One of the inherent problems in running a hotel business is that no matter how good or luxurious a hotel is the fact remains that consumers are not isolated to coming to that particular area. While Dubai is considered to be one of the most well planned cities in the world with extensive infrastructure development it is still just one city in a world where there are quite literally hundreds of metropolitan centers in countries such as the U.S., Germany and China. Businesses are not isolated in one particular area, they scattered throughout the globe with various consumers utilizing hotels as a home away from home.
This statement is based on a PEST analysis regarding economic factors which contribute/hinder people staying at the hotel. It specifically indicates that based on the economic factors of the PEST analysis one of the current economic factors that affects guest rates for the Jumeirah group is connected to the current global economic turmoil that has made consumers more hesitant to utilize the services of the Jumeirah group.
This prolonged recession has actually resulted in a direct slowdown of infrastructure development within Dubai and has cast doubt over the ability of the region to continue to maintain its current level of distinction which is the primary factor behind foreign guests foregoing to stay within the country.
Taking this into consideration it can be seen that one of the main limitations of the Jumeirah group in Dubai is the fact that due to the nature of the hotel business the product, namely the hotel, cannot go to the consumer rather the business has to wait for the consumer to come to it. Based on an Ansoff analysis regarding product diversification and market development it can be seen that overall the Jumeirah group has been noted as using online advertisements and international commercials to attempt to gain a greater consumer base.
Unfortunately such actions have not been as successful with such attempts have only marginally worked due to the current economic problems the region is facing. It is due to this that in terms of Ansoff product diversification one way in which the Jumeirah group has mitigated this problem is to expand beyond its current customer base within the Middle East into countries such as Germany, China and the U.S.
With hotels located in such areas the Jumeirah group is able to sustain a certain degree of competitive advantage as it is able to access consumer groups it was not able to before and as such is also able to raise brand awareness by a certain degree. Based on a SWOT analysis of possible opportunities that the Jumeirah group can pursue their subsequent expansion into foreign markets in this particular manner is indicative of a positive utilization of existing opportunities which should help the company survive the current recession.
Arrangement of Distribution
Currently, the Jumeirah distributes its services across a wide array of different types of hotels, resorts and price schemes. Each hotel and resort, while luxurious, provides differing price schemes and packages that are prearranged to suit a variety of different budgets. This makes it easier for consumers to pick particular packages in what they believe would be more affordable to them.
Prices, market conditions and organization objectives
After the global financial recession occurred in 2008, hotel guest rates have been abysmally low within the past 3 years with fewer people willing to travel or stay at a hotel due to financial uncertainty. Taking this into consideration the Jumeirah group has actually implemented special discounts available through their online websites where consumers can get up to 20% off for staying at particular hotels and resorts.
While hotel rates still range between 1000 to 5000 dirham and above the fact remains that the discounted hotel rates have actually encouraged an influx of consumers looking to take advantage of the decrease in prices.
Based on an examination utilizing Ansoff which examined the degree of product development within the Jumeirah group hotel division is the fact that while the hotel chain has sufficiently developed a great luxury hotel lineup, it has insufficient affordable hotels within the Dubai and international market. As seen in various economic reports, people have become unwilling to spend on luxury and have begun to concentrate on practicality which makes the Jumeirah Groups current predilection towards high end hotels a liability instead of an asset in this period of economic uncertainty.
Another interesting aspect to take note of is the fact that while prices at the various hotels of the Jumeirah group have gone slightly lower they are still considered rather high when compared to hotels of a lesser caliber. The reason behind this is rather simple, the Jumeirah group prides itself in providing luxury services for its clientele, that is its main objective and as such it is a necessity to charge commensurate prices in order to provide such services.
While such a scheme has worked in the past it has run into major problems in the present due to the current level of economic turmoil in international markets hence the fact the Jumeirah group attempted to continue providing luxury services while encouraging guests to come by slightly lowering prices. It is based on the Ansoff analysis of the current product development scheme currently being utilized by the hotel that it can be seen that the focus of the Jumeirah group on luxury has come back to hurt them in an era where people are searching for practicality and such is indicative of the need to change the hotel chain’s current approach towards getting customers.
Promotional activity and marketing objectives
First and foremost what must be understood is that marketing objectives are considered achieved if the proper consumer segment has been targeted, greater awareness regarding a particular product has been developed all of which results in more consumers patronizing a particular product or service. Taking this into consideration it can be thought of that promotional activity whether in the form of advertisements, discounts or special offerings are a way in which the average consumer gets “excited”. By either advertising or using a discount this creates a certain degree of “hype” for a particular product which increases overall consumer interest resulting in greater sales or patronage.
In the case of the Jumeirah group what occurs is that through their own promotional activities (i.e. TV advertisements, discounts etc.) this causes more consumers to develop interest for their hotels resulting in a higher guest rate. Furthermore, what must be understood is that since the main goal of marketing is to sell a product or service, by using promotional activities the hotel chain is able to meet its marketing objectives which result in higher guest turnouts.
When utilizing an ANSOff analysis in examining the degree of market pen.
3 extended aspects of the marketing mix are process, physical evidence and people all of which are significant to the organization due to the follow reasons. For one thing customer satisfaction is one the most important aspects of any marketing oriented organization especially in the case of the hospitality industry. By instituting proper processes where consumer satisfaction is achieved not only does this result in a better brand image but it creates consumer patronage which is important for any business. In the case of physical evidence, consumers need to know what they are getting out staying at a hotel, whether it comes to a list of services, food is available or even room rates consumers have a predilection to want to be informed before they utilize a particular service.
Taking this into consideration, it can be seen that physical evidence such as distributed brochures or pamphlets are an important aspect of any marketing plan since it creates a physical connection between business and its customers encouraging them to utilize the services of the business that they seem in the brochure. The last and most important as aspect of the extended marketing mix is the people that meet and deal with consumers.
What must be understood is that the staff at any business acts as the first line of defense when it comes to dealing with consumers. Any good or bad behavior exhibited by the staff or even the overall quality of services given reflects back on the business itself. It is based on this that it becomes obvious that in order for any hotel to properly survive it needs an effective, efficient and above all hospitable staff in order to create a good image which will act as its own method of marketing.