Beating the Competition and Sustaining in the Modern Hotel Industry

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“The capital of the world is in 23 different places”- this was the tagline used by the General Electric Company when it expanded its business in 1995. It is very valid for India as well. India is emerging as one of the leading economies of the world and the rate of growth in every sector of the economy is immense. The hotel industry is very sensitive to economic cycles and is therefore intrinsically linked to the state of the economy. At present, there are over 462 hotels in the country and the total number of rooms is around 58612. Hotel room supply has increased in 2010-11 by 15% while the nationwide occupancy has increased by 1.7%. Although the growth in supply is a double digit figure but the growth in occupancy signals the fact there is a lot of scope in the hotel industry in India (Vardharajan, Goel and Karulkar, 2011). The table below, obtained from the same source, presents the existing and proposed supply entering the major cities in the country. “Over the past five years, most brands have focussed their emerging market expansion plans on the upscale and luxury sectors, targeting international and luxury business travellers.” (Hospitality 2015: Game changers or spectators, Deloitte, 2010) “Half of humanity is middle class, that middle class needs hotels.”- Fritts van Passchen, President and Chief Executive Officer, Starwood Hotels and Resorts Worldwide Inc. (Hospitality 2015: Game changers or spectators, Deloitte, 2010) These are the two chief thoughts that are driving the upcoming hotels in India. Gradually but steadily the focus on the market is shifting from upscale luxury to a completely new concept which combines elements of luxury with elements of the so-called Budget hotels. This is the new age competition that the five star and deluxe hotels are going to face in the country and worldwide. Every company in the hospitality sector is reinventing and repositioning itself to match the requirements of this emerging market. The list below shows some of the major upcoming hotels in India at major locations. | |

The list above is not exhaustive and in fact there might an equal number of other upcoming hotels. On studying these hotels closely, we can see that gradually the line that differentiates star categories of hotels is fading away. “Sustainability will become a defining issue for the industry in 2015 and beyond.” (Hospitality 2015: Game changers or spectators, Deloitte, 2010) Competitive Intelligence is the latest game-changer in the industry. It is very important to know what our competitors will do before they do it. It requires data collection, analysis of the competitors’ market value and position, integration into our own information database and wise business decisions. It should have immediate, actionable and effective results. All upcoming hotels are competition to existing hotels irrespective of star category. Existing hotels have to use technology, logistics and marketing skills to stay upbeat with the new breed of hotels coming up. It’s no longer enough to compete with oneself and we should never underestimate our competitors. An updated database about all the competition and continuous research and development is essential. Renovation and innovation are indispensible. “Strong brands survive almost every crisis.”(de Paoli and Fischer, 2001) “Only a sustainable differentiation between one’s own brand and competitor brands can help to gain new customers or to realize a price premium.” (Daun and Klinger, Delivering the message, 2006) Stephen King’s article suggested that it is now time to consider revising the application of marketing principles to the marketing of brands in the 1990s. “A brand is more than a logo, a name or a corporate design- it is the picture which is anchored in the perception of a customer and affects their preferences.”(Daun and Klinger, Delivering the message, 2006) Branding and positioning are what define the success of a business. Guests form perceptions about hotel...
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