodge-still-57m-in-the-red-as-it-recovers-from-annus-horribilis.html [Accessed 10 Mar. 2015].

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