Share of market zGranada (9%) Forte, UK’s largest Hotel chain Posthouse, Travelodge zWhitbread Hotel company (6%) Marriott uk Travel Inn zSix Continents (5%) Holiday Inn Intercontinental
Boston Matrix HIGH Granada Group plc 9% share, 3.9% growth Whitbread plc 6.6% share,-0.7% growth LOW Thistle Hotels plc 4.5% share, 0.1% growth Hilton Group 6.0% share,-8.1% growth MARKET SHARE
Porters 5 Forces Competitive rivalry: 4 main players Granada Group Whitbread plc Hilton Group Thistle Hotels Potential entrants. Expensive to compete against the main players. Long time needed to establish a respectable name and build up customer loyalty Suppliers Many suppliers for hotels so quality and price are key factors for hotels to consider when purchasing. Supplier power is low in the hotel industry as the hotels are able to pick and choose from a large number of suppliers Buyers Large amount of buyers so price and quality has to be competitive to be attractive Substitutes Many hotels so there can be a lot of product-for-product substitution. Doing without also a form of substitution. Invest in video conferencing saving on air fares and time
Changes zIncreased demand for Budget hotels Increased small hotels zMiddle sized (51-199 rooms) Maintained zLarge increase in over 200 rooms Overseas Conference
z1999 turnover £4.3 Billion +6% on 1998 zProfit £881 million +14% on 1998 zLargest branded chain Under Forte Le Meridien, Posthouse, travelodge and Heritage. zInterests In UK TV among others zHotels + Restaurants 2/3 of revenue
PEST Analysis for hotels zPolitical/Legal Monopolies Employment law zEconomic Factors Life cyclesRecessionDisposable income zSociocultural Factors Lifestyle changesPopulation demographicsAttitudes zTechnological New developmentsRates of obsolescence
Strengths zThe current UK market size is worth £10.3 billion. zHuge growth in large hotels doubling in Value between 1996 and 2000 (now worth £289.2 million) zSmall hotels with less than 50 rooms form 92% of the market in terms of value.
Weaknesses zFuture market uncertain after the events of September the 11 th. zBusiness restricting travel expenses to cut costs zTechnology advances in video conferencing
Opportunities zPopulation uncertainty about air travel encourages more UK holiday makers to holiday internally. zIncreasing demand for budget style hotels. zIncreasing demand for short break offers.
Threats zNumbers of foreign visitors have fallen dramatically causing severe financial worries particularly for London business orientated hotels. zUncertain future zGlobal economic slowdown will hit hospitality hardest. zBusiness travelers all but disappeared.
Forecast zForecast to grow by 16% to £12 Billion by 2005 zEconomic slowdown little conferencing more short breaks zReduced International Travel affect large hotels