Professional Documents
Culture Documents
Sample Sales and Marketing Plan Hotel
Sample Sales and Marketing Plan Hotel
Executive summary
The Imagery hotel is an established luxury hotel located in the XYZ city of India. The
hotel is part of a renowned chain of hotel. The hotel has been an industry leader in the
city since its inception in 1991.
The hotel follows the objectives that are consistent with the company’s goals and mission
statement. In the year 2011, The Imagery Hotel is targeted to contribute sales revenue of
INR 165 Million against a projection of INR 140 Million. The Imagery Hotel, has to
further maintain its market leadership in the city by achieving the highest RevPAR
Premium.
Introduction
The Imagery hotel located in XYZ city offers breathtaking views of the sea perched on
the shore of Bay of Bengal. Imagery hotel is a part of renowned hotel chain of India that
has been a domestic market leader closely competing with 2 more major players. The
brand recall among the travelers is high and customer perception is of high service
standards at a high price.
Imagery is the first five star hotel to have appeared in the city in year 1991 followed by
two additional competitors following similar price guidelines and similar room
occupancy patterns.
Current Product Offerings
The Imagery hotel is a well known 95 rooms small high end hotelthat not only provides
accommodation facilities to its guests but also a host of other services such as food and
beverage (One Chinese Specialty restaurant, one coffee shop and one bar), spa,
healthclub, pool, massage etc. 65% of the revenue share is contributed by the room
division sales. All the rooms in the hotel have recently been refurbished and the
technologies have been upgraded to ensure a better guest satisfaction on the product
front.
The Physical Product – Ansoff’s product growth matrix in appendix 2 indicates the
hotel to increase the market penetration. While considering the GE portfolio matrix (As
appended in Appendix 2), we should hold our position by holding onto the current share
and margins. In order to defend our share, following strategies can be applied:
Maintaining the customer value
Maintaining the market communication
Continuous product improvement
The Brand – The brand of The Imagery Hotel is well established and gives a high end
luxury perception in the market. The parent chain of The Imagery Hotel uses House
Branding strategy.
Taking in account the past data, domestic feeder markets to the city are Chennai,
Mumbai, Delhi, Hyderabad and Kolkata. Internationally, Russia, Spain, Italy and China,
are the major feeder markets. The recent economic meltdown affected all these countries
and thus the business in the sectors like IT support, Logistics and Shipping was affected.
However, the hotels managed to sustain due to an increase in the visitors working on the
long term government projects. This however, decreased the hotel ARRs due to lower
entitlement of these visitors (As declared by the government). Imagery hotel believes that
since hotel accommodation service is highly perishable with a shelf life of just one day, it
needs to be sold at the highest possible rate for the day, thus it chose to accept the lower
rated government businesses in order to accommodate for the lost chunk from higher
paying sectors such as IT support, Shipping etc and attained market leadership in the city.
Appendix 3 refers to the past performance of the city hotels and industry trends. The city
occupancies have dropped by 15% over the period of last one year due to economic
instability. In order to sustain, hotels were forced to reduce their prices and thus ARRs
2
decreased by 10%. An overall decrease of 25% has been cited in room revenues in the
city. Imagery hotel has shown a 17% increase in its RevPAR Premium owing to
following factors:
Imagery hotel decreased ARR by 19% in order to achieve 4% increase in the
market share.
Competitor 1 losing 25% of its market share because of its reluctance in
compromising with the rates (Competitor 1 has increased its ARR by 8% over the
Last year).
Least degrowth in room revenues of Imagery hotel.
Gaining the competitor 1’s business (Increased by 18%)
New projects (Majority of them being government backed) in the city is expected to
increase the footfalls in XYZ city thus generating an increased demand as compared to
Last Year (The data collated from various market sources – Various MNCs, SMEs &
industry development authorities of the state.). Data shows an upward movement in
RPDs from 200 in 2009 to 300 in 2010. From the data collected, the 300 footfalls is
expected to increase to 375 in 2011.
By 2nd quarter of 2012, however, ABC hotel will open up to add up another 120 room
inventory (Increasing the available city supply from 260 rooms to 385 rooms). As per the
calculation the overall occupancy percentage may go up by 1.2%. The addition of fresh
inventory will allow end user to witness a better playground of bargaining. As a result,
while 1st quarter will show a consistent upward trend in city ARR, it will start falling with
the advent of 2nd quarter. Hotels will thus have to strive & increase as much revenue as
the possible in the 1st quarter itself in order to fill up the deficit that may arise from 2 nd
Quarter of 2011 onwards.
Environment
The current environment in the city seems to be highly volatile with following forces
changing the market dynamics on an uncertain basis:
Political Environment – The current state of politics in the state is highly
unstable with a group of politicians working in order to get the region passed as a
separate state. In such a case, there might be instances of MNEs pulling off their
investments around the city affecting the hotel business adversely. However, on
contrary, since the city will gain a reputation of state capital, it may attract further
investment thus generating business for hotels. The matter is unpredictable and
makes the future highly uncertain.
3
Economical Environment – The regional economy is going through the ripples
of economic instability of EU and USA and affecting the business as discussed
initially.
Social Environment – The parent hotel chain is run by a trust under a bigger
brand. The trust believes in social causes and donates a part of Profit into a charity
that helps the victims of any terrorist attack across the world.
Technological Environment – Continuous improvements and technological
enhancements call for a need of constant updating in order to maintain the product
superiority over competition.
Legal Environment – With an unpredictable political future, the legal
environment also is subjected to controversy since new legislative regulations will
come into play ones the verdict is given by the government.
Ecological Environment – The hotel has acquired various initiatives for
sustainability. Some of these are waste reduction, reusing and recycling, constant
monitoring of gas, oil and electricity usage etc.
The environmental factors can further be explained on the basis of Porter’s five forces
model in the appendix 4.
4
SWOT Analysis
Imagery hotel, on one hand has various advantages to its side that it can leverage to its
advantage, while on other hand; it has some disadvantages that need to be looked into.
The SWOT analysis below will discuss the same.
5
Market overview
Imagery hotel currently has six well defined market segments with eight subsegments as
shown in the model below:
Figure 1
Each of the market segment has been coded (Codes are mentioned next to each segment)
for an ease of reference at later stages. The structure of the past segment mix for
competition was also made in year 2010 – 2011 based on the market feedback, resident
guest feedback, taking information from competition employees, our own employees and
meeting competition guests on various occasions. The data was then verified with the
market figures being shared on a regular basis to prove the genuineness of figures.
Following graphs give a segment mix of the competitive set in the city in terms of
occupancy level contribution and revenue contribution.
Figure 2
6
Sales and Distribution
The segments as mentioned above utilize our services from the following distribution
channels (Please refer to segment codes in Market Overview):
Figure 3
In line with the parent companies vision, The Imagery hotel follows following objectives:
Financial Objective: To achieve the budgeted revenues of INR 165 Million for the
financial year 2011 – 2012
Competitive Objective: To achieve the market dominance by achieving the
highest RevPAR premium in the competitive set.
7
attract leisure groups to fill up on the weekends. The competitor 2 has traded this
segment with Long stay.
Long Stay: The imagery hotel has taken a conscious decision to use this segment
as filler so that the gap created by corporates on weekends can be traded off with
this segment. In case of Imagery hotel, this segment contributes to 35%
occupancy share but only 20% revenue share. There is a huge gap evident in this
case when this figure is compared to the competition figures. Competition hotels
seem to have customers who are paying comparatively more to them. The reason
of the same could be our historical data that shows we do not receive support
from Negotiated National Accounts sub segment. This segment has higher paying
capacity and our reports confirm their usage of competitors. The field sales team
will play a major role in identifying the competitor customers in this segment.
Conferences: The imagery hotel has maintained highest share from the
conferences due to the largest conference hall that the hotel built two years ago
within its premises. Since the hotel has largest conference hall, it charges a
premium to the guests attending the conference and using its accommodation
facilities. This segment contributes to 15% to occupancy and 15% to the revenue
of The Imagery hotel. The strategy of charging slight premium to this segment
will be continued.
Groups: Since Imagery hotel is a business hotel, the share of groups is lower it.
The highest share for Groups is for Competitor 1 due to its location advantage
(Located on the beach). It will be wise not to disturb that segment from
competition since The Imagery Hotel is not fully equipped to provide a beach
resort experience. However, the plans could be taken up by the corporate office at
a later stage to revamp the facilities and connect the hotel directly to one of the
close by beaches.
Events: The XYZ city due to its size is not able to attract a lot of events. This is
evident in the overall city performance as well. Being a competitive product in
terms of brand value and domestic recognition, Imagery hotel can continue
charging a premium to this segment.
Crew/ Layover: City XYZ does not have any crew base due to its size and
location.
8
Brand Marketing Decision – Brand value enhancement to be undertaken in line with the
corporate marketing strategy. Owing to renovation and product upgrading, brand value
can be revamped this year to maximize the room revenue. On a local level, the hotel will
get associated with the high end exclusive shopping arcades, monthly magazines etc for
joint promotional activities.
Pricing Decisions
In line with the overall company strategy, The Imagery Hotel plans for 10% increase in
published tariff. The expected published tariff is attached in Appendix 5. It also carries
the pricing template to be followed in order to load rates on all the channels. For
corporate rate negotiations, rate tie up negotiation guidelines are also given in Appendix
5. The hotel has prepared an expected demand calendar that considers the past occupancy
trends and future Business on Books. Accordingly, dynamic discounted price (Rate of the
Day) has been set against each day of the year. The rates are to be loaded on the system
and will be visible on all the distribution channels simultaneously. These rates can be
changed by the hotel as and when required.
Channel Decisions
Figure 3 shows the distribution system of The Imagery Hotel. As per historical data,
maximum revenue for the city hotels is achieved from reservations offices, sales offices
and electronic channels (GDS Channels). The Imagery Hotel will attain a strong channel
support by concentrating on following aspects:
Sales Offices: Sales blitz to the domestic feeder markets to be done by the hotel
sales team. An aggressive push is required from Sales offices to increase the
business. For this, new brochures will be helpful.
GDS Channels: The hotel receives GDS/ Electronic channel booking requests
from Galileo, Sabre, Worldspan and Amadeus. Out of these, Galileo and
Amadeus contribute maximum to the city hotels. In year 2010 The Imagery hotel
received a fair share of 46% from Galileo which is highest in the city, however,
there is a scope of improvement in the Amadeus channel wherein the hotel
received only 24% of fair share. In the year 2011, The Imagery Hotel needs to
promote itself more aggressively on Amadeus by joint marketing programs and
tie ups, online virtual store and channel advertising.
9
teams that are scheduled to stay with us in March, June, August and September
will increase the buzz surrounding the hotel.
Sales Promotions: Channel selective sales promotion for Amadeus will be
initiated as earlier discussed. Familiarization Trip is to be arranged for the major
business sources in order to showcase the improved product (As discussed
earlier).
Personal Selling: Sales team will continue to visit the corporate houses and
maintain the relationship with existing users (Retention Accounts) and to flourish
the relationship with the competitor users (Hit Accounts).
Direct Marketing: Reservation department has been given an authorization to go
1 level below the approved Best Available Rate as mentioned on the Demand
Calendar in case they feel the customer is not willing to pay the rate of the day.
People Decisions
The Imagery hotel attracts a healthy talent pool due to its brand and generous salaries. In
the forthcoming year, employees in direct guest contact especially the once from Front
office and reservations will be authorized to take their own decisions which is discussed
further in the next section.
Process Decisions
In order to make the decision process faster, employees working in the Front Office
Department are authorized to do the following in order to do customer recovery in case of
a complaint:
Charging one slab lower than the Best Available rate of the day.
Including a breakfast/ lunch/ dinner complimentary in the rate
Including a complimentary airport pick up/ drop in the rate.
Including a complimentary fruit basket/ cookies platter in the room.
Marketing Programs
A calendar has been prepared for the marketing activities to be conducted in 2011 and
can be referred to in Appendix 6.
10
APPENDIX 1
The 7 P’s Marketing model
The Sales and Marketing plan uses the above 7 P model to attain the objectives as
mentioned in the plan.
APPENDIX 2
Ansoff’s Matrix
The Ansoff’s Matrix is showing the current hotel positioning in the market. The product
exists in an already existing market. So the strategy should be of market penetration
11
GE Portfolio Matrix
The GE Portfolio matrix above shows the positioning of the 3 hotels in the city. The
circles carry the revenue share of each of the hotels. The Imagery Hotel has a very high
competitive edge but located in an unattractive market due to low demand. Thus, as per
GE portfolio matrix, it falls under zone 2, which suggests following strategy (Maximize
profits while maintaining position):
12
APPENDIX 3
13
APPENDIX 4
Following is an analysis done in order to find the effects of factors on hotel industry in
the city as per Porter’s 5 forces model:
14
attractive environment by tourism
promotion channels
Political instability in the state Development of corporate and industry
environment.
Existence of existing brands with a first
mover advantage
15
demands as per fluctuations
More supply then demand
APPENDIX 5
16
17
Appendix 6
18
Glossary
19
RevPAR Premium
Also referred to as RevPAR (Yield) Index. “A
RevPAR (Yield) Index measures a hotel’s fair market
share of their segment’s (competitive set, market,
submarket, etc.) revenue per available room. If a hotel
is capturing its fair market share, the index will be
100; if capturing less than its fair market share, a
hotel’s index will be less than 100; and if capturing
more than its fair market share, a hotel’s index will be
greater than 100” (STR Global, 2010).
Room Revenue
“Total room revenue generated from the sale or rental
of rooms” (STR Global, 2010).
Bibliography
International Monetary Fund, 2010. World Economic Outlook 2010, Chapter 2.
Washington DC: International Monetary Fund.
20