Marketing Strategies to Counteract Recession in Hotels

selling Strategies to Counteract Recession in HotelsWhat marketing strategy is best workd to counteract the ca workout of a authorisation respite on the quadruple trail hotel industry in the UK economy?Condecadets (Jump to)Background and Research AimsLiterature ReviewProposed methodological analysisResearch outline and Resources RequiredReferencesBackground and Research Aim pecuniary charge (2008) reported that, at a recent CIMA forum for fiscal forecastors in the UK, the majority of the delegates believed that the global economic crisis has had far reaching impacts, and impart nigh likely cause a recession in the UK in the near future. This is a view which it widely matched by Campaign (2008), which betokens that the glide path economic downturn is likely to get adverse impacts on tout ensemble industries in the UK as consumers, and hence vocationes, reduce their spending. However, this article does not counsel that businesses simply give up on attracting new custo m, arguing that the businesses with the near successful and creative marketing strategies are likely to be the unitys who not only survive any say-so recession, unless excessively value from it.As such, it is clear that there are two main potential strategies for hotels as the economy begins to contract. They cease either choose to contract their operations, rivet on operational efficiency and aiming to cut costs wherever possible, or they can look to use the recession as an opportunity to maturation their competitiveness over and higher(prenominal) up their rivals. This can be achieved via a instruction on improved efficiency, costs, quality, or general marketing. However, the argument of Campaign (2008) above tends to indicate that marketing is the main method by which hotels, and businesses in general, can differentiate themselves and maintain revenue and market share in the boldness of a recession.Both of these strategies are equally valid, however this piece resul t aim to focus on the more positive of the two the use of a marketing strategy to counteract the effects of a recession on the UK hotel industry. The hotel industry in the UK is very broad, ranging from the cheap and basic one and two track hotels, up to the extremely luxurious five lead offerings which grace numerous major destinations. However, the majority of attention tends to focus on these two ends of the spectrum, with little thought being given to strategic instruction and planning for the mid range hotels such as four star offerings. As such, this piece allow for concentrate specifically on the four star segment, in swan to determine what factors drive consumer demand and business success in this segment, and how these factors can be used to develop a marketing strategy to help four star hotels in the UK cargo area the impact of a recession.Literature ReviewMany hotels have already started planning for a recession, particularly in the United States, where the economy is in a more advanced stage of recession than the UK. As such, there is value to be obtained from looking at the strategies memorizen by hotel bondage in the US. In particular, Ricca (2008) considers the strategy of the Wyndham Hotel Group, which intends to improve its marketing in order to boost its performance, as thoroughly as looking to improve its roll management and service levels. In addition, the chain volition look to boost the use of its loyalty program, helping to grow the companys print identity as well as to drive revenue higher in the short term (Ricca, 2008). Another useful study from the literary productions comes from Barsky and Nash (2008) who reveal that higher end and luxury hotels tend to perform separate during a recession when compared to other classes of hotel. This implies that the four stars may be commensurate to improve their performance by aiming to become more exclusive. In addition, Barsky and Nash (2008) argue that hotel should not aim to cut back on prices and services in a recession, but instead they should aggressively market themselves and focus on customer service, in order to be more competitive than others in the market.Further to this, a major study by ONeill and Mattila (2006) name that the net operating margin of a hotel tends to be driven nigh strongly by its average occupancy level, and that the average price per elbow mode was less significant. However, this study to a fault showed that the market segment in which the hotel operated the hotels age any affiliation to a major brand and a hotels coat and location also had strong effects on financial performance. This is based on data from the last slowdown in the hotel industry, in 2002, when global terrorism and the dot com crash saw many hotels in trouble. The hotels which performed best in that year were the ones which focused on ride strong occupancy, rather than looking to cut back in size or expenditure. However, ONeill and Mattilas (2006) study shows that the mid range hotels were the ones which suffered most in the last slowdown. Looking at the original economic context, Lloyd-Jones (2008) argues that the current state of the economy, combined with the general consensus amongst analysts that a recession is quite likely, essence that hotels need to start preparing now. As such, Lloyd-Jones (2008) recommends that property managers should look to use the copious range of their marketing strategy, right across the 7Ps, to achieve the most economic balance between occupancy levels and room rates.Proposed MethodologyUnfortunately, given the changeful nature of the economy, and the fact that no one can accurately shout the nature and severity of any potential recession, it is difficult to be normative about the ideal strategy for a hotel to take to mitigate the effects of said recession. As such, this piece will arguably need to take an approach more in line with contingency theory, where it can make believe specific re commendations based on the circumstances of individual hotels. This implies that the main methodology should be to use interviews with hotels who are preparing for a potential downturn, as well as those with experience at surviving previous downturns. By find what strategies, if any, the most successful chains are using to overcome a potential recession, it should be possible to develop a detailed typology of the potential strategic choices hotels can make to deal with economic downturns, and the circumstances in which each strategy is most appropriate.In order to give this typology schoolman value, it should be firmly based in an existing academic good example. The framework chosen for this paper is the 7Ps extended marketing mix. The 7Ps are based on the 4Ps introduced by McCarthy (1960) Product, Price, Promotion and Place. However, the 7Ps extends this to include another three factors. Whilst there is whatever debate over what these factors should actually be, with various w riters proposing People, Processes, fleshly Layout, Provision of Service, and Physical Evidence this piece will focus on the three find by Booms and Bitners People, Processes and Physical Layout (Kotler and Keller, 2005). This 7P framework will be used to wee-wee the typology, and also to drive the interviews.The interviews will be equipage structured interviews, conducted with both(prenominal) senior members of rung from a wide selection of four star hotels throughout the UK. Semi structured interviews have been chosen because they will conquer the interviewer to investigate the desired range of topics, whilst also giving the interviewee the chance to digest additional details or to clarify certain points. The main themes for the semi structured interview will beTo determine whether the interviewee has worked at a hotel during a previous recession and the steps they took to overcome that recession.To determine what steps, if any, have been taken to prepare for a potential c oming UK recession.To determine the intent to which these steps are marketing focused.To determine which of the 7Ps the interviewee deems most important in using marketing to overcome the effects of a recession.Research Strategy and Resources RequiredIn order to fully ground the typology in the metaphysical framework, it will be indispensable to obtain a full sense of the 7Ps framework and its application to hotel marketing. This will be achieved via a complete reexamine of the literature around marketing and the hotel industry. As such, it will be necessary to spend a significant amount of time using libraries and online resources to retrospect a wide range of literature on the subject. This research should also involve a detailed study of the literature around the effects of a recession on consumer demand, and strategies which businesses in general can use to handle a recession. This will be of use in helping to validate the potential strategies which emerge from the intervi ews, and generally in helping to direct the interviews.Ideally, the interviews will all be conducted via the telephone. This will save on start costs and time, as well as making the process accomplish smoother. Initially, a large number of four star hotels, around fifty, will be contacted by phone or e-mail, to enquire about the curtain raising of interviewing senior staff. This will hopefully allow for at least ten interviews with senior staff members across the UK. Once agreement has been obtained, the relevant staff members will be contacted to arrange an appropriate time, and length of time, for the interview. It is expected that this will simply require a telephone and a quiet room where the interviewer is unlikely to be disturbed. A recording device will also be useful, to help with transcribing the interviews later. As the data will be primarily qualitative, there will be little need for any statistical analysis tools, and an appropriate research paradigm will be selected as needed. All interviewees will be informed that the interview is being recorded, but all respondents will be guaranteed complete anonymity.ReferencesBarsky, J. and Nash, L. (2008) Are luxury hotels recession-proof? Hotel Motel caution Vol. 223, Issue 10, p. 14.Campaign (2008) Creativity wont lose its value, even in recession. Campaign Issue 16, p. 20.Financial Management (2008) UK FDs braced for downturn. Financial Management June 2008, p. 6.Lloyd-Jones, A. R. (2008) The Prognosis for Hotel Occupancy and Average Rate in a slowness Economy. Real Estate Finance Journal Vol. 24, Issue 1, p. 29-33.McCarthy E. J. (1960) Basic Marketing A Managerial Approach. Homewood IL Irwin.ONeill, J. W. and Mattila, A. S. (2006) Strategic Hotel Development and Positioning. Cornell Hotel Restaurant disposition Quarterly Vol. 47, Issue 2, p. 146-154.Ricca, S. (2008) Wyndham Recession strategies in place. Hotel Motel Management Vol. 223, Issue 10, p. 1-62.