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Background of the International Hotel Industry

Tourism industry plays an important role in contributing towards the global economy. The basic function of hospitality and tourism industry depends upon the customer relationship and guests who works in coordination with each other. The international hotel industry is expected to grow at a fast pace in coming years. The industry is developing at a fast pace creating opportunities not only in the local market but at international market as well. The hospitality market is important from the point of view of Employment opportunities, growth and development. The global hotel industry revenue in 2016 was predicted as $550 billion US dollars. The total amount of revenue earned by the industry in the year 2011 was worth $457 billion US dollars. This represents an increase in the revenue of almost $100 billion US dollars.  There are many countries emerging out to be beneficial from the business point of view. The number of customers is expected to increase in the coming years. This indicates that the hotel industry will experience an immense growth in coming years creating with widening opportunities. The hotel industry is doing explicitly well looking onto the existing market state of affairs.  This is effective in dealing with the existing market situation and to provide with diversified opportunities in the market (Andrew, Schmidgall and Damitio, 2007). With the changing business trends in the international market, big hotel chains are moving to Asian countries due to diverse business. In such a scenario it is relevant to manage the opportunities in foreign nation. The change in lifestyle and increasing business opportunities has accompanied in growth and development of this sector. In a decade this industry has witnessed tremendous changes. It is only possible because of the business activities and responsibilities available in this sector for the people. This industry is been providing with employment opportunity.  The advancement toward Asian Countries is improving the overall scope hence helping in gaining market competencies.

The London Marriott Hotel, West India Quay is a magnificent 5-star hotel in London, England. The hotel is located at 22 Hertsmere Road, Canary Wharf supervising the West India Quay Marina. The hotel is operated by the Marriott Hotels group, furthermore it has 301 rooms. The property is owned by the billionaire property developer John Christodoulou.  The hotel is giving an enthralling experience to the customers due to its primary location in the heart of Canary Wharf.  The rooms are designed to give a perfect setting to the business travellers and leisure activities. The extravagance hotel provides all the amenities, like large room, mini-bar, flat screen TV and floor- to-ceiling windows. Interestingly there is a direct view to the London Dockland. The hotel is providing with various amenities like a fitness centre for the guests and n supplementary amenities like: business centre, multipurpose event spaces. The location is centrally located from the famous places like Olympic Park and O2 Arena that makes it easily accessible (Overview, 2017).

It is a technique that focuses on the internal and external factors related to the business organization. This tool helps in analysing the Strength, Weakness, opportunity and Threats of an organization. These factors are important for analysing the success and growth factors.

Background of the Hotel

International Market Leader

The hotel chain is the largest hotel group across world. The hotel is pioneer of change and management and sharing a value of 5 percent in the market presence. This gives them an opportunity to expand the business across the world through its dynamic market presence. The brand does understand the effective way to meet the end results (Boella and Goss-Turner, 2013).

Strong Presence Over Social Media And Internet

The hotel group is largely present over the internet and social media website. It is an important part of the company marketing strategy. The official website of the company guarantees better options to the customers. Online booking and discounts are provided by the website in order to attract customers (Brotherton, 2012).

Innovative Technology

The hotel is using innovative technology in managing day-to-day functions. This allows business in gaining competencies in current scenario.  They are using innovative technology in meeting the organizational targets.  This motivates the guest in different manner while adopting innovative functions (Buhalis and Crotts, 2013).

Location Based Advantage

The hotel is located at a favourable place that is easily accessible. The central location of the hotel helps guest in reaching out to the other places. The hotel is currently expanding its activities by accommodating new functional operations. This helps a business in improving the guest experience in distinct way (Holcomb, Upchurch and Okumus, 2007).

Local Market Centric 

The hotel is presently focused on the UK market. The global reach is restricted and to the UK market. There is a need to expand the business in order to gain worldwide recognition.

Competition

The rate of competition in the UK market is very high. There are various local and international hotel chains. They are posing competition to the hotel regardless of its brand image. The economic brand present in the market is favoured by the foreign tourists.

High Standard

The cost of hotel rooms is very high. These rooms are difficult to be affording for people of a lower income group. At present they are only targeting on higher income group. In contrast there are other hoteliers providing with similar services at a lower price.

Growth Opportunities In Emerging Market

The hotel chain can plan to expand its business by deriving better expansion plans. Marriot can plan to expand its business in the global market that will in return help in gaining market competencies.  It can expand its business at the place where they do not own any hotel.

Implementation of Technology Based Services

The advancement of technology in the recent scenario has helped in managing the organizational competitiveness. By implementing a concrete innovative strategy, it will be easy for the hotel chain to gain competency. By offering an effective technology, they can gain maximum customer base.

Environment Friendly Strategy 

There is a necessity to focus on environment friendly strategy in order to meet the climatic issues. This will circulate a good message in the surrounding. In this way they can attract more customers. The number of guests will gradually increase and the overall operational cost will decrease. Through these market opportunities, they can create better opportunities for the brand.

SWOT Analysis

Entry of International Hotel Brands

The entry of international brand in the UK market is creating threat to the company.  The lower cost international hotels are posing strict competition affecting its market position (Jin-zhao and Jing, 2009).

Political and Economic Unsteadiness 

The downturn in the economy and the Brexit referendum has a direct impact on the revenue. The change in the economy pattern has largely affected the business revenue.  This has affected the business in lest one year. The government policies play a vital role in influencing the growth mechanism.  For the reason, the organization needs to be proactive in decision making process.

High Fluctuation Rate 

The rate of fluctuation in this industry is very high followed by intense competition.  This is affecting the pricing policies of the hotel. This will indirectly affect the revenue of the hotel (Law, Leung, Lo, Leung and Fong, 2015).

The international hotel industry is facing challenges in the recent time due to the social, political and economic changes. In the meantime the hotel industry has come across different barriers in the industry. The last decade has seen a tremendous growth in the hotel industry. The changes in hotel industry have created wide opportunities. The concept of tourism has developed over the years creating significant opportunities in the market. The growth of international hotel group like Hyatt, Radisson, and Marriot has incorporated significant changes in the market.  The changes in the hospitality industry have created changes in the international market. Among all the facilities the organization is able to gain competencies.  Indian market has ample of opportunities to manage the function.  The purpose of the market opportunities helps in gaining market consistent (Mok, Sparks, and Kadampully, 2013).

In order to expand the business globally, Marriot can look For Opportunity in Indian market. Asian market has ample of business opportunity in terms of growing business opportunities. This sector has a fastest growing sector with long-term growth opportunities.  Indian market is a fastest growing economy. The exotic and diversified climatic condition has created better opportunities. The Indian government is making ample of efforts helping in creating a better opportunities for the international companies. The political and economic policies are favourable instigating tourism sector. These favourable conditions are important in gaining market competency.

This tool is used to analyse the external factors like political, economic, and social and technology factors. These factors are important to manage the business. This will allow in analysing the business opportunities in India. In order to analyse the business opportunities in India, it is evident to do the necessary market investigation.

The political environment in India is favourable in terms of the FDI policies. These factors are important for Marriot to make possible intervention. The country has strict rules and regulation related to political stability in the country.   These types of factors are important for meeting the targets. The purpose of the business function is to manage the macro environment factors. The easy licensing policies allow the international business organization (Paryani, Masoudi and Cudney, 2010).

The economic policies of the country play an important place in meeting the business goals.  The economy of the country is growing at a fast pace creating lot of opportunities for the international business organization.  Though there are certain factors like Unemployment, a high inflation rate. But there are ample of growth opportunities in the country. India has the second largest population in the world.  With such an effective market situation the company can gain effective market capabilities (Pizam and Shani, 2009).

India is dominated by the middle class population. In the recent time, the growth of upper middle class has created a scope for the international brands to penetrate in market. There are diversified social trends with a changing lifestyle in Indian culture. This will create better opportunities for the foreign company (O’Neill and Davis, 2011).

From technology point of view, the country is performing extremely well and creating a wider scope for the international companies.  The company can make innovative engagement through implementation of effective policies. In India there are majority of business opportunities helping in gaining innovative capacity. There are advanced market capacities that will allow in gaining effective market growth and capacity. In this way it is possible for the business to gain competency in the era of growth and development (Nyheim and Connolly, 2011).

The above section analyse the advancement of the company in relation with the external and internal environmental factors. This help in allaying the strengths, weakness, opportunities and threats.  In order to gain market competencies it is important for a business enterprise to gain the effectiveness. By analysing the market opportunities it is possible to understand the diversified opportunities in the market. This gives them an opportunity to expand the business across the world through its dynamic market presence. The brand does understand the effective way to meet the end results. From the Analysis it is easy to understand the growth opportunities and various opportunities in a well-defined way.  In this way the company can perform well in the foreign land (Tranter, 2009).

Strategy of the hotel is important to understand he growth opportunities while entering into the international market.

The porter generic strategy helps in gaining market effectiveness and allow in developing cost leadership and differentiation strategy. This is an effective way to deal with the competency (Walker and Miller, 2009).

India is a huge market with lot many opportunities. With cost leadership in the market helps in promoting growth,  The purpose of the company is to provide with a better opportunities as compared to the other Local and international hotel. In India, the hotel will provide with effective services in order to motivate the customers.

Apart from the Cost leadership, the organization will gain the differentiation strategy. In India, it is suggested to incorporate effective differentiation strategies.  This will help in meeting the target it is possible to achieve the market segment.  Marriot will provide with high quality hospitality arrangement by attracting customers in an effective way ((Smith and Puczkó, 2014). Marriot can plan to expand its business in the global market that will in return help in gaining market competencies.  It can expand its business at the place where they do not own any hotel.

Product Development 

The growth strategy related to a product depends upon the effective services and capacity. This will help the Indian hotel to compete in an effective way. Business expansion is only possible through better and effective market opportunities. They can add other tourism activity likes fun, culture, game and after sales services. This will allow the business organization in dealing with the upcoming market challenges (Nieves & Quintana, 2016).

The hotel group is known for an effective service. Market penetration is important for a business enterprise in order to gain a strategic position. This strategy will help in gaining effective growth.  Market penetration will help to gain competencies in the Indian market. This is an effective way through which an organization can gain better policies (Solberg and Durrieu, 2008).

The Indian market has developed largely creating vast opportunities. It is one of the reasons to expand in the Indian market. The development of better market development opportunities will allow in expanding the customer base. In this way, the hotel can take a competitive advantage in the Indian market. This will circulate a good message in the surrounding. In this way they can attract more customers. The number of guests will gradually increase and the overall operational cost will decrease

There are 14 strategies under the Nykiel’s strategy to understand the growth opportunities available in the market.

  1. Horizontal expansion

The Marriott West India has to make efforts in order to expand their service line from one service to another. This will allow the business organization to develop the avenues in the coming years (Chand and Katou, 2007).  

  1. Geographical expansion

Indian market is vast in comparison to the other Asian countries. In terms of expansion, it will gain competitive advantage.

  1. Product Hybridization

They have to increase the ongoing facilities in the hotel and hospitality services for inflowing in budding market (Jauhari, 2012).

  1. Specialization-Specialist

The organization is known for giving services to the high-end customers.  There is a necessity to think from the point of view of pricing policies while going to new market (Kang, Stein, Heo and Lee, 2012.).

  1. Product Tiering

They have o handle the process of people growth, economic and demographic changes and an increased market segment in Indian market.

  1. Franchising

They will be following well-known business strategy by outsourcing the promotional activities to the PR agency in India. This business strategy will help in aiming competitive advantage (Sin, et al 2005).

  1. Brand Collection

The brand is known for serving eminent facilities that will distinguish them from the existing market competitors.

  1. Management Contracts

They will sign a contract with the management and the other agencies in order to gain competitive advantage.

  1. Product Re-Branding

The company will expand the business opportunities in terms of hospitality services of Marriott West India Quay while entering into Indian Market (Verma, 2014).

  1. Non-Franchising

The hotel will own all the services and practices in order to gain market competencies. They are known for providing effective services to the customers directly

  1. Vertical and Horizontal Integration

Marriott is a part of more than one hospitality segment in order to gain competitive advantage. Through an effective market strategy it is possible to gain distinguished market goals. The brand does understand the effective way to meet the end results. It is easy to understand the growth opportunities and various opportunities in a well-defined way (Sanjeev, Gupta and Bandyopadhyay, 2012).

  1. Singleness

Marriott will expand single service policies that will help in managing the ownership and control on management while entering into Indian market.

  1. Value related Products and Services

The introduction of new service will help in fulfilling precise leaning and values amid customers while entering into the emerging market.

  1. Global Positioning

All these growth strategies will help Marriott in expanding globally. With these market tactics it is possible to motivate the guest in different manner while adopting innovative functions (Singh and Arora, 2014).

Marriot has multiple reasons to make advancement to the Indian market. They are adopting product differentiation strategy for communication and cost risks. This sector has a fastest growing sector with long-term growth opportunities.  Indian market is a fastest growing economy. The exotic and diversified climatic condition has created better opportunities. The Indian government is making ample of efforts helping in creating a better opportunities for the international companies.  In order to meet the expectation of the market it is important to grow in a manner that is able to deliver good result (Manhas and Tukamushaba, 2015). By applying the strategies it is possible to gain competitive market advantage in Indian market. The goal set by the company can easily be met through a distinguished market objectives hence helping in improving scope. The implicating of market strategy is important in gaining competitive advantage in the market.

There is excessive competition in this industry.  Under such an immense competition it is important to develop the growth strategy for the coming years. There are so many hotels in the industry similar to Marriot.  They have a similar strategy to grow in the market. For business expansion, it is vital to develop better relationships with the stakeholders. On a long run it is important to focus on developing stakeholder interest. Marriott will focus on this for the next 5 years to be able to increase its customer base in India. For the next 10 years it should focus on improving revenue. This plan will help them to achieve strategic growth in coming years.

Conclusion

To conclude, the report focuses on the expansion strategy of Marriott West India Hotel. It analyse the opportunities in developing the business in Indian market.  This will assist in gaining market competitiveness.  Indian market is growing at a fast speed creating ample of opportunities for the international hotels. The economy of the country is growing at a fast pace creating lot of opportunities for the international business organization.  Though there are certain factors like Unemployment, a high inflation rate. But there are ample of growth opportunities in the country.

References

Andrew, W.P., Schmidgall, R.S. and Damitio, J.W., 2007. Financial management for the hospitality industry. Upper Saddle River, NJ: Pearson Prentice Hall.

Boella, M. and Goss-Turner, S., 2013. Human resource management in the hospitality industry: A guide to best practice. Routledge.

Brotherton, B. ed., 2012. International Hospitality Industry. Routledge.

Buhalis, D. and Crotts, J., 2013. Global alliances in tourism and hospitality management. Routledge.

Chand, M. and Katou, A.A., 2007. The impact of HRM practices on organisational performance in the Indian hotel industry. Employee Relations, 29(6), pp.576-594.

Holcomb, J.L., Upchurch, R.S. and Okumus, F., 2007. Corporate social responsibility: what are top hotel companies reporting?. International journal of contemporary hospitality management, 19(6), pp.461-475.

Jauhari, V., 2012. Strategic growth challenges for the Indian hotel industry. Worldwide Hospitality and Tourism Themes, 4(2), pp.118-130.

Jin-zhao, W. and Jing, W.A.N.G., 2009. Issues, challenges, and trends, that facing hospitality industry. Management Science and Engineering, 3(4), p.53.

Kang, K.H., Stein, L., Heo, C.Y. and Lee, S., 2012. Consumers’ willingness to pay for green initiatives of the hotel industry. International Journal of Hospitality Management, 31(2), pp.564-572.

Law, R., Leung, R., Lo, A., Leung, D. and Fong, L.H.N., 2015. Distribution channel in hospitality and tourism: Revisiting disintermediation from the perspectives of hotels and travel agencies. International Journal of Contemporary Hospitality Management, 27(3), pp.431-452.

Manhas, P.S. and Tukamushaba, E.K., 2015. Understanding service experience and its impact on brand image in hospitality sector. International Journal of Hospitality Management, 45, pp.77-87.

Mok, C., Sparks, B. and Kadampully, J., 2013. Service quality management in hospitality, tourism, and leisure. Routledge.

Nieves, J., & Quintana, A, 2016, Human resource practices and innovation in the hotel industry: The mediating role of human capital. Tourism and Hospitality Research.

Nyheim, P. and Connolly, D., 2011. Technology strategies for the hospitality industry. Prentice Hall Press.

O’Neill, J.W. and Davis, K., 2011. Work stress and well-being in the hotel industry. International journal of hospitality management, 30(2), pp.385-390.

Overview,2017. Online. Available at: https://www.marriott.com/hotels/travel/loncw-london-marriott-hotel-west-india-quay/ Acceseed on:21 September 2017

Paryani, K., Masoudi, A. and Cudney, E.A., 2010. QFD application in the hospitality industry: A hotel case study. The Quality Management Journal, 17(1), p.7.

Pizam, A. and Shani, A., 2009. The nature of the hospitality industry: present and future managers' perspectives. Anatolia, 20(1), pp.134-150.

Sanjeev, G.M., Gupta, K. and Bandyopadhyay, R., 2012. Financial challenges in the Indian hospitality industry. Worldwide Hospitality and Tourism Themes, 4(2), pp.163-173.

Sin, L.Y., Alan, C.B., Heung, V.C. and Yim, F.H., 2005. An analysis of the relationship between market orientation and business performance in the hotel industry. International Journal of Hospitality Management, 24(4), pp.555-577.

Singh, K. and Arora, R., 2014. The changing face of the Indian hospitality industry. International Journal of Advanced Research in Management and Social Sciences, 3(8), pp.26-36.

Smith, M. and Puczkó, L., 2014. Health, tourism and hospitality: Spas, wellness and medical travel. Routledge.

Solberg, C.A., Durrieu, F., 2008, “Strategy development in international markets: a two tier approach”, International Marketing Review, Vol. 25, No. 5.

Tranter, K.A., 2009. An introduction to revenue management for the hospitality industry: Principles and practices for the real world. Pearson Education India.

Verma, A.S., 2014. Sustainable Supply Chain Management Practices: Selective Case Studies from Indian Hospitality Industry. International Management Review, 10(2), p.13.

Walker, J.R. and Miller, J.E., 2009. Supervision in the hospitality industry: Leading human resources. John Wiley and Sons.

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