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MARKETING ENGINEERING FOR EXCEL



CASE



VERSION 2.0.0

Case

Forte Hotel Design
By Gary L. Lilien & Arvind Rangaswamy

Forte Executive Innes
Forte Hotels, a large European hotel chain, is developing a new hotel chain in the United States. The chain, named Forte Executive Innes, will combine the ambiance of a European hotel with American functionality and convenience. Forte decided to invest in this hotel chain partly to take advantage of the increasing numbers of business people traveling from Europe to the United States.

Company Background
Forte Hotels is the United Kingdom’s largest hotel chain. Its hotel brands include Le Meridien, Forte Crest, Forte Posthouse, Forte Agip and Forte TraveLodge. In addition, Forte Hotels includes an international group of 80 upscale hotels such as the Watergate Hotel, Washington, D.C.; Hyde Park Hotel, London; and King Edward Hotel, Toronto. Recently the company’s chairman, Sir Rocco Forte, announced that he plans to sell the TraveLodge chain in the United States. In its place, Forte Hotels will develop a new chain targeted toward European and American business travellers, Forte Executive Inne. Forte’s strategy in developing the new chain is twofold. European business travellers in the United States will recognize the Forte name and associate it with comfort and service. Forte executives also expect that American business travellers will associate the new chain with “pampering” that is often lacking in the mid-priced hotel chains, while at the same time perceiving the hotel to have all the functionality of American hotel chains. Although the hotels will have a European ambiance, the facilities and services will be comparable to those available in such hotel chains as Hilton, Sheraton and Courtyard by Marriott.

Preliminary Evaluation
A recent survey indicated that the top three reasons business travellers choose a hotel are price, location, and brand name. Forte Executive Innes would be mid-priced, around $100 per night. The company is in the process of securing several prime locations near suburban commercial centers throughout the United States. In addition, the company will leverage the Forte brand name in naming the new chain. Forte now faces the challenge of fine-tuning the specific characteristics of the hotel to ensure that it will appeal to both American and European business travellers. Copyright © 2007 by DecisionPro, Inc. To order copies or request permission to reproduce materials, go to www.decisionpro.biz. No part of this publication may be reproduced, stored in a retrieval system, used in a spreadsheet, or transmitted in any form or by any means – electronic, mechanical, photocopying, recording or otherwise – without the permission of DecisionPro, Inc.

A search of business databases provided some preliminary insights on the preferences of business travellers. Among men (60 percent of business travellers in the United States), price, location, and convenience are among the top reasons why a business traveller might try a new hotel. Women travellers place more emphasis on safety and cleanliness than do men. Although these considerations, combined with the overall image of the brand name, are important in generating trial, it is the hotel’s unique characteristics (attributes) that encourage repeat visits. Other recent surveys have suggested a range of potential amenities that interest at least 30 percent of business travellers. These include in-room computer facilities; on-site conference facilities; rooms with well-lit work areas with large desks and swivel chairs; and telecommunication facilities, such as speakerphones and data ports. A survey by a leading credit card company suggests that about half the European business travellers to the United States look for hotels that will look after them and let them relax. The others tended to look for hotels that would let them finish their business assignments quickly and efficiently. Given these...
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