Environmental Analysis Of Fragrance Hotel In Singapore For Hospitality Industry

PESTEL analysis

Discuss about the Environmental Analysis of Fragrance Hotel.

Before expanding the entire process of business in market, the organizational executives need to make critical industry analysis and competitive analysis. Based on the external environmental factors business experts have to make suitable strategies and policies for maintaining business sustainability. This very specific study has provided to make detailed overview about environmental analysis of Fragrance Hotel riverside in order to know its threats and opportunities in the hospitality industry. 

Fragrance Hotel riverside has established their business in 20 Hongkong St, Singapore 059663. Endowed with modern styling features with free Wi-Fi and flat screen TV Fragrance Hotel riverside is 7 minutes away from metro station. As per location, this specific hotel is very much convenient for guests. Service providers are very much professional and they are having own dignity and manner while communicating with guests. Fitness rooms and business conference hall is already existed within the campus (fragrancehotel.com 2018). As a result, guests do not have to go outside for fulfilling their personal commitment. A rooftop pool and informal bar has added the beauty of this hotel which attracts the attention of customers more effectively. However, this very specific study has focused to make detailed overview on how the organization should evaluate their external factors for gaining competitors’ market advantage.

An effective PESTEL analysis identifies the political, economic, socio-cultural, technological, environmental and legal factors of a specific location based on which the business process is established (Hsieh 2012). In this very specific study, an effective PESTEL analysis is conducted based on the hospitality environment of Singapore. After evaluating the environmental factors, Fragrance Hotel Riverside would analyze their scopes and opportunities of business in the hospitality industry. In the below table an overview of the PESTEL factors is identified:

Table 1: PESTEL analysis

(Source: Kang et al. 2012)

• Political:

As per the report Political and Economic Risk Consultancy Singapore is considered as lowest politically risk country. Being a democratic country, Singapore government structure is immensely dependent on the public vote (De Grosbois 2012). The government regulations and acts established in this very specific country does not change very frequently. As a result, Fragrance Hotel Riverside does not have to face any kind of difficulties in establishing their business process in the market of Singapore.

• Economic:

Singapore is economically developed country. At the same time, it is undeniable that the country due to labor shortage the labor cost of this country is high. As a result, Fragrance Hotel Riverside has to pay high amount of money in order to pay the employees (Fraj, Matute and Melero 2015). At the same time, it is undeniable that the business experts have targeted high cost premium customers who are flexible enough in affording products and services of Fragrance Hotel Riverside.  

• Socio-cultural:

Political

As already stated Singapore is possessed with the people of different cultural backgrounds, languages and customs (Molina-Azorín et al. 2015). As a result, the business experts of Fragrance Hotel Riverside may have to deal with the customers from different geographical backgrounds and attitudes. Therefore, the employees associated with the organization should have multi-lingual flexibility for interacting with the customers.

• Technological:

Singapore is out an out developed in technology and the inhabitants belonging over here tend to focus on using advanced technology while using services. As a result, Fragrance Hotel Riverside has focused to implement data analytics tool within service process in order to make the entire process of business more systematic and faster (Wang, Chen and Chen 2012). Emergence of technology would also help the customers in gaining the attention of international customers.

• Environmental:

The pollution rate of Singapore is high due to which the government has to implement acts and regulations in order to control environmental factors. Due to high rate of pollution, international visitors tend to show their reluctant attitude in visiting Singapore. This particular factor leaves a negative impact in developing hospitality industry (Ali and Amin 2014). However, in this kind of situation, the business experts of Fragrance Hotel Riverside tends to follow environmental acts and regulations like pollution Control and Drainage Act for rendering an effective control on environmental factors.

• Legal:

It is undeniable that Singapore taxation policy and other acts and regulations are very much suitable for running an entire process of business successfully. For an example, anti-discrimination act, data protection act, health and safety acts are very much important for business experts in maintaining a systematic work flow (Sohrabi et al. 2012). At the same time, with the help of a transparent taxation policy the organization like Fragrance Hotel Riverside does not have to face challenges in maintaining effective rapport with the government. 

Porter’s five forces is the industry analysis tool of making a close evaluation about bargain power of the supplies in comparison with the power of buyers. In addition, the business experts may have to face immense challenges from other competitors belonging to the substitute industry (Hu 2012). As a same time, this very specific framework would critically highlight on how Fragrance Hotel Riverside may have to face immense challenges in gaining their reputation amidst some of the most established competitors.

• Suppliers’ power:

The Suppliers’ power in the soil of Singapore within hospitality industry is low as large numbers of suppliers have already established their business wings. As the power of suppliers is low Fragrance Hotel Riverside has enough scope and opportunity to bargain with the distributors while purchasing products (Tajeddini and Trueman 2012). At the same time, the business experts can save cost by choosing an average cost suppliers.

• Buyer’s power:

Economic

Large numbers of hotels are there who have already established their business process in the market of Singapore. The business experts of those hotels such as Darlene Hotel, Lai Ming Hotel, Parkroyal on Pickering Hotel have already provided tempting offers to the customers which would allure them in using the services (Theodosiou and Katsikea 2012). Therefore, in order to draw the attention of customers Fragrance Hotel Riverside would have to focus in implementing some innovating business offers which would be able to attract the attention of customers from global market.

• Competitors’ rivalry:

As already stated the competitors’ rivalry is very high in the hospitality industry of Singapore. Due to the high level of competition the organization has to focus on making effective marketing strategies and policies so that the business experts can grab customers’ attention from numerous established business enterprises (Assaf, Josiassen and Cvelbar 2012). Darlene Hotel is surrounded with specious rooms and balcony which can easily attract the attention of customers. On the other hand, Parkroyal on Pickering Hotel has implemented those employees within the service process who are very much professional possessed with well manner and behavior. However, in order to survive in high competitive market Fragrance Hotel Riverside would have to focus on both qualities of products as well as services.

• Threat of substitution:

            Apart from hotel industry Singapore is surrounded with numerous renowned resorts and guest houses which are very much affordable for average cost customers. Sofitel Singapore Sentosa Resort, Shangri-La’s Rasa Sentosa Resort are very famous that can easily tempt the customers by giving superior quality of services. The customer service providers are very much professional and available for twenty four hours. The websites and online sites of these resorts are very well designed and colorful (Mensah and Blankson 2013). As a result, it can easily draw the attention of customers. In addition, the customers can easily get an in-depth overview about the brands and services from online websites. However, in order to give an effective competitors’ threat Fragrance Hotel Riverside would have to focus on effectivepromotional activities of their brands in order to grab the attention of international customers.

• Threat of New Entry:

Fragrance Hotel Riverside though not a new entrant in the industry of hospitality the business experts should take effective measures in order to gain competitors’ advantage. As a result, Fragrance Hotel Riverside would have to receive any threat from its competitors.

After evaluating various environmental factors and numerous business scopes and opportunity it has been identified that Fragrance Hotel Riverside should render a modification on their strategic management. This strategic management would help the organization in overcoming numerous threats from the market.  Recommendations are as follows:

• Enhancing more space within campus:

Socio-cultural

It has been observed that Fragrance Hotel Riverside is surrounded with limited space. As a result, people having high income status do not tend to show their interest in using the service of Fragrance Hotel Riverside. As a result, employers are recommended that space can be major threats from its competitors (Pan 2015). The business experts can focus on enhancing the space of this hotel.

• Rendering multi-lingual flexibility in customer service providers:

Customer service providers are not still well accustomed with the multi languages. In this kind of situation, the business experts may have to face immense challenges in fulfilling the needs and desires of the customers belonging to different language backgrounds (Martín-Peña et al. 2014). It can be recommended however that the organization can focus on providing communication training to the employees so that they can deal with the customers effectively.

• Emerging more advanced technology by implementing big data:

Fragrance Hotel Riverside is not following emergence of new technology within their operation process. As a result, business managers have to put additional effort in evaluating the profit and loss of the organization (Pan 2015). At the same time, the people would have to face immense challenges in measuring performance level of the employees without using new technology. Therefore, the organization is recommended to implement big data within their set up so that the operation managers can keep control over their entire process of business throughout the World by sitting at own place.

• Providing effective training and development session to the service providers:

Handling big data within business system is not easy until the employees are receiving proper training on technological skill. As a result, they would be able to overcome any sudden technological barrier as well. This very specific study has focused to make in-depth overview about the importance of training program for enhancing technological skill.

• Implementing effective promotional strategy for gabbing the attention of customers:

On the other hand, it has also been observed that Fragrance Hotel Riverside is not invest sufficient amount of money for maintaining effective promotional method (Theodosiou and Katsikea 2012). In order to render an improvement on business Fragrance Hotel Riverside should enhance their budget for promotional purpose.

Conclusion:

This very specific study has provided detailed analysis about the importance of making an effective market analysis for running the entire process of business in hospitality industry.  As per geographic location, Fragrance Hotel Riverside is very much convenient for guests. Service providers are very much professional and they are having own dignity and manner while communicating with guests. Fitness rooms and business conference hall is already existed within the campus. As a result, guests do not have to go outside for fulfilling their personal commitment. In this very specific study, an effective PESTEL analysis is conducted based on the hospitality environment of Singapore. After evaluating the environmental factors, Fragrance Hotel Riverside would analyze their scopes and opportunities of business in the hospitality industry. In addition, the business experts may have to face immense challenges from other competitors belonging to the substitute industry. As a same time, this very specific framework would critically highlight on how Fragrance Hotel Riverside may have to face immense challenges in gaining their reputation amidst some of the most established competitors. At the end of the study an effective recommendation is provided based the five business management strategies of Fragrance Hotel Riverside.

References:

Ali, F. and Amin, M., 2014. The influence of physical environment on emotions, customer satisfaction and behavioural intentions in Chinese resort hotel industry. Journal for Global Business Advancement, 7(3), pp.249-266.

Assaf, A.G., Josiassen, A. and Cvelbar, L.K., 2012. Does triple bottom line reporting improve hotel performance?. International Journal of Hospitality Management, 31(2), pp.596-600.

De Grosbois, D., 2012. Corporate social responsibility reporting by the global hotel industry: Commitment, initiatives and performance. International Journal of Hospitality Management, 31(3), pp.896-905.

fragrancehotel.com 2018. [online] Available at: https://www.fragrancehotel.com/ [Accessed 12 May 2018].

Fraj, E., Matute, J. and Melero, I., 2015. Environmental strategies and organizational competitiveness in the hotel industry: The role of learning and innovation as determinants of environmental success. Tourism Management, 46, pp.30-42.

Hsieh, Y.C., 2012. Hotel companies’ environmental policies and practices: a content analysis of their web pages. International journal of contemporary hospitality management, 24(1), pp.97-121.

Hu, H.H.S., 2012. The effectiveness of environmental advertising in the hotel industry. Cornell Hospitality Quarterly, 53(2), pp.154-164.

Kang, K.H., Stein, L., Heo, C.Y. and Lee, S., 2012. Consumers’ willingness to pay for green initiatives of the hotel industry. International Journal of Hospitality Management, 31(2), pp.564-572.

Martín-Peña, M.L., Díaz-Garrido, E. and Sánchez-López, J.M., 2014. Analysis of benefits and difficulties associated with firms’ Environmental Management Systems: the case of the Spanish automotive industry. Journal of Cleaner Production, 70, pp.220-230.

Mensah, I. and Blankson, E.J., 2013. Determinants of hotels’ environmental performance: Evidence from the hotel industry in Accra, Ghana. Journal of sustainable tourism, 21(8), pp.1212-1231.

Molina-Azorín, J.F., Tarí, J.J., Pereira-Moliner, J., López-Gamero, M.D. and Pertusa-Ortega, E.M., 2015. The effects of quality and environmental management on competitive advantage: A mixed methods study in the hotel industry. Tourism Management, 50, pp.41-54.

Pan, F.C., 2015. Practical application of importance-performance analysis in determining critical job satisfaction factors of a tourist hotel. Tourism Management, 46, pp.84-91.

Sohrabi, B., Vanani, I.R., Tahmasebipur, K. and Fazli, S., 2012. An exploratory analysis of hotel selection factors: A comprehensive survey of Tehran hotels. International Journal of Hospitality Management, 31(1), pp.96-106.

Tajeddini, K. and Trueman, M., 2012. Managing Swiss Hospitality: How cultural antecedents of innovation and customer-oriented value systems can influence performance in the hotel industry. International Journal of Hospitality Management, 31(4), pp.1119-1129.

Theodosiou, M. and Katsikea, E., 2012. Antecedents and performance of electronic business adoption in the hotel industry. European Journal of Marketing, 46(1/2), pp.258-283.

Wang, C.H., Chen, K.Y. and Chen, S.C., 2012. Total quality management, market orientation and hotel performance: The moderating effects of external environmental factors. International Journal of Hospitality Management, 31(1), pp.119-129.

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