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Fairmont's Commitment to Growth and Expansion: A Brief History

Question:

Discuss about the Operations Management of Material Requirements.

The first Fairmont hotel was opened in 1907 in San Francisco (Fairmont, 2017). The old facility soon developed to become the city’s ideal location for most presidential visits, accommodation and political meetings (Fairmont, 2017). Following its establishment, the name Fairmont quickly came to be associated with place of the occasion, which was the auspicious beginning that gave birth to the Fairmont Hotels & Resorts brand (Fairmont, 2017). Fairmont has majored in its commitment to growth, expanding its hospitality operations into a global industry leader with some services, projects, and existing hotels (Fairmont, 2017). The firm has built an international portfolio of award-winning properties aimed at expanding by currently having more than seventy hotels worldwide.

Fairmont’s primary mission is to become the best luxury site for customers, by offering the best dining and accommodation services (Fairmont, 2017). It also aims at becoming the best destination, hosting various events including conferences and weddings. With the rebirth of Fairmont Century Plaza targeted to spend approximately $2.5 billion in Los Angeles, the firm will attract even more prominent individuals, with the properties performing the best in the respective market The chain, however, has continued to face competition from other hotels such as Rosewood, Kempinski, The Langham Hotels and the Four Seasons among others (Owler, 2017). For a firm to be competitive in the hospitality industry, it must be able to demonstrate excellent customer service, which ranges from service excellence, reduction in wait times and producing consistent, high-quality meals and services. Customer service is a vital aspect of operations management; therefore, efficient operations management is of critical importance to the hotel industry.

Fairmont chain would use the relative type of location to expand to new markets, whereby the hotels are located about other locations, for example, the spectacular sceneries offered by the three Pillars of Egypt and the history Century Plaza that is situated in the middle of Century City in Los Angeles (Owler. (n.d.). Revitalization of the latter hotel which is to open as Fairmont Century Plaza which will be added as a landmark hotel in the market of US will expand and lead to the growth of the luxury space ("About Us - Fairmont Hotels & Resorts - Fairmont," n.d.). The expansion of Fairmont chain into the roots of Southern California would see the firm reap more profits ("Fairmont Hotels & Resorts to Manage the Historic Century Plaza Hotel in Los Angeles - Fairmont Hotel," n.d.). Fairmont considers the location of other things before deciding if to expand its hotels in the region. The landmark of Los Angeles, for example, is near the most known neighborhood of 20th Century Fox studios, surrounded with over ten million square feet next to offices of high class, restaurants, and Beverly Hills which is among the areas in the United States with the highest grossing.

Mission Statement and Competitive Strategies

Additionally, the geographic location of Fairmont chain close to main tourist destinations lures many customers to visit the hotels. For example, travelers may opt to attend Fairmont Nile City’s Diplomatic Suite located in Egypt, to have a panoramic view of the River Nile and the Pyramids (Owler, 2017). The scenery including the suits which are styled with Art Deco furnishing is significant attraction sites that help boost the number of customers willing to spend part of their holidays in this hotel. Fairmont strategic location takes into consideration of the population, which is considered to be the potential customers.

 Fairmont’s chain located in the cities and close to the manufacturers and suppliers of products helps reduce the company’s costs. The reason is that they cut on transportation costs-which widely vary depending on the distance from the supplier-due to their proximity to both the bulky raw materials and softer suppliers ("Resort Accommodations at Fairmont Hotels & Resorts - Fairmont Hotels & Resorts - Fairmont," n.d.). The location of Fairmont can as well be termed a reason for the high generation of revenue by the firm. The idea behind this is due to the vast number of customers who gain access to Fairmont chain.

Fairmont chain has got specific strengths that enable it out-do their competitors in the hospitality sector. First, they have got highly skilled employees ("Overview - Fairmont Hotels & Resorts - Fairmont," n.d.). The company encourages secondary and post-secondary learning programs to develop the best practice. Nonetheless, donations by the firm have aided them to acquire qualified workforce that translates to delivering best quality services to the customers (Heizer, Render and Griffin, 2016). Second, is the high growth rate of Fairmont, where, as indicated in their website, has many of its locations where their buildings were the first to be elected in developing cities for example across North America. Hence, they are termed to have grown along with the early communities. Their buildings are as well marked as city landmarks.

The growth market share matrix is designed to assist with the long-run strategic planning, to help an organization consider opportunities for growth by reviewing their portfolio products with comparison to those of their competitors. Fairmont chain main competitors are Shangri-La Hotels and Resorts, Luxury Hotel Experts, and Rocky Point Ventures. Fairmont chain is concerned with four factors that make it successful; the company focuses on customers as well as the environment so that it achieves its goal of being environmentally friendly ("Competitive Advantage," 2012). They also aim to maintaining the best quality of their products including their meals and services offered. They focus on innovation where their buildings were first to be erected, hence they are termed to have grown with the community, and lastly they concentrate on responding to their customers by hiring the best workforce. Nonetheless, their competitors adopt different or similar strategies, which if they take into account, they can be in a position to plan for future growth to gain competitive advantage.

Operations Management: Key to Excellent Customer Service

Shangri-La Hotel, for example, their strategy of marketing aims at delivering best quality services, having affordable room rates, and returning benefits to the customers, as well as giving the best competitive rates guarantee to their clients ("Essay: Competitive Strategy of Shangri-La Hotel | Termpaper Queen," n.d.). It also adopts a loyalty program which is known as Golden Circle Guest Recognition Program constituting of three levels which vary depending on the client’s stay in their hotels, thus enabling it to return even more to its customers. If Fairmont chain considers such strategies when determining their plan for growth, they can be in a position to gain a better competitive advantage over their competitors.

A PEST analysis is a framework for analyzing the environmental factors-usually external factors when conducting a market research. It is used when undertaking a market growth. The chain targets at expanding its locations significantly considering both the political,economic, social, and technological factors. First, it has regarded expansion of its hotels to Nigeria, an African nation ("Fairmont Continues Expansion Into Nigeria: Signs New Luxury Hotel in Abuja," n.d.). The hotel will be situated in Abuja town thus fulfilling the rising demand for luxury in the country and help in shaping the social-culture of this oil-producing nation. The stable growth of the country makes it a world-class destination for leisure and travel. The technology in the city, with the expanded road network, offers excellent access to the hotels.

Second, considering the economy and technology used in China, Fairmont has targeted to open Fairmont Wuhan by 2017. The hotel is intended to house both business and leisure travelers ("Fairmont Hotels & Resorts Continues its Expansion in China with Fairmont Wuhan - Fairmont Hotels & R," n.d.). The selection of Wuhan, capital to Hubei Province, is due to consideration of its economic growth and level of technology, being a transportation hub, financial, as well as education center for Central China, making the hotels to be easily accessible. The location of the hotels will be close to the Hankou Railway Station, the Tianhe International Airport, and the speedy railway system. All these considerations to the technological advancement of China offer excellent accessibility to the Fairmont hotels. By expanding to this location in different cities, the Fairmont hotels will have expanded into new markets, tapping new customers, hence boosting their annual revenue. Thus, conducting a PEST analysis is essential as it identifies the best place to locate their hotels for accessibility and other reasons.

References

About Us - Fairmont Hotels & Resorts - Fairmont. (n.d.). Retrieved from https://www.fairmont.com/about-us/

Competitive Advantage. (2012, November 22). Retrieved from https://christiansaitportfolio.wordpress.com/management-environment/competitive-advantage/

Essay: Competitive Strategy of Shangri-La Hotel | Termpaper Queen. (n.d.). Retrieved from https://termpaperqueen.com/essay-competitive-strategy-of-shangri-la-hotel/

Fairmont Continues Expansion Into Nigeria: Signs New Luxury Hotel in Abuja. (n.d.). Retrieved from https://www.marketwired.com/press-release/fairmont-continues-expansion-into-nigeria-signs-new-luxury-hotel-in-abuja-2057171.htm

Fairmont Hotels & Resorts Continues its Expansion in China with Fairmont Wuhan - Fairmont Hotels & R. (n.d.). Retrieved from https://www.fairmont.com/press-room/articles/fairmont-wuhan/

Fairmont Hotels & Resorts to Manage the Historic Century Plaza Hotel in Los Angeles - Fairmont Hotel. (n.d.). Retrieved from https://www.fairmont.com/press-room/articles/fairmont-century-plaza-hotel/

Fairmont. (2017). Environment & Ecosystem. Retrieved October 9, 2017, from Fairmont

Fairmont. (2017). Fairmont Chateau Laurier. Retrieved October 7, 2017, from Fairmont

Heizer, B. Render and P. Griffin. (2016) Operations Management: Sustainability and Supply Chain Management, Second Canadian Edition, ISBN-10: 013438430X • ISBN-13: 978013438430 ©2017 • Cloth Bound with Access Card Published 01/20/2016 • Instock

Overview - Fairmont Hotels & Resorts - Fairmont. (n.d.). Retrieved from https://www.fairmont.com/corporate-responsibility/environment/

Owler. (2017). Owler Corporation. Retrieved October 7, 2017, from Owler Website:

Owler. (n.d.). Retrieved from https://www.owler.com/iaApp/171396/fairmont-hotels---resorts-competitors?onBoardingComplete=true

Owler. (n.d.). Retrieved from https://www.owler.com/iaApp/171396/fairmont-hotels---resorts-competitors?onBoardingComplete=true

Resort Accommodations at Fairmont Hotels & Resorts - Fairmont Hotels & Resorts - Fairmont. (n.d.). Retrieved from https://www.fairmont.com/about-us/ourhistory/

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