Hotel Repositioning

Topics: Net present value, Hotel, Investment Pages: 12 (4002 words) Published: April 15, 2010
University of Derby/Buxton
Hospitality Management MA
Hotel Renovation A Tool For Repositioning In the Hotel Industry Submission Date: 7th May 2009
Business Analysis and Decision Making
Student: Nana Yaa Addo
Module Leader: Norman Dindsdale
The hospitality industry has grown phenomenally since 2001 and has been driven by both leisure and business demand (kloppers 2005). The needs of the consumer have now become dynamic rather than static. Consumers today have a strong desire for luxury in every sense of the word be it travel, goods or even a night stay in a hotel, thereby creating a competitive environment among business owners and organisations to come up with innovative ways to increase and also retain their business. Altstiel and Grow (2005 p.28) similarly states that “people do not buy things but rather a satisfaction of their wants and needs.” Therefore the hospitality industry being a service sector is not an exception as the industry must also meet challenges by formulating and implementing strategies that will meet today’s economic conditions and also satisfy customer needs. This report focuses on how hotel renovation can be used as a tool for repositioning in hotel operations. It will explore the theory behind repositioning and test the theory by looking at some case studies within the industry, it will also try to identify its challenges and successes and see how it could be undertaken in the future. Main body

The term repositioning has been used side by side with positioning, branding or new product development and has a wide range of definition, as a result it has no exclusive accepted definition. For example, the work of Hassien and Baum (2002p146) give the following definitions of the term which perceives a greater understanding. (Lovelock,1996;Lewis et al;1995) define the term as the changing of the existing position without referring to its implementation (Hart and Stapleton, 1987; Collin, 1989; Jefkins, 1987; Ries and Trout,1986) define it as an advertising strategy by which the company can change the image of its product and the perception of people about it. Booz, Allen and Hamilton (1982) define the term as one of the six categories of new products in terms of their newness to the company and to the marketplace, as being the process of targeting the existing products to new markets or market segment. In addition the business dictionary also defines it as changing a brands status in comparison to that of the competing brands. Furthermore Hassien and Baum go on to say that “an in-depth review of its literature identifies that there is a general agreement in most of these definitions, that repositioning involves a change to the image of a product in the market through changing the perception of the customer”(p.146) and finally define the term as “the marketing management process of changing, partially or totally, the perception of the public about a firm through any modification or addition to one or more of its controllable variables (eg. Customer, competition, technology, coporate, etc.) in order to retain, expand or change its target markets”(p.147) From the above definitions it is obvious that repositioning involves the modification of a product to make it more appealing in order to attract existing customers or new market segments The Concept Of Repositioning.

Due to intensifying global competition, a constantly changing environment, current consumer trends and modern technology, repositioning like any other marketing tool adopts a strategy in order to be successful. For instance Macmillan (2000, p45) states that ‘conditions in the global business environment demands that established firms adopt entrepreneurial strategies’. Johnson and Scholes(2002 p10) have defined strategy as “ the direction and scope of an organisation over the long term which achieves advantage for the...
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