IMPACTS OF SEASONALITY TO THE MANAGEMENT AND

MARKETING STRATEGIES OF HOTELS IN ANGELES CITY

PAMPANGA

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 Chapter 1

The Problem and Its Background

I. Introduction

Tourism is one of the biggest and fastest growing industries in the world, but it is

characterized by seasonality. Tourism as an integral part of global business is highly

dependent on the seasonal changes in climatic conditions, economic activities and as well

as the human behavior and the society in general (UNWTO, 2010). According to the

latest statistics of the World Tourism Organization, tourism industry along with the

hospitality industry has achieved an average annual growth of 3.5 % in terms of income

receipts, the highest growth rate among world industries such as Business Process

Outsourcing (BPO), manufacturing, financial institutions and other service industries.

However, compared to other industries, tourism and hospitality industry posed the

greatest risk in terms of seasonality. (Kotler, 2011; Simon, 2012)

Seasonality is known as one of the most typical features of the tourism industry,

affecting positively or negatively on tourism industry including the hotel industry.

Seasonality demands have been a major problem for the hotel industry and have a

negative impact such as difficulties in gaining access to capital, low returns on investment

and inefficient use of resources (Richards, 2010 & Simon, 2012). It has been a challenge

to make a business work during off season and work harder during the peak season as this

is the period when hotel management can take advantage of high number of guests. Thus,

provide positive impacts in terms of income generation. (Butler, 2000)

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 The hotel industry has been watching the impacts of seasonality both on the local and

international level. Based on the survey done by Travel Monitor (2010), one of the major

factors that affect the strategies of hotel management is the phenomenon of seasonality.

From demand forecasting models to yield management strategies, the different

mechanisms used to cope up with the peaking and falling number of guests have been the

subject of different industry researches. (Anders, 2010)

Studies showed that failure to cope up or take advantage of the operations of

seasonality may affect the success or failure of the hotel properties. Asia Travel (2011)

found out that at least 60 % of hotel properties introduced seasonality-aligned strategies

for the survival of the company. Among the remaining 40%, 23% of the properties who

did not succeed in analyzing the concept of seasonality did not enjoy a life span of more

than five years of operations.

Thus, is this study which is aimed at identifying the impacts of seasonality to the

management and marketing strategies being implemented by the hotels in Angeles City,

Pampanga.

II. Background of the Study

Seasonality is an important factor in business operations. Seasonality means

changes in business, employment or buying patterns which occurs predictably at given

times of the year (Kotler, 2011). It is defined as a seasonal fluctuations in economic or

business activity which occurs again and again regularly during a year as a result of

changes in climate, holidays and vacations (Butler, 2000). Seasonality indicates the

subject matter of fluctuations of demand or supply in the tourism industry which are

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effected due to weather conditions, public and school holidays. It introduces a number of

issues that require a special attention and strategies which affect the number of tourist

coming to the area and adding to the viability of the destination (Anders, 2010).

Hospitality industry is one of the major sectors of the tourism industry. Comprising at

least 60% of the total income generated by the whole tourism industry, it plays a vital role

to the operations of tourism around the world. The multiplier effect of hospitality industry

is estimated at 34 % distributing the economic impact in terms of foreign exchange,

employment, and operating income per se (Goeldner, 2006). The other sectors under

tourism such as food and beverage, tours, transportation and travel trade therefore, share

the positive benefits from the hospitality industry.

Being one of the major sectors under tourism, the hospitality industry is greatly

affected by the concept of seasonality. The effects can be reflected in terms of the number

of guest, and the data of visitor arrivals. Peak season changes occur when there is an

observable rise of guest arrivals on the property. On the other hand, lean season occurs

when there is an observable decline of guest arrivals. The data of visitor arrivals

characterized seasonality in terms of travel patterns that are formed which show the

different requirements of the visitors depending on their profile. (Buenvenida,2012;

Ramos, 2013)

Angeles City is an independent city found on the province of Pampanga. The

economy of the city is not dependent of the economy of the province which makes it

attractive to investors, both local and foreign. One of the important industries present of

the city is the hospitality industry. The industry has been observed on a progressive state

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because of the proximity of the city to the province’s economic and freeport zone, the

Clark Economic and Freeport Zone.

According to the local publication of Angeles City (2015), there has been a “dramatic

tourist arrivals” on the area. Last year, nearly a million visitors flock to the area. It was

noticed that the number of tourists was 19.65 percent higher than that of the previous

year. Because of this, the need to meet the capacity of this number of tourists affects the

management and marketing strategies of accommodation facilities. There are a total of 51

hotel establishments on the area which has to analyzed the operations of seasonality.

Adding to the pressure is the travel patterns formed by this big number of tourists.

This study will determine the implications of seasonality that may affect the

operations of the hotel establishments in the area. It will reveal the profile of the

establishments to determine the characteristics of the hotel. It will also establish a pattern

of seasonality that is existing on the area by determining the period that belongs to the

peak and lean season. The study is also aimed at determining changes on the strategies

being implemented to prepare and anticipate the concept of seasonality.

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III. Statement of the Problem

Seasonality greatly affects the operations of hotel properties wherever they are

located. The impacts on operations are focused on the marketing and management

strategies being implemented by the hotels in Angeles City.

In general, the study aims to find out the effects of seasonality in Angeles City,

Pampanga for the hotel industry in terms of the said strategies. The specific questions

which will be answered by this study include:

1. What is the profile of the hotel in terms of:

1.1 Number of Rooms

1.2 Years of Operation

1.3 Class of Service

2. How is the pattern of seasonality on the hotel establishments be described in terms of

period covered by peak and lean season?

3. What are the marketing and management strategies being implemented by the hotels to

prepare and anticipate seasonality?

4. Is there a significant difference between the marketing and management strategies

being implemented during lean and peak season when hotel establishments are grouped

according to their profile?

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IV. Objectives of the Study

The research is focused on determining the patterns of seasonality and its impacts to

the operational strategies of hotels in Angeles City.

The following statements outline the goals of the study relevant to the problems

raised previously. The researcher aims to:

 To understand the profile of hotel establishments in Angeles City

 To determine the pattern of seasonality by identifying the coverage of the peak

and lean season.

 To know the effects of seasonality for the hotel industry in terms of marketing

and management strategies.

 To identify the strategies that the hotels are implementing for the preparation and

anticipation of the phenomenon of seasonality.

 To compare the strategies of hotel establishments implemented during peak and

lean season in accordance to the profile group they belong to.

 To conceptualize a model that will be used for the operations of seasonality.

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V. Hypothesis

This research identified problems related to the operations of seasonality and how

does it affects the strategies of hotel establishments.

The problems defined will be investigated under the assumption that:

 There is no significant difference on the profile of hotel properties in Angeles in

terms of number of rooms, year of operations and class of service

 There is no significant difference on the pattern of seasonality among the hotel

establishments in Angeles City, Pampanga.

 There is no significant difference on the marketing and management strategies

being implemented by the hotel establishments.

 There is no significant difference between the profile of hotel establishments and

the types of strategies they are implementing towards seasonality.

VI. Significance of the Study

The research is deemed to be essential in determining a pattern of seasonality and the

aligned strategies of the hotels in Angeles City.

The hospitality industry will benefit from this study as it shows one critical feature of

the industry which is seasonality. Though unpredictable in nature, seasonality is one of

the leading subjects related to the operations of hotels. This study will show an overview

of the strategies being implemented by the establishments to counter-prepare and take

advantage of seasonality.

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 Industry practitioners can use this research as basis and guidelines for the

phenomenon of seasonality in the area. The pattern of peak and lean season as well as its

relationship to management and marketing of the hotel could help the members of the

industry to be adept with what is currently happening in the industry. They can adjust

their strategies based on the condition that is subject to seasonality.

Hotel establishments can also refer to the study as additional help in terms of

providing a diagram of strategies that can make them progress their operations. The

management and marketing function of the hotel will be positively affected as they can

assess the identified strategies if whether they are appropriate or not to their operations.

Hotel guests will also benefit from the study if the hotel establishments can conduct

and operate marketing and management strategies that are aimed at providing higher

quality of service may it ever be under peak or lean season.

The university can use the study as additional reference for business operations

considering seasonality as a current and critical trend. Since the topic is a critical factor in

operations, the results of the study can be used as benchmark.

The researcher will also gain additional knowledge regarding a topic that is not

commonly explored by other researchers. Being a business practitioner, the results of the

study can affect future decisions that will result to beneficial outputs.

Future researchers can use this study as reference regarding the topic of seasonality

that is deemed to be scarce as of this writing.

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VII. Scope and Limitation of the Study

The study will revolve around the determination of the effects of seasonality to the

hotel industry in Angeles City, Pampanga and its impacts to their management and

marketing strategies. This will also cater on how hotels in the cited area affected in the

peak and off peak seasons especially when it comes to the type of strategies that are

implemented on both seasons. This study will also cater the determination of the hotel

establishments profile, and pattern of seasonality which gives implications to the

operational strategies of hotel establishments.

The researcher will gather data from the hotels located in Angeles City, Pampanga

only. The researcher chose the research locale because Angeles City is a first-class highly

urbanized city located geographically within the province of Pampanga and possessed

features of hospitality industry which is prone to seasonality. Some of the hotels which

will serve as the respondents for this study will be the Lewis Grand Hotel, Widus Resort

and Casino, Holliday Inn, and Century Hotel. The selection of hotels will be passing

under an appropriate sampling technique.

The independent variables will be the profile of the hotel establishments and the

pattern of seasonality. The dependent variables to be used will be the changes in the

marketing and management strategies of the establishments brought about by the

operations of seasonality.

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VIII. Definition of Terms

Accommodation- accommodations : a place (such as a room in a hotel) where travelers

can sleep and find other services; a place where people can live, stay, or work

Acquainted- having personal knowledge as a result of study, experience, etc.;informed

(usually followed by with);brought into social contact; made familiar

Advantages- a condition or circumstance that puts one in a favorable or superior

position.

Ameliorate- to make better or more tolerable; to grow better

Climate- the weather conditions prevailing in an area in general or over a long period; a

region with particular prevailing weather conditions; the prevailing trend of public

opinion or of another aspect of public life.

Crowded- of a space) full of people, leaving little or no room for movement; packed.

Disadvantages- an unfavorable circumstance or condition that reduces the chances of

success or effectiveness.

Expenditure- an amount of money that is spent on something; an amount of time,

energy, effort, etc., that is used to do something; the act of spending money

Fluctuation- an irregular rising and falling in number or amount; a variation.

Mass tourism- is a form of tourism that involves tens of thousands of people going to the

same resort often at the same time of year. It is the most popular form of tourism as it is

often the cheapest way to holiday, and is often sold as a package deal.

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Off-peak season- Time of the year during which demand is lowest. Also called off peak

or value season; fares are cheaper tickets for traveling on trains that are less busy.

Offering good value for money, these tickets may require you to travel at specific times of

day, days of the week or on a specific route.

Peak season- the time of year when a lot of people travel and prices are usually at their

highest: Some travel companies offer deals even in peak season.

Phenomenon- a fact or situation that is observed to exist or happen, especially one whose

cause or explanation is in question; the object of a person's perception; what the senses or

the mind notice.

Seasonality- A characteristic of a time series in which the data experiences regular and

predictable changes which recur every calendar year. Any predictable change or pattern in

a time series that recurs or repeats over a one-year period can be said to be seasonal.

Tourism- is travel for recreation, leisure, religious, family or business purposes, usually

for a limited duration. Tourism is commonly associated with international travel, but may

also refer to travel to another place within the same country. The World Tourism

Organization (WTO) defines tourists as people "traveling to and staying in places outside

their usual environment for not more than one consecutive year for leisure, business and

other purposes.

Urge- to ask people to do or support (something) in a way that shows that you believe it

is very important ; to try to persuade (someone) in a serious way to do something ; to use

force or pressure to move (someone or something) in a particular direction or at a

particular speed

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Viability- is the ability of a thing (a living organism, an artificial system, an idea, etc.) to

maintain itself or recover its potentialities.

Visitors arrival- are defined as overseas residents arriving in a country or place for a stay

of less than 12 months

Weather- the state of the atmosphere at a place and time as regards heat, dryness,

sunshine, wind, rain, etc

Acronyms

WTO- World Tourism OrganizationCDC- Clark Development Corporation

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