Strategic Implementation Of W Hotel Barcelona: SWOT Essay, Opportunities, And Threats.

Discuss about the Strategic Implementation of W Hotel Barca.

W Hotel Barcelona, popularly known as Hotel Vela, is a posh hotel located on the expanded shore of port of Barcelona in the district of Berceloneta, Spain. The hotel is managed and marketed under the brand of W Hotels, by Starwood Hotels and Resorts hotel chain. The hotel was started in the year 2009 and has one of the leading loyalty program where about 50% of the guest who check in at the hotel extend there stay beyond the initially booked number of days or hours. The hotel is popular with Millennials who fancy exhilarating experiences as opposed to traditional ways of doing things.

Hotel industry is a fast paced service industry where consumer behaviors are dynamic and fluid in nature. More so, International hotels like W Hotel in Barcelona, who serve international clients, are subjected to varied consumer tastes owing to the fact customers came from different parts of the world with different preferences and tastes.  With the ever improving competition in the service or Hospitality industry such as hotels, occasioned by technological advancement and dynamism of customer demands, it is important that strategies being employed by these players in the market, be looked at and analyzed with an aim of highlighting its pros and cons for future improvement or development. (Abrate and Viglia, 2016)

In view of the above, this report will seek to analyze the business strategy as employed by W Hotel Barcelona with the view of critically evaluating it for the purposes of contributing to the knowledge pool on the effective hotel business strategies that can be used by W hotel Barcelona as well as other hotel brands for growth and development.

The city of Barcelona has a population of over 3.7 Million individuals with 62% of this population roughly falling between the age of 25 to 69 years. This is a strong age group with probably 90% of them, in meaningful employment or retired with savings and investments as a source of living. The W Hotel can take advantage of this opportunity to market to this group of people and increase its customer base. This coupled with the fact that Barcelona as a city attracts a lot of sporting activities many of them being high net worth can be great booster to the revenue line of the W Hotel.  (Enz, 2010)

SWOT analysis of W Hotel Barcelona

The hotel can also take advantage of the fact that it belongs to the Starwood resort chain of hotels, a brand which has already established name for itself in hospitality industry especially in US and other parts of the world. It would then take less time and energy/resources to introduce W Hotel Barcelona to someone who already know other W-series hotels managed and marketed by Starwood group.

The concept of vacation ownership is taking traction in the world of hotel and hospitality industry, where vacation lovers would ‘own’ a room or suit in a hotel (or anywhere else depending on the taste and availability) for certain period usually in same interval of time. The hotel can take advantage of this new trend to contribute on its revenue baseline.

With reduced purchasing power in the global economy, HW hotel can leverage on this by marketing to the potential clients’ about its great discount programs on loyal customers to built a stream of repeat customers for repeat business that would go a long way in ensuring economic stability of the hotel and financial sustainability.  (Aznar et al., 2016)

The existence of other hotels in Barcelona of similar ratings as W Hotel Barcelona such as Hotel Arts Barcelona or indeed other mid tier emerging hotels, pose a threat to W Hotel endeavor to get more customers and boost its revenue baseline.

Constant political instabilities associated with other markets where W Hotel Barcelona has sister hotels such as in India, may lead to the whole group of Starwood having weak financial muscles to effectively support its operations in various locations including W hotel Barcelona. This operation could be renovations and addition of trendy artistic works in the hotel.

The luxury brand marketed by innovative marketing strategies such as discounts and social media and digital platforms cuts a market niche for W Hotel Barcelona. This unique position in the market ensures that certain clique of customers’ medium and upper class will always consider W Hotel Barcelona as an option while making a decision on which hotel they can visit for meals and/or drinks while on normal duties or vacation.

With increasing forays into foreign market W-series hotels including W Hotel Barcelona increases there clientele base where it can source visits whenever people from other parts of the world where there is a W hotel visit Barcelona for sporting reasons, vacation or any other duties for that matter, can easily consider W Hotel Barcelona for stay and /or meals and drinks. This is evidenced by existence of over 1,000 hotels in over 100 countries across the world serving in 9 categories of brands. This forms an extensive network which is a strong facet for W Hotel Barcelona for networking and indeed other sister hotels. (Ivanov, Ivanova and Magnini, 2010)

Opportunities

W Hotel building and design is LEED certified, a US based rating that measures environmental performance of a building with an aim of sustainable environment. This improves customers’ loyalty to W Barcelona given the recent agitation across the world on the need to conserve the environment. This coupled with the fact that the design of the hotel building is very attractive, located at the extension of the shore of port of Barcelona and designed by one of the world’s best architects, ensures that W Barcelona appeals to many consumers who like fine things in life and there aren’t too many people who resist fine things.

Strong social media and digital campaign offers W Barcelona a firm platform where it can clients especially the young and tech savvy on Instagram, Twitter, Facebook among others social media platforms. This customer engagement makes people aware of the great discounts and ambience offered at the W Barcelona, to which a number of them can like. It also ensures the hotel remain in sync with the current trends in the consumer behavior through feedbacks received on social media handles and comments side of the any other digital post from the hotel.  (Rutherford, 2007)

W Barcelona hotel is generally pricy hotel with minimal provisions for budget customers. This means that a lot of consumers are priced out of the services offered by the hotel even though they would have liked to sample what the hotel has to offer. This is therefore a weakness that the hotel needs to look into given the current state and the direction of the world’s economy. The economic recession witnessed a few years ago and the recent fall in prices of the crude oil and its products meant that the purchasing power of many consumers in the world got reduced.

The W hotel series have strong presence in the domestic market or the country of origin I.e. USA but still little presence across the world despite the number of hotels it has compared to the landmass. W Barcelona would then need to work extra harder to ensure that many people in Spain are aware of the hotel in a country whose 80% of the population reside in the urban areas having a number of high rating hotels and restaurants in operation in the respective localities. (Rodríguez-Algeciras and Talón-Ballestero, 2017)

First, with the location of the hotel on the shore of the port of Barcelona which offers the visitors nice breezes and beautiful overview of the endless blue water body horizon, the hotel has sought to capture the imagination of luxurious clients who want extra ordinary hotel experience. This coupled with beautiful design of the hotel building along with creatively designed hotel rooms, suits, vibrant lounges, amplified entertainment and innovative cuisines and cocktails, ensures that the hotel indeed attracts and retains the high end and luxurious clients it targets. This strategy lives up to the hotel billing and client expectation when it says “Escape to where iconic design and contemporary luxury set the stage….”

Threats

Strong social media strategy ensures that the W Barcelona remain in touch with it clients with regards to new trends and feedback. This is a very important aspect because without being in touch with your clients you may loose them to competition. With competition from other hotels in the hospitality industry it’s paramount that W Barcelona stay connected with her clients.

Having a hotel building that is not only creatively designed to look like a sail but also environmentally conscious goes a long way in building the customer loyalty. Many consumers will want to be associated with a venture that is mindful about the environment and is doing the needful to see this aspect succeed. With this emotional and conscious connection between the W Barcelona and he clients, the hotel will definitely enjoy a huge percentage of repeat business. (Zhao, 2008)

In service industry such as hotel the business model must deliver on the experience the client will have on the services offered. Borrowing a leaf from service marketing mix theory, where the theory postulates that in service industry there are 7 P’s which are important in marketing developing marketing strategies, namely Product, Price, Place, Promotion, People, Process and Physical evidence. W Barcelona has greatly employed this all these aspects to create a viable hotel business model. The product which is the luxurious services offered by the hotel is top notch. The prices are also within the range of the targeted group of consumers while the promotion is laced with one of the leading promotional discounts in hotel industry. The Place of location i.e. at the shore of the Port of Barcelona is very strategic and supports the overall business model of the hotel. (Hotel management and administrative practices, 2014) Its qualified staff, the people, with experience in innovative cuisines laced with local culture ensures that the hotel appeals to both local and international clients. The processes of service delivery i.e. ensuring that customer expectation are met or exceeded ensures that the hotel not only remain in business but also grows and develop in it. Finally, the Physical evidence of the hotel, the creative designs, social and digital media presence gives the mental picture of the hotel services that ensures the clients have something tangible to see about the invisible yet classy services of the hotel. Therefore combining all the aspects of the strategies employed by the hotel points to a viable business model that appeal to the consumers who continue to troop to the hotel to sample what it has in store for them. (Hotel management and administrative practices, 2014)

Strengths

This report has utilized a number of strategic management theories by critically analyzing and evaluation the SWOT analysis theory to identify W Hotel Barcelona’s business strengths, weakness, opportunities and threats for the purposes of painting a picture of the business strategic management. The paper has also made use of the 7 P’s service marketing theory, to analyze how the hotel has been able to build a viable business model through its business strategies management. (Zhao, 2008).

Highlighting on the strengths, weakness, opportunities and threats facing the hotel, enabled the management of the hotel to improves on where it’s doing well like providing luxurious services and institute measures to correct aspects where the facility isn’t doing well such as not having a budget options for clients priced out by the expensive luxurious services offered by the hotel. Overall, these changes lead to improved business for the hotel. (Mauri, 2012)

Conclusion

In conclusion, it is important that those in service industry business such as hotel industry consider having a wider ranger of potential consumers to increase it chances of continuous business and sustainability programs. While at it, the service industry must deliver best and unique experience to the clients by offering customer centered services. The reason for this is that, nearly all the products are similar, the cuisines and cocktails can be replicated elsewhere but it is very hard and challenging to replicated extremely good customer service and experience as this is personalized and is build for many years before achieving perfection through feedback obtained through customers and trainings to impart this special features in the workforce. A great customer service is also a factor of human resource hiring process and so, to have it replicated is quite hard for any player in the market. This is where hotels and more so W Barcelona should continue to develop and grows to remain competitive and remain in business.

The organizational managers should be cognizant of the fact that the world economy in general isn’t growing per se. looking at the OPEC countries for example (Oil Producing and Exporting Countries); the overall economic picture painted is that of reduced purchasing power. To be able to adjust to these conditions early enough it is better that hotel cast a wider net for consumer market as opposed to specialization in one or few to clique category that isn’t that has instability issues. It is possible to still provide for all the markets without compromising on quality of services by say, W Barcelona having different lounges where different types of clients can fit in, much like in the airline business where there is first class travelers, business and economy class all travelling in the same plane.    

References

Abrate, G. and Viglia, G. (2016). Strategic and tactical price decisions in hotel revenue management. Tourism Management, 55, pp.123-132.

Aznar, J., Sayeras, J., Galiana, J. and Rocafort, A. (2016). Sustainability Commitment, New Competitors’ Presence, and Hotel Performance: The Hotel Industry in Barcelona. Sustainability, 8(8), p.755.

Enz, C. (2010). Hospitality strategic management. Hoboken: Wiley.

Hotel management and administrative practices. (2014). 1st ed.

Ivanov, S., Ivanova, M. and Magnini, V. (2010). The Routledge handbook of hotel chain management. 1st ed.

Lye, L. (2010). Sustainability matters. Singapore: World Scientific.

Marketing and management sciences. (2010). London: Imperial College Press.

Mauri, A. (2012). Hotel revenue management. Milano: Pearson.

Rodríguez-Algeciras, A. and Talón-Ballestero, P. (2017). An empirical analysis of the effectiveness of hotel Revenue Management in five-star hotels in Barcelona, Spain. Journal of Hospitality and Tourism Management, 32, pp.24-34.

Rutherford, D. (2007). Hotel management and operations [electronic resource]. Hoboken, N.J.: Wiley-Blackwell.

Zhao, J. (2008). Handbook of hospitality strategic management. Amsterdam: Elsevier.