Today, the process of strategic management in the manufacturing and service sectors has become a vital phenomenon. Strategic management develops the competitive structure of organizations to adapt to changing market conditions and plays an important role in the success or failure of a business (Evans).
Nowadays, due to the highly competitive market, companies and institutions face a turbulent environment in business. Organizations need to recognize their current position, carefully analyze their strengths and weaknesses, and use their strengths to take advantage of environmental opportunities and prepare themselves to deal with threats. This important process is possible in the form of strategic planning (Schofield).
Meanwhile, the hotel industry is one of the most competitive service industries. The hotel and hospitality industry is highly dependent on the level of tourism, and on the other hand, the level of tourism depends on the quality of hotel services, so both sectors are interdependent (Major). Developing a good strategy can save these sectors even in times of recession or financial crisis. According to Angkasuvana, a good strategy must consider the available resources (people, money, manpower, materials, etc.) and in order for an effective strategy to be able to withstand market competition, it must consider all three pillars of market opportunity, resources and implementation. In this regard, I have chosen a hotel (Aramis Hotel) in Greece as a hypothetical example and I will try to formulate a management strategy based on its needs and current position in the competitive market.
Hotel description:
Aramis Hotel is a 4-star hotel located in a quiet area 2.5 miles from the center of Marco Polo and close to Athens Airport. Due to its proximity to the airport, it attracts many tourists and travelers. Its special features include air conditioning, excellent heating and cooling systems, minibar, free Wi-Fi, stylish furniture and a room equipped with a library and elevator. The interior of the hotel is fully equipped, including Flat-screen TV, Cable channels, DVD player and fireplace, bathroom with bathtub and spa, hairdryer and toiletries, comfortable beds, etc. The hotel is also known for its quiet environment, comfortable facilities, varied breakfast, friendly staff and reasonable prices. In addition, the hotel has a very large area of green space.
The market opportunities that the hotel has:
1- As the hotel is located near the airport and is a long distance from the city center and tourist areas, and without a doubt, not all tourists can provide a private car for travel, therefore one of their difficulties can be the problem of traveling and reaching scenic areas and beautiful beaches.Therefore, one of the market opportunities for this hotel can be to allocate one or two minibuses or vans and provide a tour leader to guide travelers. Another way is to conclude a contract with a tourist company to solve the problem of transferring passengers from the hotel to places of interest and vice versa systematically.
2- Since families are usually guests of the hotel with their children, setting up a place for children to play can be one of the market opportunities. Part of the large green space can be dedicated to setting up recreational facilities. Such as swimming pools and water sports, billiard room or special area for children to play, etc.
3- Due to the distance from the city center, there is no restaurant in the distance around the hotel. Another market opportunity for this hotel could be setting up a small restaurant on the outside of the hotel.
The characteristics of the targeted segments (e.g. demographic, geographic, behavioral etc.):
Having a good understanding of who a hotel's potential customers are, is critical to meeting their specific needs and developing a consistent management strategy. Identifying behavioral, demographic, geographical, and other customer characteristics will increase bookings, revenue, and guest satisfaction (Thielin). For this purpose, a series of basic questions must be answered by the management system, for example:
Where are the guests coming from? Guests usually come from European countries.
Are they local, regional, national, international? Most of them are international.
Which language(s) do they speak/ understand? They usually speak English.
What age groups are they usually from? Active young adults, young couples with or without children, families and a small percentage of the elderly.
What is the affordability of the hotel for different groups of people? It varies depending on the facilities of each room. However, on average 100 euros per night.
What is the guest’s purchasing power? 10% low budget, 50% average, 30% medium to high, 10% luxury.
What kind of people are usually attracted to the hotel? People who do not like crowds of hotels close to the city center and prefer to stay in a quiet place. In addition, being welcomed by friendly staff is a priority for them.
In general, answering these and many other questions will help the manager to establish his/her strategic policy. Hotel market segmentation is a way of dividing potential guests into groups based on a set of shared characteristics. Feature evaluation helps to attract more ideal guests to the hotel and maintains a competitive advantage in the end (Evans).
The brand image:
Today, branding is a hot topic in the business world. Brand identity is a priori for the brand image, so what the organization presents as its brand identity affects the consumer's perception of the brand image (Angkasuvana). Governments use stars to classify hotel levels Higher star ratings indicate luxury and thus help create a business image in the minds of customers. In addition, the brand image is something that an industry is known for among customers and makes it different from other competitors in business (Schofield). Aramis Hotel is a 4-star hotel, but what distinguishes it from others is that, it has a very flexible reservation. Customers can cancel their reservation until 09:00 on the day of arrival free of charge. Combining traditional Greek hospitality with modern elements is another special feature of this hotel. Mostly, the brand image becomes the organization’s operational strategy that allows it to strengthen the customer’s acquisition perspective.
The resources that the organization has:
Resources are one of the main foundations of startup and stability in an industry or service institution. Having strong resource management tactics is the key to stability and profitability of any institution (Major). Some expected resources for Aramis Hotel are:
Physical resources: Tangible goods and real estate, including materials, office space, service facilities, office equipment, vehicles, etc.
Human Resources: Hotel staff, anyone working or serving in a hotel, etc.
Financial Resources: Cash, assets, capital, profits, liquidity, shares, etc.
Technological Resources: Online booking technology, website and SEO technology, marketing technology, internet advertising, know-how, etc.
The implementation and execution of the strategic management policy:
After setting the goal and formulating the strategy, it is time to implement the strategy. Strategy implementation is a process in which the organization implements its operational plans and activities with the help of specific tools and frameworks and enables the organization to achieve its strategic goals (Thielin). As Evans states, the two main parameters for the realization of any strategy are “Organization Structure” and “Incentive $ Control Systems”. Control systems have two basic functions (Strategic control, Management control). Strategic control allows managers to evaluate the organization's program in the long run.Management control involves planning, organizing, directing, and controlling operations (Schofield). For example, a summary of the strategic implementation steps for the Aramis Hotel is as follows:
1. Identify specific goals and key variables
2- Determining the roles, responsibilities, internal and external relations of the hotel
3. Delegation of work and allocation of resources
4. Analysis of the strategic plan of operations
5. Execute programs, monitor work progress and ongoing support
6- Corrective measures (adjusting or modifying the strategy if necessary)
In conclusion, Strategic management in the hotel industry is a way to increase the quality of hotel services to guests on one hand and stability in the competitive market on the other. By formulating and implementing an efficient strategy, we can change services and low quality, high prices and old facilities, and then help attract tourists to boost the tourism industry.
Works Cited
Angkasuvana, Chaninan. “Strategic Management Practice in the Hotel Industry of Thailand.”
Researchbank. Jan 30, 2005. https://researchbank.swinburne.edu.au/file/01f91b0e-3159-41de-805d-f302984158ee/1/Chaninan%20Angkasuvana%20Thesis.pdf
Evans, Nigel. “Strategic Management for Tourism, Hospitality and Events.” Routledge.
Major, Tim. “Resource Management Strategies Hoteliers Can Borrow from Other Industries.”
RoomKeyPMS. May 30, 2017. https://roomkeypms.com/blog/resource-management-strategies-hoteliers-can-borrow-industries/
Schofield, Tara. “Strategic Management in the Hospitality Industry.” Study.com. Dec 5, 2019.
https://study.com/academy/lesson/strategic-management-in-the-hospitality-industry.html
Thielin, Florie. “Identify, Segment and Target your Hotel Customers.” Hotelminder. April 02,
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