Banyan Tree

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Having identified the gap in the hotel and luxury resort industry, Banyan Tree Hotels and Resorts (BTHL) positioned itself in the niche upscale category of providing romantic, intimate and exclusive holiday experience to its guests. It was coupled with a natural serene setting with tailor made services. BTHL was exceptionally successful in positioning its point of difference in the minds of its customers. As a result of this competent customer segmenting and high levels of customer service, BTHL became an instant hit. The other hotels which were its product category competition wanted to co-brand themselves with BTHL and this led to creation of Angsana Spas which operated at other hotels or on a standalone basis. BTHL created new brands Angsana Spa and Colours of Angsana Resorts while launching the spa and resorts to cater to a less upscale market. Adopting a brand extension strategy to bring the two under the umbrella “Banyan Tree” brand could have had a positive halo effect on the perceived quality of Angsana Spa and Colours of Angsana on one hand but on the other, it could have led to “Banyan Tree” brand dilution and dented the customer perceived value because the customers no longer would be able to identify with BTHL as a premium and exclusive experience. One of the key success ingredients for BTHL is the exclusive tailor made services for the guests like the private boat, musician, Buddhist monk and private chef etc. The labour to provide such elite services is currently available to the hotel in abundance and is cheap due to BTHL’s proximity to villages. However, if BTHL were to replicate the aforementioned style of its Asian operation in South America and Southern Europe, the cost of operation of the resort would be significantly higher than it is for its Asian properties due to expensive labour and real estate. Also, the Banyan tree spa, which uses Asian therapies and is core to the BTHL experience, may not be in congruence with the local culture in...
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