Describe about the Approach for Hilton Corporate Responsibility Report?
Today here in this report we are going to discuss about a well-known hotel company and its strategic approach to execute business in a successful manner. In tourism industry, hotel companies play an important role. Today there are several hotel companies available that are satisfying customers with its services both at local and global levels. The purpose of making this report is to discuss about strength, weaknesses, opportunities and threats of a hotel company and PESTEL analysis of this company to understand that how this organization is working and implementing its strategies to grow in this competitive world. This is an effective way to know about an organization thoroughly. Besides this, we will also discuss about emerging market where a hotel company can grow.
In this report we are going to discuss about Melia Hotels International that is Spanish hotel chain. This hotel chain was founded by Gabriel Escarrer Julia in 1956. This hotel is well-known for its hospitality services among people. This hotel company is one of the largest hotel companies in this world and largest hotel chain in Spain. Melia Hotels International Company has 350 hotels in 35 countries and 4 continents. The popular brands of this hotel company are Melia, Gran Melia, ME by Melia, Paradisus and Club Media etc. This well-known company has its values, strategy, mission and vision statements and these are basic reasons of success of Melia Hotels. The values of Melia Hotels International are Excellence, Proximity, Innovation and consistency. The best hospitality service with quality products is provided by this Hotel Company. (Meliahotelsinternational.com, 2015) The management of this organization believes in team work that is why it encourages skilled professionals and other people worldwide to join their network so that they can connect with people worldwide and can provide them best hospitality services. The operational support of this company is also very effective and it consists of design and construction and HBS technology.
Design and Construction
Design and construction related operational services are managed by Global Technical Services (GTS) department in Melia International Hotel. This department work in order to plan, design, build and identify furniture and equipments for hotel. The aim of this GTS department is to develop a unique and extraordinary hotels that comply with standards of Melia Hotels.
In case of technology department, HBS has whole control and it is Shared Service Centre of MHI. This technical department works in order to provide comprehensive solution for Tourism and Hotel Industry. This department of Melia International has service oriented approach. The basic services that are controlled by this department are transactional, technical and strategic requirements. Besides this, Melia International is also doing various improvements in its operations and optimizing costs of its processes. This Hotel Company has mission to maintain the highest standards of quality and integration. (ltd, R, 2015)
If talk about sales and marketing analysis of Melia International Hotel then it generates more than 25% of its sales by its own sales channels that includes Call Center, loyalty scheme and its online websites. The income that is generated by these distribution channels of Melia International Company is due to significant efforts and groundwork and it consists of new technologies and customer knowledge. New technologies provides help to generate new and latest products according to market trends and choice of customers. On other side customer knowledge is essential to provide services and products to customers that fulfil their needs and optimizing their purchase needs. Revenue management is also a part of sales and distribution. To enhance revenue and to manage stock and channels, revenue management provides help. This process of revenue management is dedicated to developing tools, processes and procedures and strategic planning that is implemented by management of this organization. In this way operational strategies of this hotel company works.
As we have discussed above operational strategy of Melia International Hotel and we got to know that how this organization implements its strategy. Now we will emphasize on mission and vision statement of organization. The mission statement consists of fundamental values that includes commitment to the environment, sharing of local culture and contribution to the integration with society and culture. These are main elements of mission statement of this organization. Besides this, maintainability in business and its activities is also important to maintain customers for long time. Melia International wants to position its company for present and future and this has begun the main pillar of this organization. In this way Meilar organization is planning to optimize its business.
This hotel company has good relationships with its stakeholders and this is also the positive point for an organization because stakeholders can be investors, customers and employees. The management of Melia International listens its stakeholders and maintaining dialogue with them which is necessary for progress of this business. After discussing about background of this company, in next segment of this report we will discuss about SWOT analysis of Melia International Hotel Company that will provide a perfect overview of strengths, weaknesses, threats and opportunities of this company.
SWOT analysis are necessary to discuss here in this report to analyze the strengths and weaknesses of this world’s largest hotel chain organization. Besides this, we can get to know about future opportunities and risk factors of this organization. For thorough study of Melia International Hotel SWOT analysis is necessary. SWOT analysis of Melia Hotel Company consist of following factors: (Swot.businessplaninternational.com, 2015)
Melia International Hotel has High Brand Recognition worldwide. Its hospitality services are popular worldwide for its services.
Melia International Hotel is implementing technical innovations to improve customer experiences and constant upgrade in business processes.
Melia International Hotel has good employee retention and this provide help to manage large and complex business operations.
There are various branches of this company i.e. 350 hotels in 30 countries and 4 continents. It means this organization is providing its hospitality services in several areas of this company.
The good reputation of this company is also a positive factor for success of this company.
Melia International Company has several years’ experience in this field of hotel chain and hospitality services. With best quality products and services, Melia International wants to serve people for long time with its significant sustainable strategy that we have already discussed above in this report.
The sales network of Melia International Company is good enough. The existing distribution ad sales network of an organization are necessary to be strong. This is an effective way to attract customers towards business and to connect with them properly.
In case of domestic market, Melia International Company has good hold and due to this company has less labor costs.
The staff of this organization is skilled and knowledgeable enough in providing services in this field of hospitality.
Due to strong position of Melia International Company into market, new entrants has to make a good strategy to compete with this established company.
Besides these strength factors, there are some weaknesses of this hotel chain that are discussed as below:
Lack of updates and awareness about major developments that can affect the company. This thing is not beneficial for future profitability.
There are many competitors of this company in market and new entrants are also making strategies to come in this market.
Hotel and food chain industry may face too many taxes from government side and this put influence on marketing of business.
Low Productivity can happen in case of improper awareness about market trends and customers’ demand. It is responsibility of organization’s market department to know about latest trend and must provide services according to that otherwise it will lead to improper utilization of resources.
Market share of an organization plays an important role in making of financial position of a company. According to analysis about Melia Hotel Company, for last few years some market share issues are found.
Research and Development department is the main department in an organization and provide help to use emerging technologies in organization. A company must be aware about new technologies that are related to their business and must enhance its involvement into Research and Development department.
These are some weak factors of Melia International Company. The management of this organization must think about improvements in business. These weaknesses put influence on performance of organization and market position. Further SWOT analysis of Melia International consists of opportunities and threats regarding its business that are discussed in next segment of this report.
New Attainments
Melia International Company is a large company and it provides various career opportunities to people. With the growth of this company, this organization wants to hire more skillful employees. The achievements and good performance of this company open new global business offers.
Growth Rates and Profitability
Growth Rates and profitability can be increased of this organization due to its good performance worldwide. As much as growth rates and popularity will be increased, share market of this company will also become high. (Swotanalysis24.com, 2015)
Growing Demands
The good performance of company provides help to increase overall demands of business at national and international level. The statistical information of this organization represents that Melia Hotel services are consumed by people worldwide.
Following are threats that are faced by Melia Hotel International:
Changes in Price
Increment in rate of interest
Regulations and Rules of Government
Increment in price of Raw Materials
Technological Problems
External Business Risk Factors
The above SWOT analysis has provided important information about Melia International Hotel, its performance, its positive points and its negative factors that put influence on this company. Now in next segment of this report we are going to discuss about background to global hotel and tourism industry in developed and emerging markets.
Background in Developed Markets
The background of global hotel and tourism industry is subject to important development over the years and it has faced various obstacles in this development process such as world wars, great depression, social changes and industrial revolution. With the changing of time, hotel and tourism industry has faced various challenges. In time of 1760s, industrial revolution has much lead to emergence of hotels everywhere in this world. At that time, new ways of transportation, resorts and hotels were built in the countryside. The vacation concept was developed and it was available to more and more of the population. After this, the significant era of this industry of global hotel and tourism industry was 1920s, when construction of hotels took a boom phase and in this era well-known hotels were opened. The famous hotels in America and in other countries were developed with best brands like Radisson and Marriot and more others.
There are some essential world organizations that represents the emerging markets global hotel and tourism industry:
World Tourism Organization (WTO)
International Hotel and Restaurant Association (IHRA)
Hospitality Sales & Marketing Association International (HSMAI)
The World Travel and Tourism Council (WTTC)
The above listed world organizations highly prefer Travel and Tourisms for hotel chain industry. According to statistics of UN World Tourism Organization and World Travel & Tourism Council (WWTC), Travel and Tourism industry has positive response from the starting of 2012. The global tourist’s arrivals have progressed to 4.9% in year of 2012. Besides this, traffic of airline passenger is 6.8%. Due to this progress, in tourist arrivals and airline passengers hotel occupancy rates are also growing in markets. At national and international levels, tourist arrival experience is increasing.
Travel and Tourism market is rising in many countries and that is why hotel companies are also doing great in those countries. The most emerging market in global hotel and tourism industry is Thailand. Here we will discuss that what efforts are doing by Thailand market in global hotel and tourism industry.
Thailand is a beautiful country with natural sceneries and it has rich culture. The tourism and hospitality industry in this country has common ministry. This ministry is controlled by Ministry of Tourism and Sports and under this Office of Tourism Development and the Tourism Authority of Thailand operates. The tourism authority of Thailand wants to make this tourism industry capital of tourism industry of Asia. Most of the tourists in this country come from Japan, Korea, Malaysia and China. USA is also the target market of Thailand. The main factors that attract tourists towards this industry are Sea and Beach Resorts, Nature, Park and Mountains, History and Culture and Food, golf, Spa and Shopping. Most of the hotel companies are interested to invest in this emerging market and to provide its services to tourists. The strategic plan of government is to make this place best for tourism. If we talk about future of this industry then industry has bright future and the major factors that contributes in this industry are political stability, government commitment and corporation of public and private sectors. (Www2.amk.fi, 2015)
Melia International Company should move towards Thailand to execute successful business here in this country. Melia Hotel has a major focus on the growing industry in Asia Pacific in additions of its hotels in Thailand. This is because, Thailand is the top market destination for Germany, Russia and Eastern Europe. Melia International Hotel Company commit for best and quality services to its customers in every country. Globalization has become very much necessary for every business in this world. Now, in next segment of this report we will discuss about PEST analysis of this industry of Thailand Market, so that we can thoroughly understand the strategic approach of this industry.
Here in this segment of report we will discuss about PEST analysis of this Market. PEST stands for Political, Economic, Social and Technical analysis of Market.
The political factors of Thailand market are concerned with stability of industries and organizations that includes terrorism, corruption and demonstration etc. In these industries every country has its own low enforcements that consists of corruption, working, system, immigration and terrorism. The political factors that can put influence on business market of Thailand are working overtime without payment, hazardous waste by factories and illegal immigration. These factors are putting influence on culture and environment of Thailand. Here we have an example of detrimental effect by domestic political tension and this is one of the political problems. There are big two groups of red shirt and yellow shirt. The problem here is about different believes of Thai People. Thailand Government has laws for hotel industry and according to that to develop a new hotel from scratch, a company should have experience and sufficient financial support. Governmental approval procedures and policies must known to hotel’s owner. Besides this, license and permits that are required for commencing hotel business in Thailand are certificate of construction and annual inspection of building by qualified engineer, a license for public entertainment, sale of food and sale for alcohol and cigarettes etc.
Economic factors of a country are very much important for all businesses. Bad economic conditions like after world war I was encountered may cause crisis. Due to crisis, all countries may bear big loss regarding consumer confidence, bankrupt, unemployment and risks in investments. It was also happened in Thailand industry in 1997 and domestic companies were bankrupt and international companies has stopped to do business in Thailand. But now various improvements have done in economic condition of this country. The export sector of this country has great influence on GDP. The high economic growth of Thailand is 8-9% per year and it is now increasing year by year. The rate of recovery in economic growth is also good enough and this factor makes this country financially well. Besides this, poverty issues are resolving by government at large extent. Due to these economic factors, Melia International Company can invest here.
Social Factors are concerned with three important aspects that includes changing of family relationships, changes in lifestyle and health. Now trends regarding food, style, living and society as whole have been changed. That is why Tourism Industry has knowledge about these updates and enhance its knowledge about organic food, sport activities and health spa. They must also understand this thing that people in different countries have different lifestyles and they should do improvements according to that in tourism industry. Social Factors of Thailand consists of per capital income, population and age factors etc. Per capital in Thailand is 3451.33 USD in 2014. Before commencing new business in Thailand, business owner must have knowledge about this. The population of country is also necessary to consider for running business in that country, so that potential customers of business can be estimated easily and quality services can be provided to them. According to statistics of Thailand in 2013, total population is 67.01 million. Now on the behalf of this information, Melia International can find its potential customers.
Technological factor are also essential to measure. Technological factors also put influence on improvement. If perfect techniques will be implemented by government then industry will be successful. In 20th century, Thailand and other countries have shown their interests in information technology to do improvements in tourism business. The common IT activities that are performed by tourists companies are online booking, online shopping, Internet banking etc. Most of the travel agents use this technology for enhancing their business and they consider this technology a best way to attract customers towards worldwide.
In above sections of this report we have discussed about SWOT and PEST analysis of Melia International Company and its emerging market that is Thailand. The PEST analysis of Thailand market provides information about political, economic, social and technical factors that must be in the knowledge of every tourism and hotel industry that wants to invest in a country. Melia International company is investing in this country after knowing about these factors properly. We know about strength and weaknesses of company and from this it is cleared in which factors company can do best and where it can face problems. Due to these reasons SWOT and PEST analysis are considered to be important.
According to analysis we got to know that Melia International Hotel Company has decided to establish its business in Thailand Tourism and Hotel Industry. To achieve this, Melia International will use some strategic approaches for business growth and this will be a best way to attract tourists and to offer them best deals. In this strategic approach, Melia Hotel and Tourism Government of Thailand is involved. Melia International Hotel Company wants to make a long-term relationship with Thailand and there is requirement of an agreement that must be based on mutual trust, shared concept of hospitality and prosperity of communities.
In our views, this strategic emerging is an effective approach. This is beacause today without mutual understanding, strategy and long term relationship it is not possible to run business successfully. Besides this, two hotels of Melia International Company at every beach of Thailand is a good starting of business for Melia for enhancing popularity and growth of business.
To implement business in Thailand, Melia International has to focus on a strategic approach that can give success to business. Porter’s Generic Strategies, Anoffs Matrix and Nykiel’s fourteen hotel strategic growth are some important business growth strategies that Melia International Hotel should implement.
Porter’s strategies consists of framework of five forces that put influence on an industry’s business. Melia International Hotel Company should be aware about these influences:
Supplier Power
Before start business in Thailand, Melia Hotel must know about its potential suppliers for all required business resources. Management of this company must concentrate on volume of supplers, presence of substitute inputs and theats regarding forward integration. (Quickmba.com, 2015)
Threats of New Entrants
Most of the hospitality and food chain hotel companies wants to do business in Thailand. Melia Hotel must be aware about new entrants, absolute cost advantages, government policy towards them and brand identity.
Buyer Power
The next force of porter’s model is to estimate of power of buyers. The price, quantity, quality and incentives, all should be decided according to potential buyers.
Degree of Rivalry
The information of rivals in a particular industry in which a company is going to start business is necessary. Melia International should be careful about growing industries, diversity of rivals and difference among products and services.
Threat of Substitute
It is common threat of substitutions in market that enhances chances of competition for existed and new companies.
Ansoff Matrix is considered to be an important part of business studies. According to Ansoff there are three different strategies that a business should adopt. In this case, Melia International should adapt these strategies in following ways:
While commencing its new services in a new market such as Thailand, Melia International should be aware about possible risk factors. The two major two risks factors can be development of emerging market and development of its business products.
To handle critical conditions in business, Melia International should have proper strategy and that should be implemented quickly.
Degree of risk into market in the comparison of other rivals should be analyzed by Melia International Company before commencing business in Thailand.
Nykiels Strategy is related to growth strategy of business. According to this strategy, Melia International should take following actions to grow its business in Thailand.
Specialization
Melia International should adopt specialization strategy and it is possible by bringing dedicated luxury hospitality in Thailand Market.
Horizontal Expansion
Melia International should make strategy to expand its business in Thailand Resort and adventure tourism market. This provides additional revenue.
Brand Collection
Melia International wants to popular its brand by setting up locally known restaurant, coffee parlours etc. It will be better to encourage this company in target market.
Above discussed market and business growth strategies should be implemented by Melia International Hotel Company.
There are various business industries in which this type of strategic approach has been used. The big and famous hotels like Hilton has also implemented its business in Thailand with stakeholders’ agreement. They have made effective engagement with stakeholders of Thailand Industry. As we know stakeholders are important for every business organization that is why it is necessary to make good relationship with them so can they can provide good business to your company. (Cr.hiltonworldwide.com, 2015). Melia International Company also do efforts to make a good relationship with its stakeholders and its mission statement is to provide quality services. With this strategy it is possible for Melia International Company to grow for next five to ten years. The growth of every business requires a good relationship with customers and clients, proper utilization of finance sources and globalization of business. Melia International Company considers these factors.
Conclusion
After this whole discussion about Melia International Hotel and its business approach we can say that this industry has good opportunities to sustain its popularity worldwide. All its positive points and strategic planning will bring this to top of this market. But some issues and weak factors that we have seen in this industry cannot be ignored and necessary to improve as soon as possible by this industry. Today hotel and tourism industry has become so advanced and various emerging technologies are also contributing in it. That is why all business organizations must adapt these technologies for better and rapid business growth.
References
Meliahotelsinternational.com, (2015). Quiénes somos | Meliá Hotels International. [online] Available at: https://www.meliahotelsinternational.com/en/about-us [Accessed 26 Dec. 2015].
Cr.hiltonworldwide.com, (2015). Approach : Hilton Corporate Responsibility Report. [online] Available at: https://cr.hiltonworldwide.com/approach/stakeholder.php [Accessed 26 Dec. 2015].
Meliahotelsinternational.com, (2015). The finishing touch to the Meliá tour of Asia: A strategic agreement with TCC Land Asset World, Thailand’s leading business group, to open three hotels over the next three years | Meliá Hotels International. [online] Available at: https://www.meliahotelsinternational.com/es/node/2119 [Accessed 26 Dec. 2015].
Www2.amk.fi, (2015). Tourism and Hospitality Industry page 1. [online] Available at: https://www2.amk.fi/digma.fi/www.amk.fi/opintojaksot/030806/1080816599198/1108017869192/1108024452286/1108397229703.html [Accessed 26 Dec. 2015].
Swotanalysis24.com, (2015). Melia Hotels International SA financial SWOT analysis – Strengths, Weaknesses, Opportunities, Threats of Melia Hotels Internatio. [online] Available at: https://www.swotanalysis24.com/swot-m/69900-swot-analysis-melia-hotels-international-sa.html [Accessed 26 Dec. 2015].
ltd, R. (2015). Melia Hotels International, S.A. (MEL) – Financial and Strategic SWOT Analysis Review. [online] Researchandmarkets.com. Available at: https://www.researchandmarkets.com/reports/1290731/melia_hotels_international_s_a_mel [Accessed 26 Dec. 2015].
Swot.businessplaninternational.com, (2015). SWOT matrix for Melia Hotels International SA company in United States. [online] Available at: https://swot.businessplaninternational.com/companies-swot-analysis/88460-swot-analysis-melia-hotels-international-sa-in-united-states.html [Accessed 26 Dec. 2015].
Quickmba.com, (2015). Porter’s Five Forces. [online] Available at: https://www.quickmba.com/strategy/porter.shtml [Accessed 29 Dec. 2015].
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