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PESTLE Analysis of Park Hyatt Sydney Hotel

Question:

Create a one-year strategic plan for your ‘HOTS’ (Hotel Operational Training Stimulation) hotel.

The aim of the report is to create a one-year strategic plan for the selected ‘HOTS’ hotel. The hotel that has been selected for the analysis is Park Hyatt Sydney. The report includes the critical analysis of the micro and macro environment factors that affect the strategies of the company. Moreover, it includes the intended overarching strategy will translate into a strategic direction for the three level of management in the company. It also includes three theoretical models such as analysis of the hotel environment (macro and micro) and the strategic recommendations for the hotel.

The report reflects the Hotel business management training of Park Hyatt Sydney, HOTS is a simulation that is used for the hotel business management training and analysis. This simulation helps the participants to develop the problem identification and problem-solving skills as these skills are essential for the manager of the company to understand the cost and effect relationship between the performance and their causes (Gursoy, 2017).

Park Hyatt Sydney is a 5-star hotel that is placed in the rocks area of Sydney and boasts views over the Opera House and Sydney Harbour Bridge. This company is one of the residencies of the Hyatt Hotels Corporation. There are different varieties of guest rooms and suites available at the hotels which are decorated to a high standard with all the facilities. Along with this, the hotel has 6 meeting rooms which can accommodate from 10 to 120 people and all the meeting rooms are equipped with the latest technology (Park Hyatt Sydney, 2018).

Macro Analysis

Macro Analysis include the PESTLE analysis which is a framework used by the organization to scan the company’s external macro environment (Fernández, Cala & Domecq, 2011). PESTLE analysis of Park Hyatt Sydney is discussed below: -


Political factors- Hotel gets affected due to the changes in the taxation policy, regulations and rules by the government of Australia (Robinson, Fallon, Cameron & Crotts, 2016). Park Hyatt Sydney comes under the 5- star hotel who offers luxury facilities to their customers. If in case, the prices of tax increase then the hotel have to bring the changes in their pricing strategy under which the company has to increase the prices.

Economic factors- Hotel is situated at Sydney and the city is well-known because of its largest economy in Australia. Sydney’s CBD has the plenty of surrounding commercial areas which are considered part of the city (Martin, 2017). Within the city of Sydney, the businesses are able to generate more than $108 billion every year. Therefore, the hotel can generate the profit easily (City Of Sydney, 2016).

Porter's Five Forces Analysis of Park Hyatt Sydney Hotel

Social factors- Social factors of the city affect the working of the Park Hyatt Sydney because the city is well-known tourist place in Australia. The city is occupied by the local community, workers, visitors and the businesses due to which the demand of the hotel is high in Sydney (Frynas & Mellahi, 2011). Most of the people like to book Park Hyatt Sydney for their business meetings or for visit purpose and this leads to the revenue of the product.

Technology factors- Hotel makes use of the advanced technology with the help of which they are able to deliver the delight experience to the customers. The company provides different facilities in which the company make use of technology for instance; gym with latest machines, spa treatment to guest with the use of sauna and steam room (Park Hyatt Sydney, 2018). Due to introduction and advancement of technology the working of the Hotel might get affected as they have to adopt the new technology (Frynas & Mellahi, 2011).

Legal factors- Legal factors include the rules and regulations that might affect the company. Hotel gets affected with the change in the rules by the government for instance; Park Hyatt offers bar facility to their customers along with Hukka but due to strict rules of the government the company needs to take a license from the government to allow the facility of Hukka (Porter, 2008).

Environment factors- The hotels understand their responsibility towards the environment because the company is involved in an activity that might exploit the surroundings (Grant, 2016). For example; the kitchen waste, water wastage, energy wastage and many other resources due to this the Hotel has to understand their responsibility and has to act accordingly.

The microanalysis includes the Porter Five Forces which is a tool that is used by the companies for analyzing the competition of a business (Ivanova & Ivanov, 2015). Porter Five Forces analysis of Park Hyatt Sydney is discussed below: -

Bargaining power of suppliers- The bargaining power of suppliers remains medium in the case of Park Hyatt hotel because the company comes under the Hyatt group who is a well-known company that manages good terms with the customers and suppliers (Deresky, 2017). Park Hyatt hotel will like to take the raw material from the same supplier with whom Hyatt hotels get the products. Therefore, the hotel might face medium bargaining power.

Bargaining power of customers- The bargaining power of the customers is high for the hotel because the customer can easily find the better prices in the place like Sydney and due to which they can switch their preference from Park Hyatt hotel to other 5 star hotels who a better facility with prices (Razalli, Yusoff & Roslan, 2013).

Strategic Directions for Park Hyatt Sydney Hotel

The threat of new entrants- The threat of new entrants in Sydney is high because this place is well known as a tourist place and many business deals take place in this city due to which the entrepreneurs can plan to open hotels in Sydney, Australia. Though, this is also the fact if the entrepreneurs like to open hotels in the city then they have to invest the huge amount which might be a risk factor for the company (Hill & Jones, 2012).

The threat of substitutes- Threat of substitutes is moderate to Park Hyatt because the city has most of the people who would like to book a hotel for the conferences and for the visit. Apart from it, there are many customers who are loyal to the brand and want to consume the services offered by the Hotel (Deresky, 2017).


Industry Rivalry- Many 5-star hotels are present in the city and they give strong competition to the Park Hyatt Hotel and these hotels are InterContinental Sydney, Shangri-La Hotel Sydney and Lord Wolseley Hotel and many others. These hotels are also preferred by most of the customer and visitor due to which the sales and revenue of the Park Hyatt Sydney decrease (Porter, 2008).

In a business, there are 3 main levels of management which include top level, middle level, and low-level management. All these level of management are responsible and accountable for some decisions that they take for the betterment of the company (Percy, 2016). Park Hyatt Sydney hotel needs to make strategic directions after considering the external environmental analysis and the Hotel business management training simulation. Some of the Strategic directions are given below: -

Vision- The aim of the Hotel is to be recognized as one of the leading iconic hotels in the world by providing delight services and product at the forefront of contemporary luxury to their customers.

Mission- The mission of the company is to be the preferred employer in the local hospitality industry.

Objective - The objective of the Park Hyatt Sydney is to maintain no.1 position standing as 5-star hotels in Sydney.

Goals

  • The company wants to ensure that each department is able to meet budgets, exceeding predicted profits and ensuring a high standard of service distribution to associates and guests.
  • To see the hike in the market share of the Park Hyatt’s hotel more than the previous years.

The company implements the decision after making the strategic directions considering simulation (Boella, 2017). The decision that is mostly taken by the hotels who has simulation is related to prices, staff and training, revenue management, refurbish, guest comfort, capital investment, advertisement and many others (HOTS Simulation, 2017).

  • Staff planning and training to employees- Staff planning and training are a most important element for the hotels because this is the only way through which the hotel can provide exceptional services to customers which is essential to accomplish the goals. Park Hyatt simulation management team ensures that there is enough number of staff members in the company. Along with this, the management is able to provide the training to the new employees (Boella, 2017). Through this training, the employees get to know the way to speak and to deal with the customers which are essential for Hotel. Overall, reflects the workplace planning theory which states getting the right person at the right place (Bratton & Gold 2012).
  • Guest comfort- The simulation provides the details to the customers about the facilities that the company should provide to their customers for their comfort. Park Hyatt hotel provide different facilities to the company which includes various suits and rooms, mini bar facility in room, parking facility, delight services for food and drinks, spa and gym facility and many other (Bonilla Priego, Najera & Font, 2011).

Practical Examples and Customer Feedback

The above given are two practical examples that show how the company can implement the decisions in their business with the help of simulation. Customer feedback in simulation plays a vital role and guides a way to achieve the objective of the company (Meler, 2011). Customer feedback helps the company in identifying the needs and desire of customers with the company and with the help of feedback they will be able to make effective strategies to satisfy the needs of customers (Okumus, Altinay & Chathoth, 2010).

It is recommended to the company to update the ambiance in such a way that it reflects the culture of Sydney as a maximum number of tourist visit the places and hotels because they want to get more details related to the culture of the company (Gamble, Thompson & Peteraf, 2013). The ambiance of the Park Hyatt will not only attract the new tourist but it will also reflect the affection of hotel with the city. Apart from it, the company should make effective strategies related to capital investment and advertisement in order to face the strong competitors present in the city (Percy, 2016). Effective and successful capital investment and advertisement will help the company in maintaining the position in the city

Conclusion

It can be concluded that the Hotel business management training (HOTS) plays a vital role for each and every hotel in this competitive world as this is the only way through which the company can face the competition and maintain the position in the market. The report includes the external environmental analysis and the strategic directions to the company considering the HOTS. These strategic directions include the vision and mission, objectives and goals of Park Hyatt. Along with this, it includes a practical example and its implication in Park Hyatt Sydney. Moreover, the report includes the recommendations to the company so that they can achieve their objective.

References

Boella, M. J. (2017). Human resource management in the hotel and catering industry. Australia: Taylor & Francis.

Bonilla Priego, M. J., Najera, J. J., & Font, X. (2011). Environmental management decision-making in certified hotels. Journal of Sustainable Tourism, 19(3), 361-381.

Bratton, J., & Gold, J. (2012). Human resource management: theory and practice. Palgrave Macmillan.

Deresky, H. (2017). International management: Managing across borders and cultures. India: Pearson Education India.

Fernández, J. I. P., Cala, A. S., & Domecq, C. F. (2011). Critical external factors behind hotels' investments in innovation and technology in emerging urban destinations. Tourism Economics, 17(2), 339-357.

Frynas, J. G., & Mellahi, K. (2011). Global strategic management (2nd ed.).UK:    Oxford University Press.

Gamble, J. E., Thompson, A. A., & Peteraf, M. A. (2013). Essentials of strategic management: the quest for competitive advantage (3rd ed.). New York, NY: McGraw-Hill Irwin.

Grant, R. M. (2016). Contemporary strategy analysis: Text and cases edition. Great Britain: John Wiley & Sons.

Gursoy. (2017). Welcome to hotel business management training simulation. Retrieved from < https://www.hotelsimulation.com/> [Accessed 16th February 2018]

Hill, C. W. L., & Jones, G. R. (2012). Strategic management: an integrated approach (10th ed.).  Mason, OH: Cengage Learning.

HOTS Simulation. (2017). HOTS - The Hotel Simulation. Retrieved from <https://www.thetotalsimulator.com/hots---hotel-simulation> [Accessed 16th February 2018]

Ivanova, M., & Ivanov, S. (2015). The nature of hotel chains: An integrative framework. International Journal of Hospitality & Tourism Administration, 16(2), 122-142.

Martin, P. (2017). Sydney powers the nation, accounting for almost half of Australia's economic growth. The Sydney Morning Herald [News]. Retrieved from <https://www.smh.com.au/business/the-economy/sydney-powers-the-nation-accounting-for-almost-half-of-australias-economic-growth-20171204-gzyj04.html> [Accessed 16th February 2018]

Meler, M. (2011). Strategic Directions of Croatian Tourism Development. International Journal of Arts & Sciences, 4(6), 380-396.

Okumus, F., Altinay, L., & Chathoth, P. (2010). Strategic management for hospitality and tourism. Oxford, UK: Butterworth-Heinmann.

Park Hyatt Sydney. (2018). Experience Park Hyatt. Retrieved from <https://www.hyatt.com/brands/park-hyatt> [Accessed 16th February 2018]

Park Hyatt Sydney. (2018). Park Hyatt Sydney. Retrieved from <https://www.hyatt.com/en-US/hotel/australia/park-hyatt-sydney/sydph> [Accessed 16th February 2018]

Percy, L. (2016). Strategic advertising management.UK: Oxford University Press.

Porter, M. E. (2008). The five competitive forces that shape strategy. Harvard business review, 86(1), 25-40.

Porter, M. E. (2008). On competition. Harvard Business Press.

Razalli, M. R., Yusoff, R. Z., & Roslan, M. W. M. (2013). A framework of halal certification practices for hotel industry. Asian Social Science, 9(11), 316.

Robinson, P., Fallon, P., Cameron, H., & Crotts, J. C. (Eds.). (2016). Operations management in the travel industry. UK: CABI.

The City Of Sydney. (2016). Business and economy. Retrieved from <https://www.cityofsydney.nsw.gov.au/vision/towards-2030/business-and-economy> [Accessed 16th February 2018

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