PESTEL Analysis
The briefing is focused towards the analysis of the external environmental factors that affect the business functions of the HOTS hotel and provide essential recommendations. The implications derived from the analysis are subsequently used to propose the strategic vision, mission and goals that could boost the organizations performance in the first year of operations. The HOTS hotel offers a range of services to the customers. HOTS is located at the seafront and can have better demand than any of the other hotels in the area.
The environment of operations of the organization makes it very important that effective strategies are implemented for developing the HOTS hotel. The hotel was opened as a traditional hotel in the latter half of the 20th century. It is at the most 30 minutes away from the airport. Additionally there are bus and other important services that are available close to the hotel.
The hotel industry environment at Bondi beach has experienced significant ups and downs over time. In the 1980s there was a great boost to the tourism of the area. There was great affluence and Bondi Beach became a sought after tourist area. Many events were established that led to the further growth of the hotel industry simultaneously with tourism.
In the 1990’s there was the growth of soft industry and service industry in the area. This further led to the growth of the industry and the town grew to 160, thousand residents. Many important centers were built.
However, in the 2000s there was serious decline of the economy of Bondi beach. This was due to the fact that tourists began to prefer other locations as popular tourist destination (Gray & Gray, 2017). It can be said that there is good prospects for the hotel industry in Bondi beach going forward.
The Hots hotel was established as a hotel offering traditional services in Bondi Beach in the middle of the last century. It has a very convenient location and is less than 30 minutes from the airport. Moreover, there are ample number of available bus transport facilities. The customers of the hotel are mostly between the age groups of 30-50 years. The hotel offers 125 standard sized air conditioned guest rooms. There is 24X7 available front desk services. The hotel also has a complete serviced restaurant, a bar providing snack service and a lobby lounge. The car parking is limited and the hotel has to rely on a multi-storied car park that is nearby. The hotel however does not provide any leisure facilities or business oriented services like conference or meeting rooms. The company is refurbishing guest rooms, front desk, restaurant and bar.
Bargaining power of Suppliers
PESTEL
The PESTEL analysis is being utilized to provide the political, economic, social, technological, environmental and legal aspects that can affect the hotel.
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Political |
· The political environment can be said to be favorable for Hots business. The local authorities had provided lower tax rates to the new small and medium sized businesses that establish themselves in the area. · Moreover, the government is using the tax money to effectively re-establish the seafront facilities. |
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Economic |
· The town had an economic boom in the 1980s however it declined in the 1990s. However, the lower taxes have made it a favorable place for doing business. · The town has a significant population and the economic factor that can affect the organization is between low to moderate. |
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Social |
· There is growing interest among the people for visiting the tourist destination. When the various quarters of the year are considered there is influx of more people seeking leisure in the 1st and 4th quarter of the year. · There is also a significant number of business guests throughout the year. The effect of social is between high to moderate. |
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Technological |
· The availability of technology is good and this can greatly benefit the operations of the hotel. · The most important technology requirements are for digitizing the customer management systems. |
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Environmental |
· The company is focusing on the usage of environment friendly technology for its major business oriented functions. · The environment of the coastal area is good and no significant issues have been reported in regards to the same (Punitha, Aziz & Rahman, 2016). |
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Legal |
· The Hotel wants to be legally recognized as a star hotel. · Hence, it is important that the legal aspects of business such as food standards and service standards are properly followed. |
- In conclusion, it is observed that that political, economic and social conditions of the Bondi beach are favorable for the working of the hotel.
- Moreover, there is an interest in the population to visit the hotel because of its technological innovation.
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Bargaining power of Suppliers |
The suppliers in this case are the kitchen equipment suppliers, food and beverage suppliers and other suppliers such as electricity, water, etc. The hotel is located at a more favorable place than others hence suppliers would give more preference to HOTS |
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Bargaining Power of Buyers |
There are many other hotel in the area that are providing similar services. However, the seafront location of the hotel can be a significant positive point for the hotel. The buyer bargaining power remains high to moderate. |
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Threat of New Entrants |
As the government has implemented a plan to impose lesser taxes on the new small and medium size companies that can enter the market, the threat of new entry is high. The new entrants will be facilitated by the better opportunities. |
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Substitute products |
The threat of substitute products or services is low as there are no parallel services to hotel services in the area. Conferences are being increasingly held in the area there can be growth of rent halls in the future (Divisekera and Nguyen, 2018). |
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Competition |
The competition is growing and is a high factor that can affect the profitability of the Hotel. The population is good and there are many hotels currently providing the same services. Hence, it is a significant factor (Salvioni, 2016). |
In conclusion it can be said that there are many external factors to be considered if the hotel wants to grow concerning the present scenario. However, there is also significant scope for improvement of the organization.
Since, the hotel is located in a coastal area with significant influx of tourists, the competing factors are high. This is more because the hotel is a traditional hotel with many other hotels providing the same kind of service (Aithal, 2016). The industry in the past had witnessed tremendous growth. However, there was decline after that which is being positively affected by the revitalization plan. Hence, it is important that the new entrants are considered as serious competition for the organization.
The main vision for the hotel management is to make it the leading hotel in Australia. For this purpose, it is the mission of the managers and the employees of the hotel is to work to their full potential.
The specific goals for the first year should be focused towards improving the value proposition of the hotel to tackle the strong influence of the competitors over the existing market.
Firstly, the rates will primarily be kept low to medium for both the business and the leisure customers. After increasing service offerings some rates will be made premium.
Secondly, Revenue management will be done through the creation of dedicated revenue management teams. Revenue will be generated from the diverse services that will be offered (Vives, Jacob & Payeras, 2018).
Thirdly, the food and beverage choices will include the local produce of the Bondi Beach area. Seafood would be made a specialty.
Fourthly, the staffing will be done from the nearby areas as this will ensure cultural proximity.
Fifthly, more importance should be provided toward giving proper training to the new employees. Training functions would incorporate the need for better trained employees with regards to the new services provided.
The new infrastructures like the conference rooms and the business rooms would be created to incorporate the business classes (Nieves, J., & Segarra-Ciprés, 2015).
The environmental management would be done through usage of green technology. There will be focus on using renewable energy sources.
The CSR policies of the hotel should target the environmental aspects that are affecting Boindi beach, hence it is important that the hotel authorities take essential measures like awareness programs or activities focused towards the same (Otache & Mahmood, 2015).
Bargaining Power of Buyers
Being a private organization, there is often a tendency to exploit the resources of the Earth without thinking about the consequences to the society (Lashley, 2016). Thus, there is a need on the part of the hotel staff and its managers to ensure that it maintains the ethics of transparency in its financial activities.
Conclusion
In conclusion, the Hots hotel has to use its location at the Bondi beach to its optimal potential. It becomes important that the company essentially considers the value that it needs to add to increase productivity and profitability. The organization is well poised to attract a growing number of new customers. The company is in great need to improve its functional abilities.
References
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