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Analysis Of Hotel Case Study Essay Research (стр. 1 из 3)

Analysis Of Hotel Case Study Essay, Research Paper

Analysis of Hotel-Online Internet News Service

I. Introduction

The need to balance a company’s strategy and structure with changes in the external environment is obvious in any industry. However, in fast changing industries such as the Hospitality Industry, this need is even more

important. Hospitality operators have to keep track of changes in the mentality of customers, changes in the attitude of government agencies and legislators towards the industry, changes in economic and technological

issues, and strategic changes of competitors and other firms connected to the industry. This responsibility has been previously discussed by West: “The strategic manager [must] scan sectors of the environment which are

appropriate to the intended strategies of the firm, identify trends and changes within each sector, ascertain which require immediate response, interpret the potential effects of environmental occurrences on firm performance, and initiate appropriate firm response.”

Unfortunately, the fast-paced nature of this industry prevents most operators from spending adequate amounts of time monitoring the external environment; day to day operations always take precedent. For this reason, Internet news services such as Hotel Online may be the perfect tool for environmental scanning efforts in the hospitality industry. Hotel Online is a convenient service providing daily information on hospitality related news and events. It counts with nearly 3000 registered users from different hospitality related companies and institutions, although the total number of users is certainly larger (see Table 1). Registration to the service’s mailing list is optional, and the web page can be accessed freely by any person with a web browser

Table 1: Hotel Online Subscription Statistics (based on a random sample of 500 users)

Type of Subscriber Count % of Sample

Hospitality Companies 189 37.80%

Domestic Use 4 00.80%

Related Companies 167 33.40%

Educational Institutions 139 27.80%

Regulatory Agencies, Government 1 00.20

Totals 500 100.00%

The content of this paper represents a discussions of trends in the hospitality industry as determined by an analysis of the internet postings in Hotel Online. The project had a double purpose: to obtain environmental information of the hospitality industry and to determine the usefulness of the internet service provided by Hotel Online.

II. Research Methodology

The outcome of this project is the result of a content analysis of Hotel Online. The research involved analyzing the daily news postings in the server over a period of 30 days, between November 1 and December 1st, 2000. The analysis consisted of reading the title, first paragraph and the first sentence of other paragraphs of each article posted. Then, each article was qualified and placed in one of the following categories:

a. General environment categories:

1. Socio-cultural environment

2. Political environment

3. Economic environment

4. Technological environment

a. Specific environment categories:

1. Finance

2. Marketing

3. Research and Development

4. Operations

5. Administration

6. Human Resources

This classification scheme was taken form the work of Chon and Olsen (1987). As it is further described in Appendix I, these categories were divided into sub categories to increase the specificity of the research. In addition, each article was assigned a specific weight according to its length, in order to make a more accurate assessment of each article’s importance. However, it is difficult to find an appropriate measure of article space in a web page. Most articles in Hotel Online have very similar lengths and number of paragraphs. The most convenient measure found by the author was the number of “Page Downs” that it took to reach the end of the article (using a 14″ monitor with a display of 600 by 800 pixels). The weights were assigned as follows:

Table 2: Weight Assignment

Number of Page Downs Weight

1 to 2 1

3 2

4 3

5 plus 4

The total number of postings analyzed was 747 articles. This number is so substantial due to the daily nature of this online service. After these articles were analyzed, categorized and weighted, statistics were obtained to determine the major themes dominating the internet space of Hotel Online (see Appendix II for detailed statistics obtained in the research process).

III. Findings and Discussion

The first major finding of the research process was the fact that the majority of the news posted in Hotel Online relates to the U.S. national industry environment. The actual distribution of national vs. international topics is described in Table 3.

Table 3: Distribution of National vs. International Environment

Environment % of Hotel Online Space

National 88.75%

International 11.25%

Another major finding of the study was the predominance of topics related to the specific environment over the general environment (see Table 4). These two characteristics of Hotel Online slightly limit its usefulness as a complete environmental scanning tool.

Table 4: Distribution of General vs. Specific Environment

Environment % of Hotel Online Space

General 26.41%

Specific 73.59%

General Environment

With respect to the general environment, it has to be acknowledged that Hotel Online provides just a small amount of information. As it was just mentioned, the service is dominated by articles referring to the specific environment. In addition, the postings classified under general environment categories usually referred to industry-specific information (see Figure 1 for major trends in the general environment). Nevertheless, several major trends in the general environment were identified.

a. Socio-cultural environment:

In general, the trends identified in the Sociocultural environment of the industry can be summarized as increasing importance of the elderly in travel due to the aging of the general population, increasing willingness to travel, increasing acceptance of casino and gaming operations and increasing concern for safety in travel and lodging.

The aging of the American population is not news to anyone. It is a process that started with the appearance of the “baby-bust” generation, a period in which birth rates decreased considerably. Improvements in life

expectancy also contributed to this trend. The major trend identified in this project is the increasing response of the hospitality industry to this shift in customer needs. Some companies and destinations are specializing in

catering to the elderly traveler. As an example, Oregon coastal towns are taking advantage of their country-style, relaxing atmosphere to attract senior citizens. Lodging establishments in the area have adapted to serve the special needs of this group and are experiencing economic benefits in the process. It is important that all operators in the industry realize the increasing importance of this particular segment of the market. A recent

study concluded that mature travelers consider assurance, reliability, tangibility, responsiveness and empathy to be the most important customer service factors in a hotel. Operators must make sure that the service

provided emphasizes these characteristics when dealing with older guests. The implications on human resource management are obvious. Employees must be trained to provide a level of service that meets the expectations of this segment of the population.

Coupled with the good state of the economy in the U.S. and many other countries, there is an identifiable increase in the appeal of travel and tourism for the general population. Travel continues to increase, and

records seem to be broken every day. A very specific trend is the increase in the number of young people (ages 18 to 24) traveling in small groups on vacation. Hospitality operators must take notice of the importance of this

cost-conscious, practical group of travelers. Another identifiable trend is the craving for educational experiences in travel. Travelers want to increase their appreciation of nature and culture by traveling to specific

destinations where the potential for knowledge acquisition is greater. Destinations such as Virginia and some European cities are taking advantage of this situation.

With the opening of doors for gambling operations in many states of the country, there is an increasing social acceptance of this controversial form of entertainment. Many people are recognizing the economic benefits that such operations can bring to local economies, and more people are giving in to the temptation of attending casinos and try their luck. A perfect example of this trend is the increasing number of Native American tribes that are developing casino operations to support their families and preserve their way of life. Hospitality companies in general may take advantage of this shift in social perception to increase income through gaming operations in their establishments.

A final Sociocultural trend that has been present in the industry for quite a while is a concern for safe travel. A 1995 study on choice criteria of leisure travelers concluded that security is a primary decision factor in

choosing airlines, hotels and other travel related companies. Travelers discriminate among different service providers according to their safety records, a factor worth of special attention in the industry.

b. Political environment:

The major themes under both the legislative and lobbying aspects of the political environment concerned regulations on hospitality operations and the application of new taxes to hospitality companies.

Table 5: Distribution of Major Political Environment Aspects

Aspect % of Environment Space

Legislative 68.42%

Lobbying 31.58%

A specific trend concerning regulations on hospitality operations is the close monitoring of casino operations by different state and local government agencies. Many steps have to be followed to obtain permission to open, operate and maintain a gaming operation. Although several restrictions have been removed, it is still very important for gaming companies to be aware of existing regulations to avoid legal complications.

Another relevant issue is the application of new taxes on hospitality and travel companies as part of a new tax plan of the federal government. The U.S. Congress is considering a new airline tax that will severely increase the average price of a ticket and considerably affect the tourism industry of the country. The new tax is part of an income tax reduction plan for individual contributors. The government hopes that this hidden tax will

not be noticed by the general public, but the effect it could have on the travel and tourism industry must be acknowledged. This practice is nothing new. The Tax Reform Act of 1986 also shifted tax contributions from

individuals to corporations, including hospitality and travel companies. It is clear that this industry is already heavily taxed, and further burdens should be avoided. Hospitality operators must keep track of further

developments on this matter to adjust their operations accordingly.

c. Economic environment:

The major trends identified in the economic environment of the hospitality industry include an overall increase in tourism-related economic activity, an increase in the cost of traveling and an acknowledgment of

the potential of tourism as a generator of economic growth and employment.

The analysis undertaken reveals that most tourism destinations are experiencing increased economic activity and increased revenues as a result of tourist visits. It is obvious that the main reason for this trend is the excellent condition of the American economy in general. Many studies have discussed the close relationship between hotel room occupancy and trends in business cycles. Currently, his trend is also coupled with the increasing popularity of travel among the general population. Although a few destinations have experienced some problems due to a variety of external circumstances, the general economic picture in the industry is favorable. A clear sign of this situation is the constant development of tourism facilities (hotels, parks, shopping centers, etc.) nationally and internationally. The rush towards construction of new facilities has also

resulted on an increasing need for financing and capital investments.

Another situation that has surfaced in this environment is the palpable increase in the cost of traveling. According to AAA, for instance, the cost of lodging in the U.S. has increased by 3% in 1997 compared to the

previous year. A result of this economic reality is the increased popularity of motels and other low cost establishments. There is a nationwide boom of motel construction that is mentioned constantly in hospitality publications.

Finally, it has been found that there is an increasing appreciation of the value of the hospitality industry as a creator of jobs and a generator of economic growth. This was the most popular subject in this category. It

is no secret that the hospitality industry is the second in importance globally, and it appears that it will not lose that position in the foreseeable future. An example found in the research process is the situation of Cuba and its reliance on tourism as a way out from its economic difficulties. The tourism sector of Cuba’s economy is closing in on sugar production as the major industry of the country, and it has been a provider of international investment since 1990. With respect to the jobs created by the industry, the adoption of a plan by the eight most industrialized nations of the world (the G7, plus 1) to rely on the industry to provide labor opportunities in each country underpins the favorable outlook of economies where tourism plays an important role.

Table 6: Distribution of Major Economic Environment Aspects

Aspects % of Environment Space

GNP Trends 3.01%

Fiscal 8.27%

Monetary 0.00%

Labor 4.51%

Trade 84.21%

d. Technological environment:

The technological trends identified through this research are very specific to the hospitality industry, but are closely related to technological improvements experienced globally. The major tendencies in technology call for an increased use of the internet, a constant development of new technologies to improve hospitality operations and the creation of new technologies to improve food handling, processing and sanitation.

One of the most popular topics today is the wonder of the internet. It appears that every industry has at least experimented with this new technology, and the travel and hospitality industry is not an exception. The

major uses of this technological marvel include the development of internet-based reservations systems, the creation of web pages as marketing tools, and the use of the internet as an outlet for increasing research and

education in the field of hospitality. A curious development is the incursion of some companies into the business of gaming through the internet. Virtual casinos seem to be popping up everywhere. Hospitality

operators must maintain themselves updated with the new ways this technology can be used to improve their operations and increase sales.

A recurrent topic throughout this environment is the continuous development of new systems, machinery and software to aid the hospitality operator. Major developments include new PMS systems, new reservations

systems, new safety and security systems and some new facility designs that enhance customer appeal and ease of operation. An example is the emphasis on the development of new entertainment options for travel and lodging customers. The trend towards offering video-on-demand features in hotel TV systems, in-room video games and electric outlets in airplanes is widespread, and it will probably continue in the near future. The

hospitality operator must keep informed of these technological improvements in order to remain competitive in a market where the customer is increasingly demanding cutting-edge services.

A minor theme covered in the analysis was the development of new products and technologies geared specifically for food operations. Food sanitation is a big concern, and some companies are coming out with products that help increase the safe handling on perishable goods. An example is the invention of a bacteria-fighting towel to be used by kitchen personnel to avoid food contamination. Due to the potentially damaging effects of a food poisoning situation, F&B and restaurant managers must take advantage of

these technologies to avoid such complications.

Table 7: Distribution of Major Technological Developments

Aspects % of Environment Space

Computer, Electronic 63.16%

Equipment, Facilities 30.53%

Food Handling 6.32%

Specific Environment

As mentioned before, the news provided by Hotel Online is quite industry specific. As a result, most of the postings were related to management practices of several hospitality related companies. This characteristic allowed the researcher to determine major trends experienced by the hospitality industry in the six main functional areas of management. After the analysis of these trends was completed, it was clear that most of them were outcomes or effects of the general environment trends identified earlier. As it is described in Figure 2, the most important topics appearing in Hotel Online related to finance, marketing and operations, as opposed to