Marketing Strategy and Planning: Sustainable Business ModelsFinal Project

PCHPacific Coast Hotels

Nate, Bree, Dustin, KateMKT 540 – Professor Zafar Iqbal

November 10, 2010

Presentation OverviewCurrent Market

Growth Opportunities for Current Players

Start-up concept – PCH Hotels

Predicting Future Impact of PCH

Winter is coming and we are all probably planning to vacation where the weather is warm…

Majorly Underserved Market: Us!Young professionals who like to vacationEnough disposable income to travel but not

enough to splurge on luxury staysPrefer to travel to resort destinations,

especially during winter months

What are our Current Options?

PRODUCT LEADERSHIPACCESS TO HIGH PERFORMANCE

more featuresmore functionalitylatest technology

complexityLINKED WITH AESTHETICS AND WITH STYLE

PORTRAY SOPHISTICATION

pric

e

performance

OPERATIONAL EXCELLENCELOWER COSTS

INCREASE CONVENIENCEOBTAIN RELIABILITYHAVE EASE OF USE

CUSTOMER INTIMACYHAVE A HIGH LEVEL OF CUSTOMIZATION

HAVE HIGH LEVEL OF SERVICEHAVE A COMPLETE SOLUTION

ACCESS TO A WIDE SELECTIONOBTAIN ADVICE & CONSULTFEEL OF AN “EXPERIENCE

Westin

Motel 6

4 Season

s

Current Market Players





pric

e

performance






Westin

Motel 6

4 Season

s

Our OE Player: Motel 6 (Accor)

Full Motel 6 (Accor) Business Model

Consumer Focus

Keep expenses very low,

esp. extraneous

svcs

Variable Org

Structures

Home-Like

ComfortAffordabl

e Convenient

Maximize Value for

Lower Price than

Competitors

Create a Comfortabl

e Environmen

tRate of new

hotel openings (~3/yr)

Corp Expenses below 7% of

Sales

Employee Turnover (Metric)

100% Customer

Satisfaction

Vertically Integrate

d by Acquisitio

ns

Liberated Management Style

Culture of Empowerment and Responsib

ility

Choose own

investors

Friendly, knowledg

eable employee

s

Quality Controlled offerings

“Decentralized

Cohesion”

StrategicAcquisition

s

Electronic Property

Mgmt System

Experienced, Happy

Staff

Carefully selected

extraneous services

Leadership Team

Accor Academy

Occupancy Rate (75%

min.)

Brand Managem

ent

Motel 6 (Accor) Business Model

Keep expenses very low,

esp. extraneous

svcs

Variable Org

Structures

Affordable Convenient

Maximize Value for

Lower Price than

Competitors

Rate of new hotel openings

(~3/yr)

Corp Expenses below 7% of

Sales

Vertically Integrate

d by Acquisitio

ns

Choose own

investors

“Decentralized

Cohesion”

StrategicAcquisition

s

Electronic Property

Mgmt System

Carefully selected

extraneous services

Left Side of Model:

Operationally and Financially Convenient for Price-Sensitive Consumers

Motel 6 (Accor) Business Model

Consumer Focus

Home-Like

Comfort

Maximize Value for

Lower Price than

Competitors

Create a Comfortabl

e Environmen

tEmployee Turnover (Metric)

100% Customer

Satisfaction

Liberated Management Style

Culture of Empowerment and Responsib

ility

Friendly, knowledg

eable employee

s

Quality Controlled offerings

Experienced, Happy

StaffLeadership

TeamAccor

Academy

Occupancy Rate (75%

min.)

Brand Managem

ent

Right Side of Model:

Allow the customer feel as comfortable as possible --“This room feels like home”





pric

e

performance






Westin

Motel 6

4 Season

s

Our CI Player: Four Seasons

Four Seasons Business Model

Desirable location

Completehospitality

solution

Luxurious environment that

feels like an

experience

High QualityPersonalized

service

High Avg.Daily Rate (ADR) $200-$270

Occupancy Rate above

70%

Low employee

turnover rate (<50%)

REVPARTop three in local market

Provide wide

range of guest

services

Request Feedback after each hotel

opening

270 core standard ops for each

property

Standard feel to each

property: “beautiful, personal,

comfortable”

Limited rooms for corporate clients and travel agencies

Detailed and

customized

website

Performance

based incentive

s and indiv.

recognition

Target clientele:

Well educated, successful,

wealthy

Design Team:

- Private spaces--elegant architecture

Strategic hotel/resort

locations- Strength of local economy, - Mkt research, - Location = destination

Innovative technology

info systems

Powerful brand name

Knowledgeable

employees with

hospitable nature

Customer Satisfaction

>90%

Focused and

visionary leadershi

p

Train, develop

and career

counsel employe

es

Maintain high standards of

luxury

Guest satisfaction and loyalty

among target clientele

Database with guest

preferences

High call to reservation conversion

(25%)

Employee to guest ratio

(1:1)

Provide high level 24 hr. customer

service

Quality control metric

Conduct internal

and external audits of standards

Strategic, focused growth strategy

- Mid-sized hotels/resorts- Exceptional elegance

7 Culture Standar

ds

Regional Mgt.

Structure w/

corporate equity

interest

High Quality

products-pillows-beds

Four Seasons Business Model: Luxurious Environment Luxurious

environment that feels

like an experience

Occupancy Rate above

70%

REVPARTop three in local market

Provide wide

range of guest

services

Request Feedback after each hotel

opening


property



comfortable”


Target clientele:


wealthy

Design Team:




Powerful brand name

Focused and

visionary leadershi

p

Maintain high standards of

luxury


Conduct internal




7 Culture Standar

ds

Regional Mgt.

Structure w/

corporate equity

interest

High Quality


Four Seasons Business Model: Complete Hospitality Completehospitality

solution

High Avg.Daily Rate (ADR)

$200-$270

Occupancy Rate above 70%

Low employee turnover rate

(<50%)

REVPARTop three in local

market

Provide wide range

of guest services

Request Feedback after each

hotel opening


property



comfortable”


Detailed and

customized website

Performance based incentives and indiv. recognitio

n

Target clientele:


wealthy

Design Team:





info systems

Powerful brand name

Knowledgeable

employees with

hospitable nature

Customer Satisfaction >90%

Focused and

visionary leadership

Train, develop

and career

counsel employee

s



Database with guest preference

s

High call to reservation

conversion (25%)


(1:1)


service


Conduct internal




7 Culture Standards

Regional Mgt.

Structure w/

corporate equity

interest

High Quality


Solution

Four Seasons Business Model: Desirable Location

Desirable location


$200-$270



market

Provide wide range

of guest services


hotel opening


property



comfortable”


Detailed and

customized website

Target clientele:


wealthy

Design Team:





info systems

Powerful brand name

Knowledgeable

employees with

hospitable nature


Focused and


Train, develop

and career

counsel employee

s




s


conversion (25%)



7 Culture Standards

Regional Mgt.

Structure w/

corporate equity

interest

High Quality


Four Seasons Business Model: HQ Personalized

High QualityPersonalized

service


$200-$270


Low employee turnover rate

(<50%)


market

Provide wide range

of guest services


hotel opening


property



comfortable”


Detailed and

customized website

Performance based incentives and indiv. recognitio

n

Target clientele:


wealthy

Design Team:





info systems

Powerful brand name

Knowledgeable

employees with

hospitable nature


Focused and


Train, develop

and career

counsel employee

s




s


conversion (25%)


(1:1)


service


Conduct internal




7 Culture Standards

Regional Mgt.

Structure w/

corporate equity

interest

High Quality


Service





pric

e

performance






Westin

Motel 6

4 Season

s

Our PL Player: Westin

Westin Business Model

High Performance

Best Locations

Westin Kids Club

Linked to Aesthetics

High Level of Service

Portray Sophistication

Best Employees Best Amenities

In Prime Locations(within 2 miles of

city centers)


(795 JD Power Score)

Speed of Check in(2 minutes)

Dream Westin Recruit Quality Employees

Create Extravagant

EnvironmentRunConciergeSensory

WelcomeRepresent

Healthy Lifestyle

Growing number of locations

Superfoods menu

Heavenly Spa Experience Engineers

Corporate Culture

Heavenly Beds

Great Location s

Intent to return(85%)

Smoke Free Environment

Westin Business Model: High Service Level

Westin Kids Club

High Level of Service

Best Employees


Dream Westin

Recruit Quality Employees

Create Extravagant

Environment

Represent Healthy Lifestyle

Superfoods menu

Heavenly Spa

Experience Engineers

Corporate Culture

Heavenly Beds



Westin Business Model: Sophistication

Best Locations

Portray Sophistication

Best Amenities

In Prime Locations(within 2 miles of

city centers)



Dream Westin

Create Extravagant


WelcomeRepresent

Healthy Lifestyle

Superfoods menu

Heavenly Spa


Corporate Culture

Great Location s

Westin Business Model: High Performance

High Performance





Dream Westin


Create Extravagant


Welcome

Superfoods menu

Heavenly Spa


Corporate Culture

Heavenly Beds

Great Location s



Westin Business Model: Aesthetics

Linked to Aesthetics



Create Extravagant

Environment

Sensory Welcome

Represent Healthy Lifestyle

Growing number of locations

Superfoods menu

Heavenly Spa


Corporate Culture

Great Location s




Northeast Migration by Four Seasons

NE Attack Move by Four Seasons

The Four Seasons maintains exceptional spa experiences for guests, and also launched the “Spa Escape Promotion”• Non-guests can book spa packages at the hotel• No overnight stay required• Available in 50 cities on 4 different continents

The Heavenly Spa is an exclusive luxurious escape for Westin guests...

At the Four Seasons Spa, “it’s about your entire experience, from the moment you arrive to your time in the lounge areas and treatment rooms to a relaxing departure. In the industry, this intricately designed process is called a ‘spa journey.’”

Northeast Attack by Four Seasons



Blocking Strategy and Southwest Migration by Westin

Westin’s SW Blocking Move

To prevent Four Seasons migrating to PL, Westin increased the level of customized complete services.

Westin offers complete day planning service:• spa days• day care • transportation to

business• tickets to events• guided local tours.



Blocking Strategy and Southwest Migration by Westin

This Battle Leaves an Opening at the NE Corner of OE and SW Corner of CI





pric

e

performance






Westin

4 Seaso

ns

CI-PL war

Motel 6

Open Space

A Battle Ensues…

Introducing Our Concept: Pacific Coast Hotels

Clean, Quiet RoomsModern LookProvide Only what the Guests NeedLatest TechnologyLow Price Point

Location, Location, LocationClose Proximity to Popular Resort DestinationsUnique Opportunity in California’s Tourism SpotsWithin One-Day Drive of Each Other

PCH: Target Market21-40 years old

Young Professionals

Cost-Conscious Couples

Weekend Vacationers

Business Travelers

Operational Efficiencies:How Will PCH Make It Work?

Self Serve Check In/OutVending of Toiletries/Personal ProductsIron, Dryer, Safe RentalsMaid Service every 3 daysMulti-Functional Empowered EmployeesOutsourced Amenities Standardized Rooms

PCH: Guest DelightersFree Wi-FiFree Airport ShuttleHi-Tech ExperienceOutsourced Amenities

RestaurantHealth ClubZip CarBikes

PCH: Critical Success FactorsCost Control

Employee UtilizationTechnologyStrategic Partnerships

Provide Just What the Guests NeedOutcome FocusedQuality Locations

Fast Paced yet Controlled Growth

Concept Equation

PCH

+++

Internal External

Con

trol

led

Not

Con

trol

led

Not

Integration ModularityComparison

Westin – Completely Integrated

PCH – Very Modular

PCH: Adjacency ScreenResources

Increasing Asset Base and increasing ROI Improving Credit Market Motivated, flexible employees Strong partnerships

Activities 3 year project cycle Innovatively outsource most functions/services Identical operational and accounting models to other

propertiesValues

Will increase convenience and flexibility to customers Target resort locations with lack of low-cost options

Lake TahoeNapa Valley

San Francisco

San Diego

Palm SpringsL.A.

Laguna Beach

Phase 1

Santa BarbaraMalibu.

San Luis Obispo

PCH: Adjacency Move Add locations along pacific coast

Less than a half day drive between most locations

Presence in more desired resort destinations

Phase 2

Maintain High Standards

Low Price Point Clean, Modern, Quiet Room

Increased Utilization of

Assets

Occupancy:>75%

Utilizing partnersh

ips for guest

amenities

Efficiencies from cross functional employees

Streamlining of Frills

Automated Check

In/Out

Price:10% lower than nearest direct

competitor

Desirable Location

Web Based

Customer

Services &

Booking

Toiletry Vending

Customer Service

Inquiries per visit: <1

Employees 1:16 guests

Latest Technology

Convenient and Popular Locations

Booking: >50%

through PCH

website

Using “Modern” Designers for rooms and lobby

Build loyal customer

base

Strategic Partnerships

Self Service Model

Highly Skilled and Motivated Employees

Strong Brand Identit

y

Low Cost Amenitie

s

Multi Functional

Website and Smart Phone Application

Desirable Location

PCH


Low Price Point


Assets

Occupancy:>75%

Utilizing partnershi

ps for guest

amenities

Efficiencies from cross functional employees

Streamlining of Frills

Automated Check

In/Out

Price:10% lower than nearest direct

competitor

Web Based

Customer

Services &

Booking

Toiletry Vending

Customer Service


Employees 1:16 guests

Latest Technology

Booking: >50%

through PCH

website



base


Self Service Model


Strong Brand

Identity

Low Cost Amenities

Multi Functional


Desirable Location

PCH Business Model: Low Price


Clean, Modern, Quiet Room


Assets

Occupancy:>75%

Utilizing partnersh

ips for guest

amenities

Web Based

Customer

Services &

Booking

Customer Service




base


Self Service Model



y

Low Cost Amenitie

s

Multi Functional


Desirable Location

PCH Business Model:Clean, Modern, Quiet Room

Occupancy:>75%

Utilizing partnersh

ips for guest

amenities

Desirable Location

Convenient and Popular Locations



base




y

Low Cost Amenitie

s

Desirable Location

PCH Business Model: Popular Location

Strengths•Untapped Niche Market•Modular Business Model•Cost Control•Location•Price Point•Cheap Chic

Weaknesses•New Business•Lack of Brand Awareness•Room Size•Regional Player

Opportunities•New Markets-Scalable•CI Customer Appeal•Strategic Partnerships•Change the market

Threats•Economy•New Market Entrants•Saturation of Total Market•Union Employees

PCH: SWOT Analysis

Predicting Future Impact of PCH:Price-Performance Graph





pric

e

performance






Westin

Motel 6

4 Seaso

ns

PCH

PCHPacific Coast Hotels

Questions?

Marketing Strategy and Planning: Sustainable Business ModelsFinal Project

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Transcript of Marketing Strategy and Planning: Sustainable Business ModelsFinal Project