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SHM608 Strategic Hotel Management

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SHM608 Strategic Hotel Management

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Course Code: SHM608
University: The Pennsylvania State University

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Country: United States

a. Understand and apply analytical tools for strategy formulation appropriate to a hotelb. Prepare, apply and monitor a strategic business plan for a hotelc. Generate, implement and justify business and marketing strategies suitable for new or continuing hotelsd. Evaluate and justify resources, capabilities, competencies and competitive advantage for new or continuing hotelse. Analyse the managerial tasks associated with developing and executing organisational strategiesf. Work effectively in teams and participate in strategic management decision-making concerning the operations of a hotel

Hotel waves caters to the entertainment needs of the customers. It provides quality services to the customers, when they go for a change from their daily routine. Typical examples of the services includes efficient transportation facilities and shopping centres among others.  As a matter of specification, Hotel Waves provides quality accommodation facilities with modern amenities. One of the mentionable facts is the renovation programs, which upgrades the standards and quality of the services (Evans, 2015). As per the demands, the demand for weekend standard room was the highest (33%). However, due to the lack of proper maintenance, the demand declined to 24%. This assignment attempts to establish a report on strategic management of Waves Hotel located in the Bondi Beach.
Environmental analysis
Environmental analysis of a company or organization denotes its internal and external environment. For the internal environment analysis, SWOT analysis of the Bondi Beach would be conducted. In case of the external analysis, PESTLE analysis of the Beach would be performed. Porter’s Five Forces prove effective in providing an understanding towards the external influences affecting the business of the Waves hotel.
SWOT analysis
125 standards roomsare well furnished, which lures all kinds of customers. 24 hours customer care services put emphasis on the complaints of the customers regarding the services. There is a lobby lounge and bar, which acts as a relaxation area for the visitors. The staffs of this segment serve full time for satisfying the needs of the clients and the customers (Padilla & Garrido, 2014).
Negligence towards maintaining the guest roomsdegrades the brand image of Hotel Waves. Average condition of the front desk would act as repulsion for the tourists intend to avail booking. Delay in planning the renovations has resulted in customer and employee turnover. Insufficient parking facilities is one of the other weaknesses of the hotel. Under such situation, it can be argued that the parking facilities for the expensive cars in the nearby complex aggravate the complexities of the visitors in terms of their buying power (Pavlatos, 2015).
Efficient and effective transportation facilities would lure the clients and the customers towards the hotel. Location wise, this would be an advantage. Tie ups with the nearby shopping centres would enable the hotel staffs to introduce lucrative schemes, discounts and offers for the customers.Increasing corporate events would act as an agent in terms of luring the customers from different socio-cultural background. This would enhance the parameter of cultural diversity. Tie ups with the local businesses and regional heads would act as a sponsorship for the Hotel, stabilizing the financial parameter. However, there would be a test after the training session that is able to guide the managers to make estimates regarding the ability of the staffs towards making real life application to nourish the skills in workplace (Pereira et al., 2016).
Inadequate facilities in rooms and services decline the number of tourists. As a matter of fact, these continuous practices would degrade the reputation of the hotel, adding vulnerability in the market position. Incapability to handle harsh and strict tax tariffs would result in degradation of the hard earned reputation (Abrate & Viglia, 2016).
External environment
PESTLE analysis




· Tax tariffson the import and export activities.
· Lack of flexible government policies


· Intense fluctuation in the market
· High exchange rates
· Price hike in the raw materials.


· Change in the behaviour and demand of the customers.


· Digital Applications for advance payments of bookings.
· Payment security.


· Consumer Protection Act, Environment Protection Act


· Environmental directives
· Solid waste management

Table: PESTLE analysis of Bondi Beach
The punitive and harsh policies taken by the government can be identified as detrimental factor for the growth of the hotels and their employees. In fact, due to these regulations the hotels are bound to move as per the demands and requirements of the customers. Furthermore, high inflation rate is an obstacle in the process of balancing the financial condition (Padilla& Garrido, 2014). In fact, it can be advocated that the hike in the exchange rate delivers a decline in the relationship between two countries and at the same time imposing difficulties in order to fulfil the demands of the customers. Herein mention can be made of the loss, which the Hotel encountered due to the inadequate resources for handling the infrastructural tax tariffs. In this situation, sponsorships would be an effective solution for the restoring the lost balance in the financial parameter. This would restore the lost stability in relationship with the shareholders and stakeholders (Molina et al., 2015).
Technological innovation aligns with the specific needs and preferences of the clients and the customers. Here, mention can be made of the Wi-Fi, which assists the businesspersons in carrying out the tasks in an efficient and effective manner. Along with this, access to the Wi-Fi is important in terms of maintaining the customer relationships.Exposure of conscious attitude towards securing the private information of the customers assures the customers of availing the services (Pavlatos, 2015). This is applicable in the time of booking, where the hotel staffs need to assure that the customers have the access to these payment options. Herein lays the effectiveness of the IT legislations, which possesses flexibility towards averting the instances of malfunctions, virus attacks and hacker interventions. Complying to the standards and protocols of the Consumer Protection Act would prove beneficial in terms of protecting the personal data of the clients and the customers. Compliance with the terms and conditions of Data Protection Act (1998) is assistance towards safeguarding the private information of the clients and the customers (Turner et al., 2017).
The technique of solid waste management is fruitful in terms of maintaining the hygiene around the hotel. This process involves segregation of the wastes, which helps in detecting the wastes, which can be recycled. This helps in achieving the sustainable development (Pereira et al., 2016).
Porter’s Five Forces
It can be argued that the framework of the Porter’s five forces is an effective tool to analyse the external influences related to the beach.
Bargaining power of the suppliers
Qualified labours are dedicated to enhance the skills and efficiency for an organisation. Herein lays the effectiveness of the better management techniques like tracking the employee performance and recording them for making estimates about the progress. If they are entrusted with the responsibility of interacting with the suppliers, their capability can be assessed. Incapability in this aspect would result in negative outcomes. Therefore, it can be argued that the suppliers enjoy high power in case of the buying behaviour (Rahimi, 2017). This tends to improve the stability between the relationship between the hotel staffs and the associate partners.
Bargaining power of the buyers
The provision of quality services to the customers respects their buying behaviour. This generates interest in the minds of the buyers to avail the services of the brand. In this regard, it can be stated that quality and neat and clean environment are very essential that the hotel companies must implement in their operational framework. In fact, modern amenities coupled with the service quality have a deep influence on the purchasing behaviour of the tourists. Therefore, it is imperative for every hotel organisations to put more emphasis on the feedbacks given by the tourists. As a result of that it is able to provide quality and standards in the services. In addition to this, updated the service with the changing customer demand is also an important aspect that is related to the technological awareness of the customers (Stylos & Vassiliadis, 2015).
Threats of new entrants
The role of the shifting preferences of the customers is deeply related to the business activities of the hotel business sectors. Therefore, the hotel industries strictly follow the practice of change their operations with the need of the customers. For an example, small and medium private motels such as Central Private Hotels, Highfield Private Hotel and George Street Hotel are tried to attract the customers on the basis of their substitute products. On the contrary, the Waves Hotel is suffering with high rate of employee turnover due to the inability to meet customer satisfaction. In fact, providing better customer service facility with the quality accommodation services can be an effective strategic measure that helps the private hotel companies to sustain in the high competitive market (Ryan, 2015). As a result of that it facilitates a high competitive advantage to the private hotel companies to put an impact on the competitive environment of the hotel market. Evaluation needs to be conducted for assessing the effectiveness, appropriateness and feasibility of the services. Here, requirements of the clients and the customers gained prime importance.
Barriers to entry
Government regulations like trade tariffs might act as an obstacle in the business of the Waves Hotel. Along with this, high capital costs, lack of access to the distribution channels, complexities in the acquiring the key raw materials can hamper the business expansion of the hotel. Luxurious rooms at cheaper rates and lip smacking delicacies within the budget would provide the opportunity to the small motels and hotel to firmly establish their position in the market. This scenario would hamper the expansion process for Hotel Waves (Ren et al., 2016). The barriers to entry in this case are high, as contemporary brands possess enough resources for to develop a better facility and quality service to fulfil the demands and requirements of the customers. Waves hotel has 125 rooms, however, the maintenance is poor.
Competitive rivalry
There are several determinants in hotel and hospitality industry that play a pivotal role in facilitating an environment of intense competitiveness. Generally, the competition is restricted between the hotels in one side and the restaurants, casinos and clubd on the other. As far as the restaurants in Sydney are concerned, they enjoy a high status by providing fusion and sea foods and as a result of that generate a negative reputation of the hotels. Therefore, it is important for the hotels to implement some new measures for retaining the business operations. For an instance, free passes to the sport events in the beaches with quality accommodation and package facilities for the customers are identified as effective measures (Ryan, 2015). In addition to this, implementation of market analysis is considered to be an effective measure to get the insight of the latest trends. Consideration of the annual reports would assist the hotel staffs in acquiring financial information.
Adhering to the terms and conditions of competitive policies is fruitful for the Waves Hotel staffs in terms of maintaining transparency in the business. This transparency is vital in terms of gaining trust, loyalty and dependence of the clients and customers. Herein lays the appropriateness of Ethical Code of Conduct, which helps in preserving the workplace culture. It can be argued that the abilities of the hotels and restaurants are strong enough to attract maximum number of customers. The product quality and better service facilities are important in this regard (Padilla & Garrido, 2014).
One year strategic plan

To increase potential for corporate business in the second quarter
To introduce tourism packages at the time of autumn break
To recruit new members in the management team
To organize meetings for revising the current policies, programs and strategies

Key performance indicators

Successive evaluation of the business operations
Bulk of tourists come in  autumns
Teamwork by the management team
Positive feedbacks from the clients regarding the services


Advertisements through social media
External sources



Amount (Australian dollar)





Salary, wage and employee benefits


Room service and maintenance




Miscellaneous (events)


Operation supplies



88000 AU$

Table: Budget expenses for Waves Hotel for the next one year
Bondi Beach is a popular heritage site in the threshold of Sydney, Australia. The hotels situated near the beach suffice the entertainment needs of the tourists. The assignment deals with one such hotel, Waves, undergoing poor condition of the guest rooms and front desks. Herein lays the effectiveness of the one year strategic plan, which possesses the flexibility to upgrade the standards and quality of the services. Current strategic analysis through SWOT, PESTLE and Porter’s Five Forces are the sources for preparing the strategic plan. 
Abrate, G., & Viglia, G. (2016). Strategic and tactical price decisions in hotel revenue management. Tourism Management, 55, 123-132.
Evans, N. (2015). Strategic management for tourism, hospitality and events. Routledge.
Molina-Azorín, J. F., Tarí, J. J., Pereira-Moliner, J., López-Gamero, M. D., & 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, 41-54.
Padilla-Meléndez, A., & Garrido-Moreno, A. (2014). Customer relationship management in hotels: examining critical success factors. Current Issues in Tourism, 17(5), 387-396.
Pavlatos, O. (2015). An empirical investigation of strategic management accounting in hotels. International Journal of Contemporary Hospitality Management, 27(5), 756-767.
Pereira-Moliner, J., Pertusa-Ortega, E. M., Tarí, J. J., López-Gamero, M. D., & Molina-Azorín, J. F. (2016). Organizational design, quality management and competitive advantage in hotels. International Journal of Contemporary Hospitality Management, 28(4), 762-784.
Rahimi, R. (2017). Customer relationship management (people, process and technology) and organisational culture in hotels: Which traits matter?. International Journal of Contemporary Hospitality Management, 29(5), 1380-1402.
Rahimi, R., & Kozak, M. (2017). Impact of customer relationship management on customer satisfaction: The case of a budget hotel chain. Journal of Travel & Tourism Marketing, 34(1), 40-51.
Ren, L., Qiu, H., Wang, P., & Lin, P. M. (2016). Exploring customer experience with budget hotels: Dimensionality and satisfaction. International Journal of Hospitality Management, 52, 13-23.
Ryan, C. (2015). Trends in hospitality management research: a personal reflection. International Journal of Contemporary Hospitality Management, 27(3), 340-361.
Stylos, N., & Vassiliadis, C. (2015). Differences in sustainable management between four-and five-star hotels regarding the perceptions of three-pillar sustainability. Journal of Hospitality Marketing & Management, 24(8), 791-825.
Turner, M. J., Way, S. A., Hodari, D., & Witteman, W. (2017). Hotel property performance: The role of strategic management accounting. International Journal of Hospitality Management, 63, 33-43.

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