MACRO ENVIRONMENT:

The macro environment consists of those factor which affects all firms. They are:
 Demographics
 Economic Conditions
 Competitions
 Political and Legal Forces
 Social and Cultural forces
 Technology

Any change in any one of them can cause changes in one or more of the others. Hence they are
interrelated. These forces are largely uncontrollable by the management. Let us see how these External
Macro Environment factor affect the PC hotel one by one.
 DEMOGRAPHICS:
Demographics refer to the characteristics of human population including such factors as size,
distribution and growth. Because the people constitute markets, demographics are of special interest to
the marketing executives.
The PC Hotel makes its market mix on the basis of the following Basic Demographics.
1. Income
2. Occupation
3. Gender
4. Social Class
5. Family cycle

 COMPETITION :
A company’s competitive environment obviously has a major influence on its marketing programs. The
PC Hotel Rawalpindi is in straight competition with the following hotels:

 Serena Hotel (5 star category)

 Marriott Hotel (5 star category)
 Holiday Inn (4 star category)
 Islamabad Club
 Hotel Shalimar (weak competitor)

 When ranking these hotels according to their room occupancy rate, dine in rate, and their
growth and business rate, the ranking is as follows:
 Serena Hotel
 Marriot Hotel
 Pearl Continental Hotel
 Holiday Inn
 Islamabad Club
 Hotel Shalimar

 Due the terrorists attack on Marriot Hotel few months back, it is now closed. So the PC Hotel is
enjoying the 2nd position. 

 The dine in rate of the Marriott and Serena Hotel is almost the same. Because both these hotels
are situated in Islamabad and the quality of food and services is the same. The average dine in
 percentage of Marriott and Serena Hotel of each day is about 85% to 90%. The PC hotels lags
behind Marriot and Serena Hotel. The main reason for this is that PC is situated in Rawalpindi
sadar. Mostly the rich people live in Islamabad. It is very difficult for the Islamabad people to
come to PC for dine in purpose because of the long distance. Marriott and Serena hotel provide
the same quality of food and services so the Islamabad people opt for Marriott and Serena
rather than PC.

 The average room occupancy rate per day of PC hotel is 40% to 45% of the total no. of rooms.
The PC hotel has total 200 rooms.
 The average room occupancy rate per day of Marriott hotel is 75% to 85% of the total no. of
rooms. The Marriott hotel has total 250 rooms.
 The average room occupancy rate per day of Serena hotel is 75% to 90% of the total no. of
rooms. The Serena hotel has total 250 rooms.
 The average room occupancy rate per day of Holiday Inn hotel is 75% to 80% of the total no. of
rooms. The Holiday Inn hotel has total 200 rooms.
So terms of room occupancy rate, the ranking is
7.Serena
8.Marriott
9.Holiday Inn 

There is a strong competition among the hotels of Rawalpindi and Islamabad. PC Rawalpindi won an
exclusive contract for the lodging of cabin and cockpit crew of the national carrier, Pakistan
International Airlines (PIA). This same contract was with Marriott Hotel 4 years back. But PC hotel
offered cheaper room rates, therefore PC won the contact over Marriott. Same case also happened last
year. PC was given a contact for lodging the crew of the West Indies Cricket team, but at the last
moment this contract was snatched from PC and given to Serena Hotel as Serena was giving rooms on
cheaper rates. The Serena Hotel was in contract with Emirates airline lodging of cabin and cockpit crew,
but after the Marriot bomb blast, Islamabad hotels were declared dangerous. The emirates ended their
contract with Serena and gave the contract to PC Rawalpindi .

 POLITICAL & LEAGAL FORCES:

Every company’s conduct if influenced, often a great deal, by the political and legal processes in our
society. The political and legal forces on marketing can be grouped into the following four categories.

1. Monetary and Fiscal policies

2. Social Legislation and regulations
3. Govt. relationships with the industries
4. legislation related specifically to marketing.

Affect of political and legal forces on PC Hotel:

 Hotel industry in Pakistan has been under a lot of stress in the past few years due to the severity
drives launched by the successive government, the deteriorating law and order situation in the
country and continued duty of large number of taxes. This industry is dependent upon the
business and tourist activity in the country. In Pakistan, repeated efforts with the government to
come to the rescue of the hotel industry have so far been all in vein. The business activity in
Pakistan has overall remained sluggish. Tourism, also, has never been properly emphasized,
 including development of tourist spots and support infrastructure, despite the exquisite scenic
beauty of the landscape of Pakistan and its rich cultural heritage. The fall in foreign nationals
traffic to Pakistan in the upshot of September 11 incident and frequent acts of terrorism have
continued to adversely affect the hotel industry. 

 After September 11 there was a slight downfall in the growth of PC hotel. But from the last 2
years, PC hotel is facing a serious downfall. People have reduced their visits to any hotels
because of the terrorists attack. Pakistani people have started to avoid visiting those places
where there is a crowd. PC hotel faced a historic setback after the Islamabad Marriot attack.
From that day, people have almost quit, going to the hotels. The average dine in percentage of
one day used to be 75% to 85%. But after the Marriot attack, the percentage has dropped to
65% - 75%. However, this percentage is slowly increasing with the passage of time. The average
room occupancy rate per day of PC hotel is 40% to 45% of the total no. of rooms. The PC hotel
has total 200 rooms. 3 years back, the average room occupancy rate used to be 75% to 80%.
 Every successive government increases the taxes. PC hotel has to pay large amount of; Property
taxes, Sales taxes and Excise duty. Every 2, 3 years the government reinforces the “Marriage
Ordinance Act” according to which only one dish menu will be allowed in the hotel. Not only
taxes, the governments also increase the electricity, gas and water rates.
 The political conditions were much better before 1999. the inflation rate was less, therefore
people had enough money to be spend on hotel visits. But in the era of president Musharraf,
Pakistan noticed a high rate of inflation which tightened the hand of people

 ECONOMIC CONDITIONS:

 PC hotel was in its boom before September 11 attacks. After the 9/11 attacks the situation
changed. War on terrorism was fought in Afghanistan and Iraq. And Pakistan was declared a
“dangerous country”. Not only PC but all the other hotels in Pakistan were affected by the 9/11
attacks. The Pc hotel’s boom period ended. But there was no such major downfall. Things were
favorable. But after 2005 PC hotel entered in its Recession stage. And till now it is in Recession.
For two months PC was in Depression stage also. This stage was when the Marriott attack
happened.

 Pearl continental hotel, is the most preferred hotel chain to visit by its customer, but due to
economic upheaval in the country and effect of international environment on tourism and hotel
industry, PC could not retain its growth momentum as required. Though the Company was able
to achieve sales and services of Rs.1.932 billion for the current year, which was almost equal to
what they had achieved during the last year; change in sales mix gave rise to increase in cost of
sales and the administrative cost as compared to last year. As a result, the profit after tax
declined to Rs.32.889 million for the year as compared to Rs.84.891 million last years. The
rooms sales during the year, did not maintain the desired growth momentum. Pearl Continental
Hotels of Lahore, Rawalpindi and Peshawar have won an exclusive contract for the lodging of
cabin and cockpit crew of the national carrier, Pakistan International Airlines (PIA). This success
contributed towards increase in overall room occupancy to 58% as compared to 54% during the
corresponding period last year. However, due to decline in average room rate, the room
revenue stood at Rs. 831 million as against Rs.890 million in the corresponding period last year,
which is a decrease of Rs. 59 million. In order to get more business and maximize profit, Pearl
 Continental executed a Marketing & Reservation Agreement with M.H.R. Collection Limited
(Motels, Hotels and Resorts). As per agreement, MHR Collection will provide the services
through their network for promoting PC hotels in Pakistan and for making room reservations,
which will positively improve room revenue in the years to come. This revenue generating
business comprised approximately 51% of the total sales revenue of the hotel as compared to
44% last year.

 Pearl Tours & Travels (Private) Limited registered a decline in both Sales and Operating Profit by
Rs.5.8 million (10%) and Rs.6.6 (85.68%) respectively as compared to last year. However, due to
increase in other income and favorable tax decision at appeal levels, Company made after tax
profit of Rs. 1.2 million as compared to last year’s after tax loss of Rs. 3.8 million. During the
year2003, old vehicles were disposed of and new additions to its fleet were made in order to
provide better service to the customers. In order to improve the liquidity of the holding
company to meet other hotels projects, the directors have proposed to dispose off this
company.

 Trans Air Travels (Private) Limited, despite recording a modest decrease in revenue by Rs. 0.433
million as compared to last year, succeeded in reducing its after tax loss to Rs. 3.366 million as
compared to after tax loss of Rs. 4.917 million of last year. This Company is under consideration
of disposal due to continuous accumulation of losses during the last several years.

 During the year, food and beverage revenue increased to Rs. 988 million from Rs. 851 million,
marking an improvement of 16%. The diagram on next page shows the trend analysis for the
sales of food and beverage from year 1998 to 2003.

 Pearl Tours & Travels (Private) Limited registered a decline in both Sales and Operating Profit by
Rs.5.8 million (10%) and Rs.6.6 (85.68%) respectively as compared to last year. However, due to
increase in other income and favorable tax decision at appeal levels, Company made after tax
profit of Rs. 1.2 million as compared to last year’s after tax loss of Rs. 3.8 million. During the
year2003, old vehicles were disposed of and new additions to its fleet were made in order to
provide better service to the customers. In order to improve the liquidity of the holding
company to meet other hotels projects, the directors have proposed to dispose off this
company.

 Trans Air Travels (Private) Limited, despite recording a modest decrease in revenue by Rs. 0.433
million as compared to last year, succeeded in reducing its after tax loss to Rs. 3.366 million as
compared to after tax loss of Rs. 4.917 million of last year. This Company is under consideration
of disposal due to continuous accumulation of losses during the last several years.

 During the year, food and beverage revenue increased to Rs. 988 million from Rs. 851 million,
marking an improvement of 16%. The diagram on next page shows the trend analysis for the
sales of food and beverage from year 1998 to 2003.

 TECHNOLOGY:

 Technology has a tremendous impact on our life styles, our consumption patterns, and our
economic well being. Just think of the effect of technological developments like airplanes,
plastics, televisions, computers, lasers, robots etc. We owe our lives to technology. Just imagine
 the life 200 years back. It would have been very hard. Technology has also played an important
role in progress and prosperity of the PC hotel.
 When the PC hotels were established, Pakistan was not technologically advanced. There used to
be air conditioners and heaters in every room. There was no concept of high security. Just few
watchmen and security guards used to check people and cars entering the hotel. PC hotel had
no credit card machines. No A.T.M machines were there. The conditions of the elevators were
poor. The ovens they had worked on gas. The electricity generators were small which could not
bear high loads. There was no concept of central heating or cooling. The laundry machines were
primitive. Even the buildings of hotel were not as large as of now.
 As time passed, technology became advanced. Each passing year added new equipment,
techniques and procedures. Lets us take a look on the technological advancements in the PC
hotels.
In 2005 the PC hotel purchased a large electricity generator of worth 20 million Rs. This electricity
generator has a high load bearing capacity.
 1990’s the PC hotel installed plants for central air conditioning and heating.
Now big television boxes have been replaced by LCDs.
 The laundry and kitchen are now equipped by latest machinery which stands at par with those
of the Europe and America.
 Security system has been enhanced. Close circuit television systems have been installed in the
hotel to prevent terrorist attacks.
 This year PC has installed a chiller plant that was imported from Germany and costs more than
10 million Rs.
 10 years back, there used to be key locks with keys. This lead to many thefts as anybody can
steal or make a duplicate of the original key. Now these keys are replaced with card locks. Just
pass the card through the lock on the door. The door lock scans the card and the door opens.
 Pearl Continental Tower is a building under construction in Lahore , Pakistan . The project was
proposed by the Pearl Continental hotels and resorts. It is a 6 star hotel situated in the heart of
Lahore, and is expected to be completed in 2010 boasting world-class facilities. The construction
cost is 80 mil US$ (PR 3 bil). The estimated height of the building is 168 m (550 ft.).
 The hotel extension plan will be completed in just 20 months with a cost of $50 million . The 42-
storey building has been planned after the district government decision to relax rules set for the
height of hotel building. The current PC building in Lahore is 33.5 m (110 feet) high while the
new building will be 152 m.

 SOCIAL & CUTURAL FORCES:

Before opening any new Hotel, the PC hotel first looks for a suitable place, city or region. Then they
analyze the environment of that region. What are the social and cultural patterns. Because these socio-
cultural patterns influence the values, traditions, behavior and life styles of the people. The PC hotel
management analyzes the trends, traditions and values of the people of that area in order to know their
needs, wants and desire.

 SOCIAL & CUTURAL FORCES:

Before opening any new Hotel, the PC hotel first looks for a suitable place, city or region. Then they
analyze the environment of that region. What are the social and cultural patterns. Because these socio-
cultural patterns influence the values, traditions, behavior and life styles of the people. The PC hotel
management analyzes the trends, traditions and values of the people of that area in order to know their
needs, wants and desire.