Hotel industry in Dominica

TMA

You are acting as a marketing consultant for a recently opened upmarket boutique style hotel in your city. The family that owns the hotel has considerable hospitality experience having worked for large hotel companies such as Hilton and Hyatt. However, they have little knowledge of actual marketing techniques and have thus commissioned you to develop a marketing plan to guide them in their future marketing activities.

Your task is to write the marketing plan within 2000 words. Any assumptions made should be clearly stated at the outset. Make sure you provide a rationale for your decisions drawing on relevant marketing theories and concepts. Please note it is advisable to include sources throughout your marketing plan to add credibility to your argument.

In this essay I will imagine myself working as a Marketing consultant for a recently opened upmarket boutique style hotel in the Caribbean island of Dominica. My goal is to develop a marketing plan which will guide the management in future marketing activities and enable owners to achieve target results despite market conditions.

Marketing of a small boutique style hotel is a challenge as it requires a certain finesse and accountability due to the restrictions of size and budgets. The marketing plan has to be developed and executed with precision accuracy to reach the potential guest with a true appreciation of a boutique hotel and the ability to pay a premium price for this level of service and intimacy.

1. Executive summary

The family-run Hotel X was opened in the capital Roseau just one month ago and have been facing just 10% of its occupancy. The owners had acquired an old building with a beautiful garden in the historical part of Roseau and partially reconstructed it, but saved architecture style of the place. The hotel has 25 rooms, 3 suites, 2 meeting rooms and a modern business center with computers, fax/copiers equipment. There are complimentary high-speed Wi-Fi Internet and cable TV in each room. The hotel's restaurant and bar are opened to the general public.

The hotel is targeting business travelers with a two to five nights stay requirement. Target segments include government officials, diplomatic officials and corporate executives from the Caribbean market as well as international market.

The provision of personalized accommodation and services along with the extensive range of comprehensive business facilities differentiate Hotel X from other hotels in Roseau.

2. Industry and market analysis

The hotel industry in Dominica is not highly developed due to the fact that the island does not have direct flights from Europe and USA because the length of the airport's runway is limited by mountains. The most of tourists visiting the island arrive on cruise ships during the season November-April and do not overnight here. The guests who choose Dominica for their vacation usually prefer to stay in small hotels and cottages in the jungle close to the nature - the main treasure of Dominica.

The factors affecting the hotel industry in Dominica are:

1. Poor air transportation from USA and Europe

2. Decline in the overall number of visiting guests due to economic downturn

3. Lack of international hotel chains

The hotels in capital Roseau mostly attract business travelers. There are several types of accommodation being offered for the guests: 2 medium-size hotels on the bay front, 2 boutique-style hotels in downtown and several quest houses. Local boutique-style hotels are called like that mostly because of their size and not the quality of service and accommodation. They are specially designed for business travelers and benefit from central location in the city close to government and commercial buildings.

3. Situation analysis: SWOT

Strengths

* Owners' experience in hospitality

* The most modern telecommunication systems have been installed in the rooms and meeting facilities

* Downtown location: less level of humidity comparing to the bay front, as a result longer life of electrical equipment and furniture

* New building: savings in maintenance cost per year

* Historical sense in the place

* Very low threat of entry due to significant capital investments

Weaknesses

* No client database as the hotel is new

* No awareness by the public as well as lack of reputation on the local market

* New staff without efficient knowledge of hospitality

* No established relationships with online booking systems: Expedia, Hotels, Travelocity etc.

* Benchmarking performance is difficult in the market due to the lack of direct competitors

Opportunities

* No direct competitors presently exist in “boutique business” niche, therefore ability to offer a highly personalized service

* Establishment of differentiation strategy by offering added value to the guests

* Conference facilities can be rented for a day-use to a local business community

* Opportunity to become a hot nightlife spot for a local community by developing F&B outlets

Threats

* Depressed commercial activity in the region, therefore decline in the number of business travelers

* Growing popularity of “distance” meetings in the corporate world: companies prefer to conduct meetings via web-conference and the less people travel

* Hurricane threats

4. Marketing objectives

The overall goal of Hotel X marketing program is to create enhanced public awareness through a comprehensive marketing campaign that will result in increased visitation.

Hotel B marketing program has the following objectives:

1. To increase occupancy rate up to 70% within next 12 months

2. To establish corporate contracts with local government and different businesses in the Caribbean region

3. To create a database of repeating quests and increase their loyalty in a competitive market

4. Within 2 years to be considered by the local community as a significant part of the regional business industry and a supporter of the community activities by being nominated in the Caribbean region hotel awards.

The primary financial objectives will be profits, return on investment (ROI) and cash flow.

5. STP: Segmentation, Targeting, Positioning.

Hotel X market segments are: government officials, diplomatic officials, corporate executives from local Caribbean market as well as international market. The clients are 30-65 years old, mostly men, with middle to high level of income.

The hotel is positioned as a 5 star business traveler's hotel, strategically located in the heart of the capital and offering a highly personalized service. Hotel provides a unique quality experience where all guests are valued, respected and their business is truly appreciated.

Target market can be divided into 2 groups:

1. Business travelers from the Caribbean region

2. International business travelers

6. Marketing Strategy. Planning marketing tactics.

The main aspect of Hotel X marketing strategy is to create public awareness and reputation on the local Caribbean market. Differentiation strategy will focus quests' attention on the high level of personalized service, best business facilities in Roseau and luxurious environment. Marketing mix is made of product, price, place, promotion, (known as the four P's) with addition of people, processes and physical evidence for marketing of services (known as the seven P's). All marketing communications should be integrated in order to achieve success of the marketing campaign.

Product: Hotel X will provide customers with finest experience by blending superior accommodation with highly personalized service. Part of the strategy is to help the guests with planning their leisure activities and discovering the beauty of Dominica island. This will be achieved by the development of strong relationships with local travel agencies.

Price: In order to position the hotel as upscale the room rates are set up about 15% higher than in competitors' hotels in Roseau. Pricing scheme is based on a room rate per night including CP (gourmet continental breakfast). Usual seasonality in the Caribbean region will not affect room prices at Hotel X and the rates will be constant during the year. Special discounted rates will be offered for business travelers from Caribbean region, corporate group rates starting from 3 rooms will also be available. The prices for meeting rooms are set up on hourly-basis including tea and coffee breaks. Hotel X pricing strategy is selling of the experience, not the room.

Place (distribution): All services will be rendered in the hotel. Delivery channels include the hotel web-site, travel agents and international booking systems.

Promotion:

* Web: The boost of technology in the past ten years, coupled with the proliferation of home computers, has changed the way many people buy travel, services, and products as well as conduct research. For a boutique style hotel with limited marketing resources an effective web-site will create and strengthen its presence in the local, domestic, and international markets. The hotel website is designed to answer all of the key questions which visitors would have about the rates, services, location, island attractions, etc. The web-site is easy in navigation, have a lot of pictures made by professional photographer and a virtual tour on the premises. The clients can book and pay for accommodation online and leave comments in the guestbook. A confirmation email and personalized thank you note will be sent to everyone who makes an online reservation Printable brochure is available for download.

Organizations that blog get 97% more inbound links to their website, and 55% more website visitors according to Hubspot research. The pages on Facebook and Twitter will be created as these places have a big potential for marketing activities: for example polls can be posted where people can vote for the top activities of a business hotel. By this way the clients will be involved in creation of new products and perfection of existing ones. Facebook marketing is all about “transitive trust” - reaching people through people. Live-chat support during working hours will be conducted by Sales manager.

* Search engine optimization: SEO services will be outsourced to professionals. They will help to get Hotel X listed on the main boutique hotels search engines like www.e-escape.com, www.prefferedboutique.com, www.boutiquehotelsandresorts.com, and others as well as on the main travel booking systems Expedia.com, Hotels.com, Travelocity.com and Orbitz.com. Getting listed on WikiTravel and TripAdvisor is also essential. SEO should be done on a regular basis as refreshment of web site positioning with the search engines is absolutely necessary.

In order to maximize discoverability of its web-site Hotel X will arrange a link exchange with the key web-sites about Dominica:

http://dominica.dm

http://www.avirtualdominica.com

http://www.visit-dominica.com

* Advertizing: The most of business travelers visiting the island use LIAT Caribbean airline, the biggest air carrier in the region. Hotel X will place 4 ads at Zing - the onboard magazine of LIAT airlines, being issued 4 times a year, and also at Zing web-site.

Another ad will be placed at the island's airport in the baggage claim area. Despite the fact that all visitors usually book the place to stay before their arrival, they might be interested to know about new hotel specially designed for business travelers.

* Public relations: Extensive public relations are important to obtain positive media coverage. Hotel X will order a TV story about its opening and personalized service on Caribbean news channel. The hotel will actively participate in local functions and support the regional initiatives around the promotion of tourism in the region.

· Branding: The creation of a brand requires a long-term focus, so we assume that brand-building activities will not have an immediate pay-off. Hotel X brand will be built using a unique positioning concept: the first boutique-style hotel for business travelers in Dominica. By focusing on building brand values, Hotel X will build barriers to competitive attack and achieve community and governmental support.

* Direct marketing: All guests of Hotel X will be asked to provide their business name and then a corporate package will be sent to the companies, letting them know about corporate pricing and business facilities. This will help in establishing of corporate contracts.

* Online marketing and sales promotions: Nowadays Internet is seen as a critical tool to reach customers. 30 packages of “two nights for the cost of one” deals will be offered in the first 6 months if booking will be done on the hotel's web-site.

People: As the owners have a lot of experience working for famous hotel chains, they will be able to train employees how to present an ultimate level of service to the customers. The employees will always provide a first name personalized service; all customers' preferences will be kept in electronic database. Customer Relationship Management (CRM) program will be run to collect the maximum information about the guest: the more details staff knows, the higher level of service they can provide. Collecting guest feedback will be set up as a top priority for employees. Reception staff at Hotel X is multilingual: room clerks speak English, French and Spanish.

Process: Consistency is crucial for building loyalty, and there is nothing worse than letting a customer down after they have a good experience. Operating procedures will be developed in the form of staff's guide books. Employees training will be held each 3 months to ensure that they provide consistent level of service.

Physical evidence: The appearance of employees and premises can highly affect customers' impression about the hotel. Differentiated strategy will apply to almost everything in the hotel environment: style of the rooms, bathroom amenities, house music, etc.

7. Budgets + Sales forecasts

Expense budget plan will be prepared with strict deadlines for implementation of marketing activities and the persons responsible. Marketing expenses are projected to be about 10% from estimated annual sales revenue. Room forecast is based on an average growth monthly rate of 5%.

8. Tracking and Evaluation

Tracking helps monitor the effectiveness of each marketing activity and is especially helpful with overall program evaluation. It also assists in reporting Return on Investment (ROI) to shareholders. Methods for evaluation of marketing efforts are different for each type of marketing activities.

The guests will be asked to fill outa customer questionnaire upon check-out. The form consists of 10 questions which the customer can complete while waiting at check-out. This will help in assessment of the level of satisfaction by different hotel services (friendliness of staff, cleanliness of the room, quality of the food etc.) The question how the guest found the hotel will also be included.

For monitoring the effectiveness of magazine ads and other media sources different promo-codes will be included to all ads posted. In order to assess PR efforts the management will track the number of social media mentions and the percent of satisfaction. Leads, testimonials, and referrals will be tracked through the CRM system. These will be entered automatically as the leads come over the Web and manually by sales manager dealing with them otherwise.

The majority of travelers today use Internet to make travel plans, and the reviews they read from other guests influence their buying decision. The most important thing a hotel can do to improve rankings is provide a great experience for their guests.

Re-evaluation of the marketing plan will be done every year in order to bring fresh ideas to the marketing strategy and account for changes in the market.

References:

Doyle P., Stern P. Marketing Management and Strategy.

Carol Verret / August 2002, The Challenge of Marketing Independent Boutique Hotels. http://www.hotel-online.com/Trends/CarolVerret/MarketingBoutique_Aug2002.html

3. Brenda Fields, May 2003, Boutique Hotels: How to Survive in a Down Market - Getting Back to Basics. http://www.hotel-online.com/News/PR2003_2nd/May03_BoutiqueBasics.html

4. www.hotelmarketingstrategies.com

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