Good Hotel: Doing Good, Doing Well?
Joie de Vivre (JdV) is a San Francisco based hotel management company with 16 properties in the city. It was founded in 1987 by Chip Conley. He knows that his company comes up with unique hotels, with own personality. It has managed to grow to 36 boutique hotel properties. It became the second largest in 2010. JdV had combined two of their properties, Best Western Hotel Britton and Best Western Flamingo. Pam Janusz is the general manager for Good hotels. She received a message inquiring that rumors were true that the owner of Good Hotel and the two other properties that Janusz managed since November 2009. Best Western Americania and Best Western Carriage Inn, had foreclosed on their holdings and sold the three properties, all of which were in JdV’s South of Market Street (SoMa) group to a new ownership group. She will be helping with the transition from one ownership to another, by evaluate Good Hotel performance along with helping staff to adjust. When it opened in November 2008 with 117 rooms, it opened as Good Hotel. Good Hotel is known as “hotel with a conscience”. It has a positive approach, eco-friendly hotel, and it known its recycled materials. This hotel believes in doing good things for the environment. The new group planned to run the three hotels themselves and they would end the management with JdV if no problems arose with the sale at the end of May 2010.
The lodging industry was dominated by twelve leading hotel chains in the United States in 2009. Out of these twelve leading hotel chains, each one of them has features that accommodate to one consumer but not to another. One of the bigger hotels may have more properties with so many rooms with very little to offer but low revenue, but another hotel with less properties with almost the same amount of rooms, more to offer and have higher revenue. In 2009, the lodging industry was suffering from chronic overcapacity. The prolonged industry downturn was expected to drop occupancy levels by 55 to 56 percent, representing the worst rate since the Great Depression, according to Standard & poor’s. Hotel occupancy had declined by 8.8 percent in 2009, and was forecast to drop by a further 0.2 percent in 2010.
They were geographically focused and product line diverse. Chip Conley had a vision on how to run his hotels. He says he went into hospitality because he enjoyed commercial real estate but hated the transactional part. “If you get it right and your customer sees the product as an extension of themselves, you’ve refreshed the identity of the customers because they feel that by using the product they’re becoming more of that aspirational self.” In 2007 he stated how they feel they are viewed with their branding strategy. “We went through a whole branding process, and what we heard from our customers was that they loved the fact that we create original hotels. We come up with a personality for the hotel by thinking of magazines. It is sort of like a good touchstone for personality.” He continues on to say, “You can be geographically diverse, but that means you have to be product-line focused. Or you can be geographically focused and the product line diverse. Holiday Inn is geographically diverse and product-line focused. We are the opposite of Holiday Inn.” JdV spent very little on marketing, preferring to rely mostly on word of mouth and social media promotion on Internet to attract guests to its hotels. Unique monthly visitors to social travel websites such as TripAdvisor.com and Yelp.com rose by 30 percent between the first half of 2008. In the last half of 2009, it rose to 15.9 million showing year-over-year growth of more than 30 percent in the first half of 2009 and 45 percent in the second half of 2009.
5 Forces model
Bargaining power of Suppliers: The two key suppliers to Joie de Vivre would be labor and real estate. These suppliers are defined as property owners,...
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