2. The Hotel market A Sector Review Robert Berrisford Tom Cherry Sally Wetherall Ailsa Gentles

3. zUK hotel market –past five years –current standing zHotel market In 1990’s zFuture of hotel market?

4. zRelevant Analytical tools Boston Matrix Porters 5 Forces PEST SWOT Stakeholder analysis Directional Policy Matrix

5. UK Hotel market

6. Market Overview z60 Public and Private zExpand through acquisitions zGrowing International brands zFranchised brands and budget hotels zMajor investment by big chains

7. UK Hotel market

8. Share of market zGranada (9%) Forte, UK’s largest Hotel chain Posthouse, Travelodge zWhitbread Hotel company (6%) Marriott uk Travel Inn zSix Continents (5%) Holiday Inn Intercontinental

9. Boston Matrix HIGH Granada Group plc 9% share, 3.9% growth Whitbread plc 6.6% share,-0.7% growth LOW Thistle Hotels plc 4.5% share, 0.1% growth Hilton Group 6.0% share,-8.1% growth MARKET SHARE

10. Porters 5 Forces Competitive rivalry: 4 main players Granada Group Whitbread plc Hilton Group Thistle Hotels Potential entrants. Expensive to compete against the main players. Long time needed to establish a respectable name and build up customer loyalty Suppliers Many suppliers for hotels so quality and price are key factors for hotels to consider when purchasing. Supplier power is low in the hotel industry as the hotels are able to pick and choose from a large number of suppliers Buyers Large amount of buyers so price and quality has to be competitive to be attractive Substitutes Many hotels so there can be a lot of product-for-product substitution. Doing without also a form of substitution. Invest in video conferencing saving on air fares and time

11. Changes zIncreased demand for Budget hotels Increased small hotels zMiddle sized (51-199 rooms) Maintained zLarge increase in over 200 rooms Overseas Conference

12. Whitbread PLC

13. Whitbread plc z Y2000 Turnover £3.0 Billion x+ 0.3% on 1999 zprofit £256 Million x- 15% zBought Swallow £578 Million

14. Granada

15. z1999 turnover £4.3 Billion +6% on 1998 zProfit £881 million +14% on 1998 zLargest branded chain Under Forte Le Meridien, Posthouse, travelodge and Heritage. zInterests In UK TV among others zHotels + Restaurants 2/3 of revenue

16. PEST Analysis for hotels zPolitical/Legal Monopolies Employment law zEconomic Factors Life cyclesRecessionDisposable income zSociocultural Factors Lifestyle changesPopulation demographicsAttitudes zTechnological New developmentsRates of obsolescence

17. Stakeholder analysis

18. Directional policy matrix StrongAverageWeak

19. Strengths zThe current UK market size is worth £10.3 billion. zHuge growth in large hotels doubling in Value between 1996 and 2000 (now worth £289.2 million) zSmall hotels with less than 50 rooms form 92% of the market in terms of value.

20. Weaknesses zFuture market uncertain after the events of September the 11 th. zBusiness restricting travel expenses to cut costs zTechnology advances in video conferencing

21. Opportunities zPopulation uncertainty about air travel encourages more UK holiday makers to holiday internally. zIncreasing demand for budget style hotels. zIncreasing demand for short break offers.

22. Threats zNumbers of foreign visitors have fallen dramatically causing severe financial worries particularly for London business orientated hotels. zUncertain future zGlobal economic slowdown will hit hospitality hardest. zBusiness travelers all but disappeared.

23. Forecast zForecast to grow by 16% to £12 Billion by 2005 zEconomic slowdown little conferencing more short breaks zReduced International Travel affect large hotels

24. 1996-2000 V 2000-2004

25. Competitive Strategies In 90’s zFrequent Flier Programs zCost containment, price discounting, niche marketing zrevenue maximization zdatabases for customer tracking

26. Future of UK Hotel Industry zEconomic slowdown large hotels conferencing zDecreased air travel Large hotels zFoot and Mouth Small rural hotels

27. Really That Peachy?

28. Future of UK Hotel Industry zEnd Of hotel Industry? zConsolidate for next three years zSpecialized conferencing zNot a good time to enter market