Strategic Management case study in the Hotel industry

Essay by pesto72University, Bachelor'sC+, February 2006

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Having experienced the SARS, July 7th, 2005 terrorist attack, and the Bird Flu, which have slowed down the UK economy and had an adverse effect on the hotel industry, there are now clear signs of recovery. This report will first examine the UK hotel market, discuss the major industry players and demonstrate the relative importance of key issues. Furthermore, it will explore the UK consumer trends, present the diversity of backgrounds of investors and provide a future outlook along with a forecast which has been developed to illustrate the industry and the factors affecting its development and future. In conclusion, it will comment on short-term and long-term investment as well as recommending an outcome for the investor.

The UK Hotel Sector

The current position

A hotel, according to the EU, is defined as 'a collective accommodation establishment, typified as being arranged in rooms exceeding a nationally specified minimum and as providing common services, including room service'.

Generally, the UK definition is made according to the holding of a licence to sell liquor. (Lawson, 1998)

According to the latest preliminary figures from the HotelBenchmark Survey by Deloitte, the UK hotel industry has proven to be the strongest performer in Europe in the first six months of 2004, with revenue per available room (revPAR) rising 11 percent against the same period in 2003, resulting from a balanced mix of rising occupancies and average room rates. London, which is the leading performer in the UK, experienced a 6% increase in average room rate year on year.

The key players

The UK hotel industry is made up of several key players, including:

* Boutique Hotels

* Mid-range Hotels

* Budget Hotels

* Bed and Breakfast

"Boutique Hotel" differentiates itself from larger chain or branded hotels by providing an exceptional and personalized level...