The Parus Hotel is a mid-tier hotel located within the tourist town of Popovka, Ukraine. It is located near the Black sea with easy access to beaches and various water sports-based activities. It is also situated 15 minutes away from the location of the Kazantip music festival which draws in thousands of tourists every year. These combined factors results in the hotel being placed in a potentially lucrative business location. On average the hotel caters mainly to high to middle income individuals with the operational structure being somewhat similar to your average hotel with a front office, kitchen staff, various support services etc.
Marketing Analysis
Introduction
The 2008 financial crisis deeply affected various hotel chains around the world due to the sudden decline in consumer spending and international travel which was the primary source of revenue for various hotels since international guests made up the bulk of their clients. An examination of Popovkas’s hotel industry at the time reveals that while the economy of Popovka suffered a significant financial blow due to its orientation as a resort town its hotel industry did not suffer as significant a loss as compared to its other counterparts around the world.
One of the reasons behind this is connected to the fact that a large percentage of its guest demographic is composed primarily of individuals/families from Russia, Eastern and Western Europe as well as a small percentage of guests from the U.K. Unfortunately the present day European debt crisis has impacted the number of Western European guests, primarily those from Greece, Spain and the U.K. resulting in a considerably lower turnout of guests from such regions as compared to previous years.
Target Markets
The primary target market of Parus Hotel within Popovka is composed of high to moderate spenders from Russia with demographics ranging from 21 to 45. It is usually the case that guests from Russia are couples (i.e. male and female) and usually request either a 1 bedroom or 2 bedroom unit. These particular customers are particular lucrative for the hotel due to their high rates of spending and the general ease of travel between Ukraine and Russia making advanced booking for people from such areas all but guaranteed. The secondary target market for the Parus Hotel are those with high to moderate incomes originating from Eastern and Western Europe.
While it has already been explained that guests from this particular demographic have been considerably reduced there is still a fair share of them that arrive within the region especially during the Kazantip festival. This particular demographic usually consists of groups of individuals and can often result in 2 to 3 people per room (or more in some instances).
Selling Advantages and Disadvantages
Due to its ideal location by the sea and the festival as well as the amount of amenities within the hotel prices at the Parus Hotel usually range between (INSERT PRICE HERE) during the low season and (INSERT PRICE HERE) during the busy season. The unfortunate consequences of having such a price range is that a lot of guests usually opt to stay at some of the cheaper hotels within the area but a constantly steady flow of guests still continue to stay at Parus due to our services (i.e. kite lessons, water sports, excellent food and buffets, pleasant staff, indoor pool etc.) so there are no plans to lower our prices anytime soon.
Marketing Strategies
Establishing partnerships with advertising agencies within Russia
The most successful strategy that has been employed by the Parus Hotel has been to create partnerships with a variety of travel agencies within Russia in order to incorporate the hotel within their packaged tour deals. By doing so this has brought in almost 60% of all guests to our location during the busy and slow seasons and continues to be one of the main ways the hotel is able to get guests.
Sponsoring some of the Events at the Festival
The secondary method by which the hotel is able to promote itself is by sponsoring some of the events at the festival and having the hotel’s name and logo appear on the festival’s own advertisements. By doing so this has created a significant degree of name recognition resulting in more inquiries regarding our amenities and rates.
Sending Promoters to Various Russian Malls
While this technique has resulted in relatively few consumers (roughly 10 percent of guests) it is still a reliable means of bringing in customers especially during the slow season where there are few travelers arriving within the region.
Interviews with Managers
Question: What does the manager see as the most challenging aspect of his or her position?
When asked this question, (Insert Name of Manager Here) surprisingly elaborated on the following story:
“One time, I had once witnessed a manager so sure of his infallible decisions that he refused any and all outside advice from his employees and was content on his own personal belief in his ability to do no wrong. The end result was predictable, his actions led to the ruination of the entire hotel which led to 50 people losing their jobs.
Based on this story alone, it can be seen that the most challenging aspect of his position as a manager to listen to the advice of his employees from time to time since this ensures that problematic decisions can be corrected before they get worse.
Question: What does the manager see as the most critical challenges ahead for his or her particular segment of the mega-profession?
When asked this particular question, (Insert Name of Manager Here), elaborated on the concept of sound business reasoning as an absolute necessity in decision making. For him, good business decisions must be based on sound business reasoning, this means that when a decision is made it must be logical (meaning that it makes sense), results in positive effects for the company (creates profit, reduces costs, etc.) and finally conforms to proper ethical practices (meaning that it isn’t illegal in the least).
Question: What are the frustrations you often deal with in a hotel and how do you resolve them?
When asked this question (Insert Name of Manager Here) stated that the most frustrating thing about managing a hotel is dealing with the employees. (Insert Name of Manager Here) : “What you have to understand is that there are two ways in which you can get an employee to do a certain task, you can either have them do it via your position as their boss or you can have them willingly do it due to the influence you have over them”
As Mr. Amadore explains, at times managers need employees to do certain tasks which are beyond what they normally do at work. In such instances, the likelihood of them refusing to do so is quite high; however, should a manager have a certain degree of influence over that employee in terms of having a good relationship as well as a certain degree of understanding in regards to proper respect for authority the end result is a greater likelihood of that employee being more than willing to help out.
Operations and Administration
- Guest service: Guest service within the hotel consists of a 24 hour front desk as well as a kitchen that is closed only from 1am till 4am.
- Overhead costs: While the property, the buildings and the furnishings within the hotel are owned by the hotel, equipment related to various water sports on the beach are leased from local companies.
- Sanitation: Due to its focus on providing luxury accommodations the hotel utilizes the highest possible standards in sanitation involving industrial strength cleaners and sanitizers.
- Computerization: The hotel primarily uses computers for onsite guest booking and accounting. Unfortunately the business does not have any system for internet based reservations.
- Managing Labor: In the case of the Parus hotel hiring practices are isolated to getting only the best of local talent resulting in considerably higher salaries but in turn this results in great services for our guests.
Financial Management
Revenue Analysis
On average the hotel makes $20 million a month during the low season and $50 million during the busy season.
This is divided into the following profit centers:
- Hotel rooms: $12 million.
- Restaurants/catering: $5 million.
- Recreational facilities: $2 million.
- Retail stores: $1 million.
Budget and Cost Control
Budget and cost control within the hotel are primarily controlled by the accounting and financing department with little interaction between the front of the house and the back of the house in terms of matters related to finances.
Market Value
Based on an estimate of the current services of the hotel as well as the facilities in place the total market value of the Parus hotel can be estimated at around $130 million.
Human Resource Management
Compared to the other hotels within the area the Parus hotel has a relatively high compensation and benefits package as seen here:
There are no part time employees with the hotel though, all of the hotel’s personnel (60 in total) are full time staffers that service the nearly 150 guests that the hotel can accommodate should maximum occupancy be reached. There are no labor unions within the hotel however the management of the hotel does encourage a certain degree of camaraderie among the hotel staff (Abdullah & Antony, 2012). Lastly, due to the focus of the hotel on developing its personnel through monthly training sessions and an encouraging atmosphere there are next to no problems when it comes to labor relations (Abdullah & Antony, 2012).
Personal Assessment
After working at the hotel I have to admit that both my managerial and communication skills have vastly improved since I started here. I am now capable of properly communication my wants and needs to the hotel staff and have developed a distinct form of camaraderie with them wherein through communicating shared goals we now work together in order to achieve them (Dalci & Kosan, 2012). As for my managerial skills I have now developed an acumen related to task delegation, the development of procedures through new situations and circumstances as well as an assortment of other skills that have greatly enhanced my ability to properly take charge of a mid-ranged sized hotel such as the Parus.
One of the principal theories that I learned within the classroom that was displayed during my internship was the theory of consumer behavior. First and foremost it must be noted that the theory as it applies to the lesson in class revolves around the concept of the perceived value or satisfaction that a consumer derives from the consumption/ use of a particular commodity. Based on my experience within the hotel I would have to say that this is both true and false to a certain extent. It is true since I noticed that customers tend to reduce the number of times they avail of a particular service over time since they derive less satisfaction from it.
Yet, I also noted that the theory is false given that the hotel has a log book of repeat customers and it shows that a large percentage of the hotel’s previous guests continue to go back to hotel since they like the services. From my now changed perspective I have to admit that I have come to the realization that events do not conform to the way you want them to be but rather have a habit of happening at the most inconvenient moments (Pereira-Moliner, 2012).
As such, I have developed the notion that it is best to schedule things appropriately, accomplish them as quickly as possible and try to get things done as quickly and as effectively as need be in order to deal with a plethora of possible adverse circumstances (Pereira-Moliner, 2012). When it comes to changes to my career goals I have to admit that there is little in the way of specific changes that have occurred. I still want to work in the hospitality industry and this experience has merely reinforced this desire.
As for specific techniques that I have learned in school that would help me in dealing wither others, I would have to say that learning how to negotiate and be more tactful with those I speak with has been of immeasurable help in developing me as a person that can communicate well with others. Overall, I can say that the only way this internship experience could have been any better is if I could have met a celebrity or two while I was there. This is due to the fact that I could not have asked for a better experience at this stage in my career since through my internship at the Parus hotel I have come to understand what awaits me in the future and I cannot wait to tackle it!
Conclusion
Site’s Short and Long Term Goals
When it comes to the short and long term goals of the Parus Hotel it is interesting to note that due to the current European debt crisis and the general turmoil in the global economic market it has been decided that within the short term the hotel will continue to follow its current plan of providing high quality amenities and services at high cost however in the long term what will happen is a slow and carefully planned diversification of services in order to cater to clients that have medium to low income brackets (Lee et al., 2012).
The reason behind this is quite simple, the current problems within the global economy has created a noticeable impact on hotel guests at the present wherein many have been reluctant to spend as much as they used to (Wang, 2012). If this current trend continues it is likely that Popovka will still continue to receive a steady stream of people however these will consist of individuals/families that would be looking for a bargain instead of luxury. Thus, a transition would be necessary in order to meet the demands of this new consumer market. It was realized within the past year that if such a strategy is not implemented it is very likely that the hotel will see a considerable reduction in the amount of guests that check in.
Intern’s Recommendations
Based on what I have observed from the processes utilized within the hotel I have determined that it has little in the way of an online presence within social media networks and does not even utilize E-commerce platforms in order to create a faster and more prudent method for guests to make reservations and pay for rooms ahead of time (Dyrud, 2011).
It must also be noted that the popularity of social media platforms such as Facebook and Google + makes it a free and easy method for hotels to advertise their services via satisfied liking and sharing the page as well as through various online promotions. It is based on this that I recommend the hotel setup a proper E-commerce application on its future website as well as setup a Facebook page. By doing so this creates the potential for the hotel to access new customer bases in far off locations and make it easier for them to make a reservation and pay for their room without having to spend too much.
Reference List
Abdullah, Z., & Antony, C. (2012). Perception of Employees on Internal Communication of a Leading Five Star Hotel in Malaysia. Asian Social Science, 8(2), 17-26.
Dalci, I., & Kosan, L. (2012). Theory of Constraints Thinking-Process Tools Facilitate Goal Achievement for Hotel Management: A Case Study of Improving Customer Satisfaction. Journal Of Hospitality Marketing & Management, 21(5), 541-568.
Dyrud, M. A. (2011). Social Networking and Business Communication Pedagogy: Plugging Into the Facebook Generation. Business Communication Quarterly, 74(4), 475-478.
Lee, S., Bai, B., & Murphy, K. (2012). The Role Demographics Have on Customer Involvement in Obtaining a Hotel Discount and Implications for Hotel Revenue Management Strategy. Journal Of Hospitality Marketing & Management, 21(5), 569-588.
Pereira-Moliner, J., Claver-Cortés, E., Molina-Azorín, J. F., & José Tarí, J. (2012). Quality management, environmental management and firm performance: direct and mediating effects in the hotel industry. Journal Of Cleaner Production, 3782-92.
Wang, X. (2012). The impact of revenue management on hotel key account relationship development. International Journal Of Contemporary Hospitality Management, 24(3), 358-380.