The Hotel Industry
The hospitality industry is a broad market that covers food and beverages, travel and tourism, lodging, and recreation. The hotel sector is under the lodging component, which offers accommodation to travelers and other individuals in the contemporary society. Many hotels today have created a niche market that caters to the needs of specific population groups. Importantly, many hotels serve the interests of their target audience by diversifying their business portfolio and generate income, which enables them to accomplish their desired goals in the competitive business environment. However, all hotels focus on providing accommodation to individuals for a certain timeline decided by the consumer, regardless of their location and pricing element. From this realization, hotels such as The Ritz develop different markup prices that are influenced by the changing consumer needs and the brand mission in the competitive business environment.
Hotels fall under the lodging segment of the broader hospitality industry that provides accommodation to different consumer groups. In this regard, consumers are exposed to luxury hotels such as The Ritz, youth hostels, and campgrounds, which address the different needs of individuals. For example, travelling business executives are likely to spend their overseas trips in luxurious hotels while young people touring the world on a budget will spend in youth hostels and campgrounds. From this realization, each hotel offering targets specific consumers who can easily afford the package. By specializing on the needs of different population groups, it becomes easier for firms to break even and accomplish their desired goals and objectives in the larger hospitality industry. Therefore, understanding the various consumer needs equips hotels with an opportunity to create various offerings that influence the experience offered in the various hotel firms around the world.
Since 2020 when the Covid-19 pandemic struck, the hotel sector and other segments of the broader hospitality industry have been most affected due to the restrictions put in place to reduce the spread of the deadly virus. According to a recent report by McKinsey & Company, the U.S. hotel revenue per room will further decline by 20% in 2023 (Hao, Xiao, & Chon, 2020). In 2019, the U.S. hotel revenue per available room was $88 before depreciating to a low of $34 due to unavailability of traveling consumers and other consumer groups within the sector. Even though prices have began going up, the audit firm anticipates a further decline caused by unforeseen market forces influenced by the restrictions imposed by governments to prevent the spread of the deadly virus (Asadi et al., 2020). From this realization, the hotel sector is expected to embrace innovation to remain operational by exposing consumers to attractive packages that meet their expectations. Currently, hotels such as The Ritz among others are offering contactless check-ins, which encourage individuals to spend time outside their homes in safe locations.
Leading Companies in the Industry
Hilton Hotels and Resorts was founded by Conrad Hilton in 1919 as Hilton Hotels and has since grown its global presence to control 216,379 rooms located in its 4,200 hotels in 94 countries around the world. Importantly, the Hilton establishment is the leading hotel brand in the world and targets high-end clients with its strategic positioning, which influences its interactions with different consumer groups (Chang, Ku, & Chen, 2020). Hilton’s mission statement is to become the preeminent global hospitality entity globally by exposing its consumers to exotic hotel service that meets their changing needs. The Hilton Brand has a variety of offerings that meet the different needs of individuals in their immediate environment. For instance, the Waldorf Astoria package offers world-class experience to guests in its 35 hotels around the world while the Garden Inn is customized to meet the needs of consumers travelling on a budget that allows individuals to connect with other travelers on the road. In 2020, the Hilton Hotels and Resorts had a market cap of $35.2 billion against a revenue of $4.3 billion within the same fiscal period.
Marriott International, Inc. is a global multinational hotel corporation based in Maryland, U.S. The global C-Corp corporation was founded in 1927 by J. Willard Marriott together with his wife, Alice Sheets Marriott, and has since grown to become the leading entities in the hotel industry, by running various independent hotel brands such as The Ritz-Carlton Hotel Company, LLC. Currently, the successful brand operates more than 1.4 million rooms located in 131 countries around the world in its 7,642 properties (Noonan & Rankin, 2017). However, the Marriott establishment only manages less than 3,000 of its global properties, leaving the rest to franchise agreements, where the Ritz-Carlton Hotel Company, LLC falls under. Today, the Marriott brand is represented by two entities that include Marriott International, Inc., which manages properties and franchises and Host Hotels and Resorts, which owns the properties. The hotel establishment has a market cap of $48.30 billion against a revenue of $10.6 billion in its just ended financial year.
The Ritz– Carlton Hotel Company, LLC
The Ritz-Carlton Company is a transnational corporation that operates a chain of luxurious hotels globally. Its headquarters are in Bethesda, Maryland, United States. The company was created in 1983 by William Johnson. The Ritz-Carlton Corporation consists of 108 hotels and resorts that operate on the global market in 30 nations. The business entity hires close to 40,000 individuals in its different hotels and resorts around the world (Huang, 2021). The company has redefined luxury housing by exposing consumers to fine living, which has seen it earn a strong reputation as one of the long-service luxurious hotels within the hospitality sector, including North America, Europe, the Middle East, Africa, and Asia. The Ritz mainly targets wealthy individuals who can afford luxury accommodation and dining. The company’s property structures are developed to offer an ultimate exceptional luxury experience, which varies significantly from other hospitality firms. Therefore, understanding the market proposition adopted by the Ritz is critical in developing a set of informed outcomes that influence the thought process of individuals in their immediate environment.
The Ritz was selected for this research because of its global presence and its mission to attract potential clients by treating them warmly and respectfully. Notably, the company’s financial statements are readily available, making it an excellent resource for a research study. Likewise, the service has become gradually notable in the subsequent periods, which is likely to influence people’s perspectives on the hospitality industry. The Ritz-Carlton’s financial statements reflect the assets, liabilities, incomes, and expenses openly attributable to the company (Hudson, 2017). In the same vein, the information captures various distributions considered rational by management to present the company’s fiscal position, outcomes of its processes, and the cash flows on a stand-alone basis. Exploring the Ritz exposes one to numerous operational levers integrated by the company to deliver genuine care and comfort. This paper will evaluate various aspects of the Ritz’s internal environment, external environment, and perform a strategic analysis that enhances the reader about the market outlook.
Over the years, the hotel industry has undergone a significant transformation, which has improved the overall experience accessed by consumers in the different facilities. For instance, service automation has become a major selling point for hotels, as clients associate with entities that provide a contact-less check-in to provision of other amenities within the hotel (Goryushkina et al., 2018). Inn many luxury hotels, customers are now using facial recognition system to access various amenities such as the bar, kitchen, and even opening their hotel rooms. From this realization, the introduction of chatbots and mobile apps has also reduced the overall wait-time that individuals would use to engage the customer service and convey their concerns.
Unlike in the medieval days when hotels were reserved for the working class, the world is now witnessing an increased presence of young people who are travelling around the world on a budget. In this regard, hotels have been compelled to develop special packages that cater for students and young people because of their high population, which easily converts into sales (). In the same vein, people of color and other minority population groups have also become a proper target audience because of their changing needs that define their perspectives towards life. Besides, there is an increase in male and female travelers, a move that has compelled hotels to develop befitting packages that meet the different needs and expectations held by the new breed of consumers.
Before Covid-19 was discovered, hotels were benefitting immensely from various economic factors such as low unemployment, career growth, and high labor-force participation. However, when Coronavirus was declared a pandemic, the hotel industry was largely affected because of the adverse impact of the measures put in place by governments to curb the spread of the deadly virus (Jiang & Wen, 2020). Currently, the industry is experiencing a slow growth as countries begin to reopen their borders to accommodate the rising demand for their services. From this observation, hotels must now develop strong contingency measures that cushion their operations from economic changes in the business environment.
During Presidential elections, hotel stakeholders have mixed reactions due to the unpredictable outcomes that may have far-reaching implications on its overall performance. For instance, in the heavily contested American Presidential elections, the hotel industry encountered many losses because of the heightened insecurity and violent cases, which affected their overall performance. Coming at a time when the industry had been hit by the lockdown measures, many hotels shut down completely because of their inability to meet the minimum threshold required to sustain their operations. Besides, high-crime rates and the slow resolution process has negatively affected hotel operations because of the increased skepticism among consumers on spending in hotels.
Since its inception in 2008, Airbnb, Inc. has posed a significant threat to the hotel industry because of its ability to appeal to low-budget travelers using relatively cheaper options than those provided by the hotels. Importantly, the peer-to-peer business model has thrived on the quick and convenient form of booking that enables individuals to accomplish their desired outcomes and engage consumers directly using appealing options that meet their changing goals and objectives. During the peak season, hotels hike up their average prices per room, making it impossible for travelers to access quality service at an affordable price. However, the emergence of Airbnb has provided consumers with an alternative that is customized to their needs at an affordable price.
Globalization has presented strategic opportunities that define the level of growth required to remain operational in the competitive hotel industry. Since many consumers are now exploring the world, established hotels such as The Ritz have been compelled to diversify their operations to other regions and meet the different needs of individuals in their surroundings. In the same vein, competition in the local context has also increased, compelling hotels to expand into other markets to increase their customer base (Florido, Jacob, & Payeras, 2019). From this realization, hotels that have failed to take advantage of globalization have encountered various sustainability issues because of the increased competition from their global competitors.
One of the best approaches to explore the hotel industry is the Porter’s five forces, which demonstrate the impact of different factors on an organization’s performance. In many instances, market forces compel firms to make certain decisions that influence their sustainability in their surroundings. From this realization, this analysis will explore the best approaches that firms can use to remain operational and accomplish their desired goals and objectives in the competitive business environment.
Unlike in the early 2000s, consumers now have a higher bargaining power due to the emergence of viable options that challenge the operational performance of hotels in the world today. Instead of booking directly with a preferred chain of hotel, travelers use tour operators who utilize the economies of scale to access low prices for the hotel rooms and other amenities, due to bulk buying. Walk-in customers have a low-bargaining power than their counterparts who use tour operators because of their inability to access the bulk-buying feature that influences various outcomes in the business environment.
Unlike the bargaining power of consumers, the ability of suppliers to disrupt the hotel industry is minimal. However, differentiation plays an important role in distinguishing hotels from others because of their ability to focus on niche markets, which enable them accomplish their profitability goals (González-Torres, Rodríguez-Sánchez, & Pelechano-Barahona, 2021). When the supply of hotel service is low, existing firms benefit immensely because of increased demand, which enables them to break even and accomplish their desired objectives. However, when the number of hotel firms is limited, they incur high operational costs due to the unavailability of suppliers who complement their operational performance in the changing business environment.
The hotel industry is one of the most competitive markets that discourages new entrants from penetrating into a new business environment. Many potential investors are skeptical of generating profits because of their inability to match up the offers provided by established firms in the hotel industry. However, new entrants can still pursue unique opportunities and create attractive products and services that meet the changing needs of individuals.
Technological innovations such as Airbnb have presented a series of challenges that undermine performance in the hotel industry. Importantly, the ability of consumers to access affordable and quality service from providers such as Airbnb has threatened hotel operations globally. In the same vein, the emergence of other options like transient lodging, homestays, and couch surfing has had an adverse impact on the growth and development of the hotel industry.
Competition is an important aspect of operation in the hotel industry, as different firms scramble for the same consumer groups. In this regard, each chain of hotel is focused on developing unique products and services to remain afloat and operational in the competitive business environment. Hotel brands that are stubborn to change encounter a series of problems that undermine their overall sustainability plans because of the emergence of improved services, which meet the changing needs of consumers around the world.
Many of the strategies being adopted by many industry players in the hotel sector revolve around sustainability, globalization, and growing demand for their different offerings. In the next five years, established hotels will have a solid sustainability plan that addresses numerous uncertainties in the industry. Even though expansion programs are time-consuming, creating demand for brand offerings is an important aspect that is being explored to accomplish expected outcomes in the competitive hotel industry.
Today, many hotels are struggling with the adverse effects of the Covid-19 pandemic that has disrupted normalcy in the sector. Even though many countries are slowly reopening, consumers are unwilling to spend in hotels because of the increased exposure to the deadly virus. From this realization, many hotels are currently involved in the development of innovations such as contactless check-ins, where consumers feel safe even when spending outside their homes. Besides, compliance with government regulations has also become a critical aspect of operations because of the strong influence of different measures aimed at controlling the fast spread of the new Covid19 strain.
Stakeholders in the hotel industry are highly optimistic that the emergence of the Covid19 vaccine is likely to lower the high rates of infection, which will in turn restore normalcy in the contemporary business environment. Many public utilities such as sports stadia have began accepting vaccinated fans because of their inability to spread and contract the virus from other infected people. In this case, hotel stakeholders are hoping that if anyone is fully vaccinated, then it will be easier to resume operations without the fear of contracting the deadly virus. Besides, many hotels with contactless check-ins are also appealing to consumers who are yet to receive the vaccination because of the low-risk exposure.
Over the years, strategic positioning in urban areas has always remained a major selling point for hotels because of the accessibility aspect that influences the thought process of consumers when making purchase decisions. Interestingly, a hotel located in a highway is likely to underperform because of the limited accessibility from different routes. In many instances, established hotel firms focus on locations to attract their target consumer groups and use their convenience as their unique selling proposition.
Today, many small chains of hotels are being forced to expand their services to remain operational due to the high competition levels from their established counterparts in the hotel industry. Unlike in the past, many travelers can select their destinations and preferred accommodation joints online, making it easier for small hotels to access business opportunities in the global market. Hence, embracing a global outlook during strategy formulation exercises influences the overall performance of hotels around the world.
The Ritz Carlton model is focused on identifying strategic locations before establishing their operations in a new or existing market. Customers have specific expectations that dictate their purchasing decisions, an aspect that the Ritz appears to have mastered. In the hotel business, location is an important aspect that influences a firm’s ability to attract specific customers and expose them to an environment where their needs can be met (Vivel-Búa, Lado-Sestayo, & Otero-González, 2018). Luxurious consumers have unique interests that differentiate them from other consumer groups. In this case, the Ritz conducts an extensive research before identifying locations that influence their overall perspectives towards their interactions with prospective clients. Creating an ideal location that is aligned with the expectations held by luxury customers is one of the primary selling propositions that the overall outcomes in the competitive hotel industry.
After identifying a strategic location, the Ritz curates and develops an appealing physical product that offers the much-needed exclusive experience to all its guests. Even though consumer needs are always evolving, the Ritz prides in its accurate interpretation of the expectations held by its luxurious clients. Through continued investment in Research and Development (R&D), the Ritz has predicted some of the various service elements that consumers might develop interest and insist on having before booking themselves in their hotel. Another aspect that demonstrates the Ritz competency is its unlimited expenditure per room, which enables the hotel to offer exquisite experience that meets the changing needs of individuals in their surroundings. In 2009, the Ritz was reported to be spending up to $1 million per room in a bid to meet the changing needs of individuals who visit their luxurious accommodation facilities.
When firms empower their workforce, it becomes easier to accomplish different tasks in the business environment because of their ability to accomplish different milestones. The Ritz tagline is “We are Ladies and Gentlemen serving Ladies and Gentlemen.” The Ritz’s motto ensures that employees treat guests according to how they would want to be treated if they were visiting the hotel. From this observation, the firm has succeeded in its efforts to prepare a team of competent employees who understand their roles and responsibilities, as well as, their contribution towards the company’s growth and development. When employees meet their objectives with ease, they are usually more motivated to strike meaningful conversations with their clients and expose them to an environment where they can experience the different offerings curated by the hotel.
Over the years, researchers have developed various approaches that firms can use to achieve a competitive edge over other industry players in the business environment. One of the approaches that modern corporations can use to gain an edge over other industry players is acquiring a competent workforce that can easily execute tasks and deliver results in the workplace. Michael Porter believed that many firms succumb to competition from other organizations because of their dedicated focus on operational effectiveness, as opposed to strategic positioning in the business environment (Alvarez-Ferrer, Campa-Planas, & Gonzales-Bustos, 2018). Firms that rely on technological innovations in their operations require an extra level of focus that exposes them to a context where they can accomplish their desired outcomes in the competitive hotel industry. From this realization, hotels cannot rely on technological innovation as the primary source of their competitive advantage because of the ability of other firms to replicate the invention and integrate it in their operations.
It should be noted that operational effectiveness is an important element of business that defines company performance in the hotel industry. Notably, hotels should embrace innovations that enable them to accomplish their desired goals and objectives. For instance, firms should utilize technological solutions to enhance the overall quality of service, reduce operational costs, and curate positive customer experience to promote brand loyalty among consumers (Hernández-Perlines, Ariza-Montes, Han, & Law, 2019). However, firms are discouraged from heavily relying on operational effectiveness when developing strategies for their business models. Instead, hotels should integrate the business model with strategic positioning to fully explore the market and accomplish their expected milestones. For this reason, strategic positioning enables firms to develop unique products and services that cannot be emulated by other industry players in the competitive business environment.
Viewing competitive advantage from a resource-based perspective enables firms to develop unique products and services that differentiate them from other industry players in their immediate environment. In this regard, the concept of competitive advantage should be sustainable to enable firms accomplish their anticipated milestones when attracting customers being targeted by their close competitors. From this observation, firms such as The Ritz embrace the four concepts of sustainable competitive advantage, which complements their operational performance in the hotel industry.
Resources used by firms to equip them with a competitive edge over other industry players must be valuable to complement the organizations in achieving their business goals. While the Ritz is not the only luxurious hotel offering high-quality guest service in the hotel industry, it has succeeded in its efforts to create a unique product that makes customers receive value for their money. Luxury travelers prefer the Ritz-Carlton to other hotels because of their ability to create unique experiences that have a long-lasting impact on their experience and brand expectations.
Personalized guest service sets the Ritz-Carlton apart from other providers in the hotel industry. Employees at the luxurious hotel are encouraged to go an extra mile in ensuring that customers are totally satisfied with the quality of service offered in the hotel. According to a 2009 interview conducted by Forbes, the Ritz-Carlton chief executive indicated that employees in all hotels have an allocation of up to $2,000 where they can utilize to complement the guest experience. While many hotels usually spend when complementing customers for bad experience, the Ritz-Carlton incurs additional costs to offer personalized service to guests who spend in their properties around the world. This way, individuals who are exposed to this environment develop a strong connection with the service provider, enabling the firm to acquire an edge over other industry players in the competitive hotel industry.
Differentiation in the style adopted across the Ritz-Carlton’s properties is one of the primary selling points that separates the firm from other hotels in the business environment. Luxury travelers enjoy the scenic beauty manifested by the Ritz-Carlton’s properties globally. In this regard, reserving a room at the Ritz-Carlton comes with high expectations because of the nature of standards adopted by the firm in its plight to accomplish desired outcomes. However, the Ritz-Carlton Club Level rooms are imperfectly imitable because of the high-end amenities offered to travelers. In the Club Level rooms, one can access butler services, complimentary Wi-Fi, and personalized gifts after the end of their stay. In the same vein, guests can access the Club Lounge, where they can interact with other travelers, read books, and work.
While many luxurious hotels offer reward programs to their esteemed clients, the Ritz-Carlton has one of the most effective loyalty programs that cuts across various consumer needs and expectations. One can start enjoying the perks after ten nights’ stay annually. The benefits include earning and redeeming points across 6,500 hotels from 29 brands affiliated to the Ritz-Carlton. Importantly, the ability of the hotel to establish strategic partnerships that expose their customers to an environment where they can enjoy a wide range of benefits is a major selling point that equips the firm with a sustainable competitive advantage over other providers in the hotel industry.
THE RITZ-CARLTON SARASOTA RESORT
DECEMBER 31, 2017
|Investment in resort property, net||$||96,350,504|
|Cash reserve for resort improvements||2,859,062|
|Accounts receivable, net||4,203,226|
|Prepaid expenses and other assets||444,246|
|Liabilities and Owner’s Equity:|
|Mortgage loan payable||$||23,883,444|
|Accounts payable and accrued expenses||12,864,476|
|Refundable membership deposits||18,627,400|
|Membership fees deferred income||2,699,905|
|Total liabilities and owner’s equity||$||106,859,611|
The Ritz-Carlton empowers its employees to remain versatile when undertaking different tasks and responsibilities that affect the visiting guests. Importantly, the hotel has succeeded in its efforts to provide top-notch service because of the frequent training sessions that enhance the employee perspectives towards life and other aspects in the hospitality business. Besides, the luxurious hotel has accumulated many assets during the years, a move that has enabled it to remain operational and accomplish its different goals and objectives over the years. From this realization, stakeholders affiliated to the firm demonstrate their goodwill through their service and commitment towards supporting the growth of the service provider.
Many individuals associate the Ritz-Carlton brand name with a high cost, discouraging them from exploring the affordable services offered by the luxurious hotel. This way, the hotel encounters various challenges that hinder its growth and development in the competitive business environment where service providers are now targeting different consumer groups to break even. In the current economic times, it is becoming difficult to specialize offering hospitality services to a niche market because of the evolving consumer needs and purchasing preferences (Yfantidou, Spyridopoulou, Chatzigeorgiou, & Malliou, 2019). The growing uncertainty has interfered with the customer’s decision-making process, exposing individuals to an environment where they cannot accomplish their desired goals and objectives.
Currently, the Ritz-Carlton can explore the evolving consumer market and accomplish its desired goals by offering different products and services that cut across the needs of the various population groups in the business environment. Introducing unique packages is one way of demystifying the assumptions associated with the Ritz-Carlton brand name. Increasing the company’s clientele through intentional partnerships can play an important role in enhancing its operational performance in the competitive business environment (Martín-Rios & Ciobanu, 2019). In the same vein, tapping into the expanding tourism market through opening up in virgin markets can help enhance the brand’s visibility in the global market. Since many tourists are now looking for novel travel destinations, the Ritz-Carlton can showcase its experience in the hospitality industry through strategic positioning as a market leader.
The increasing operational costs in the hotel industry due to the measures being undertaken to curb the fast spread of the Covid-19 pandemic are likely to disrupt the Ritz-Carlton’s ability to meet the changing needs of individuals. Importantly, the pandemic has exposed firms to various challenges that undermine their operations in the business environment. Even though established firms such as the Ritz-Carlton may have strong contingency plans, it is impossible to maintain its operations and sustain their business model during the tough economic times. Besides, many consumers have reviewed their travel patterns due to the growing uncertainty, which has limited their spending patterns (Pantelic, 2017). Likewise, the growing competition from other offerings in the hospitality industry such as Airbnb is also an important aspect that has had a significant impact on the overall functioning of the industry. Therefore, the Ritz-Carlton will be compelled to review its business model and align it with the evolving times, a move that might disrupt its operations.
The Ritz-Carlton is a luxury subsidiary of the Marriott International, which acts as its parent company by overseeing various operations. In this regard, the corporation exposes its guests to a wide range of exquisite services that meet their expectations, a move that has revolutionized the overall service provision in the hotel industry. Currently, the firm has a competitive yacht program that exposes travelers to a unique experience while at sea, a move that extends its quality service outside the hotel premises. From this realization, exploring the current competitive strategies adopted by the firm enhances the overall beliefs and anticipations, which enhance the perspectives of individuals towards traveling.
Ever since the Ritz-Carlton commenced its operations in the U.S., it has made insurmountable progress witnessed in its presence in over thirty countries around the world. The luxury brand of hotels brand has focused on identifying unique locations in its global destinations to capture the overall appeal of individuals. Many of the destinations in the global context are located next to airports or close to major highways (Gupta, 2019). Accessibility is an important selling point for the Ritz-Carlton because of its influence on the purchasing decisions made by individuals and its impact on the hotel’s relations with other people. Besides, the firm has an active online presence that enables it to maximize its reach and gain access to niche markets that might have a limited understanding of the hotel.
The Ritz-Carlton has a niche market that enables it to maximize its earnings and widen its revenue streams, which facilitate their operational performance. Notably, many of the guests targeted by the Ritz-Carlton include business executives, leisure travelers, and other consumer groups within the upper and upper-middle class. Over the years, the Ritz-Carlton has strategically positioned itself as a premium hotel brand that meets the needs and interests of high-end customers. Many of the guests who spend at the Ritz-Carlton are willing to use high amounts to access a certain experience that meets their needs. Unlike other guests who value money before experience, the client list at the Ritz-Carlton values comfort and additional benefits that enhance their overall experience at different facilities around the world. This way, the Ritz-Carlton has succeeded in its efforts to offer premium prices to its guests because of their willingness to spend more for extra comfort.
The Ritz-Carlton relies on the word-of-mouth recommendation from its guests to other individuals. Importantly, the firm trusts its guests to recommend its various destinations to other people within their circles. By so doing, the firm benefits from a vocal chain, which exposes it to an enabling environment where it can accomplish its expected outcomes. In the same vein, the luxurious hotel places advertisement copies on billboards and travel magazines with a huge consumer reach in the global context. However, social media has played an important role in the promotion of its different products and services (Varkaris & Neuhofer, 2017). From this perspective, the different promotional methods have had a huge impact on the Ritz-Carlton’s brand visibility and ability to attract other individuals in their immediate environment. Apart from the active advertising strategies, the Ritz-Carlton’s loyalty program contributes immensely towards the promotion of its different products and services. Since guests can earn points by spending in various destinations controlled by the Ritz-Carlton, the hotel ends up with additional revenue that sustains its operations in the business environment.
The primary strategies of change include reengineering, restructuring, and innovation. Given the evolving consumer world, the Ritz-Carlton undertakes various operations that enable it to remain operational even when the external world disrupts outcomes in the industry. For instance, employees at the Ritz-Carlton undergo different learning programs to enhance their knowledge on customer relations and the standards upheld by the facility since inception. Since the company is always introducing new strategies and standards to match the changing consumer needs, the regular training sessions ensure that employees understand the importance of sustaining the unique needs and interests of consumers. Proper training of employees is one of the main aspects of acquiring a competitive edge over other industry players in the market. From this observation, the Ritz-Carlton’s ability to study the market and develop innovative strategies is critical in the realization of its different needs that meet the changing needs of consumers.
Since the Ritz-Carlton regularly empowers its employees, it should focus on creating additional opportunities for its workforce to identify various opportunities that can be explored to improve the overall outcomes in the workplace. Notably, utilizing its reputable brand name and enhancing its reach through consistent expansion programs will enable the facility to overcome the emerging challenges in the hospitality industry. It should be noted that its global presence around the world has a huge impact on its operational performance because of the increased consumer uptake that enables individuals to access the various services offered by the reputable brand in their immediate environment (Krupskyi et al., 2017). For this reason, exploring the underlying business opportunities in the different locations will open up its business and enhance the firm’s operational performance.
It is impossible to change the perceptions around the Ritz-Carlton’s brand name because of the aspect of identity and existence over the years. However, the hotel establishment can develop various offers and products that meet the changing needs of individuals. For instance, the tough economic times have presented a series of challenges to firms in the hospitality industry because of the measures put in place by the government to curb the spread of the deadly virus. Taking advantage of the loophole created by the pandemic to offer affordable services is one of the best techniques that can be used to enhance the overall operational performance at the Ritz-Carlton. Despite the declining bottom-line, the facility can expedite its intended growth in the contemporary world to accomplish desired outcomes that are aligned with its business mission and vision.
Nonetheless, the Ritz-Carlton should be aware of the increasing operational costs in the current economic times because of their impact on the firm’s business model. The pandemic has had a huge impact on the hospitality industry because of the containment measures that limited movements. Tourism relies heavily on consumer mobility and their ability to make informed purchasing decisions influenced by their needs and interests. However, the rising uncertainty due to the pandemic has discouraged consumers from making random and impromptu decisions that benefit hospitality providers around the world. In this regard, the Ritz-Carlton should review its business model and create interesting travel offers that compliment the needs of individuals during the tough economic times. Likewise, the growing competition from other alternatives such as Airbnb have an adverse effect on the operational performance of the Ritz-Carlton. For this reason, the establishment should develop a set of effective contingency plans that respond to the changing times and their ability to explore underlying opportunities in the competitive business environment.
While the Ritz-Carlton focuses on individual travelers, its marketing team can shift its marketing tactic and target corporate groups to maximize its earnings. Offering lucrative deals to corporate firms and convincing them to book their accommodation with the Ritz-Carlton can be a game-changer in the tough economic times. Given the limited mobility of consumers due to the pandemic, the hotel establishment should focus on reviving its sales by diversifying its business interests to capture the attention of individuals in the contemporary world. Importantly, the Ritz-Carlton can change its business model by introducing rooms and meeting spaces, as a primary package to various corporates in the U.S. and beyond looking to expand their business interests and explore the world at the same time. Listing the different properties controlled by the Ritz-Carlton on social media and other interactive networking sites can be a rewarding experience because of the different consumer uptake regarding the new product proposition.
Even though many travelers have specific needs and expectations, advertising the hotel using popular tourist destinations is a viable strategy that can be used to diversify the firm’s operational performance. Importantly, a section of the modern travelers is less-informed about the tourist destinations they can explore when going around the world. In this regard, informing them about the benefits of visiting various destinations is an important aspect that can increase the overall performance of the hotel in today’s competitive market. While touring the popular destinations, the focus should be placed on the Ritz-Carlton as a recommended accommodation option that will complement their visit to the exciting tourism location.
The Ritz-Carlton should invest heavily in research activities that identify ongoing events in all their locations to attract the visiting guests to their facilities. Cross-promotional sales strategies have a huge impact on a firm’s operational performance if they establish meaningful partnerships that target specific consumer groups (Miguéis, Camanho, & Falcão e Cunha, 2019). When visiting a new destination, accommodation forms an important element of a person’s itinerary. Given the different needs of individuals, the Ritz-Carlton should position its facilities as the leading accommodation provider of choice for all their luxurious interests and expectations. This way, it becomes easier for the firm to break even and diversify its revenue streams while maintaining its position as a luxury service provider in the hospitality sector.
Usually, hotels adjust their pricing depending on the season and traveling frequency of individuals around the world. During the low season, many hotels adjust their price accordingly using low rates to attract travelers and maintain their projected revenue generation. However, during the high season, clients are willing to spend huge amounts for extra services and luxurious products that complement their taste and preferences. In this regard, the Ritz-Carlton should monitor the trends and make informed decisions that enhance its revenue generation through increased operational performance. Since the hotel brand is known for its luxurious offerings, the Ritz-Carlton should broaden its marketing perspectives and incorporate upselling and re-marketing techniques that enable the firm to accomplish its desired goals and objectives.
Over the years, the hospitality industry has experienced massive growth and development due to its consistent approaches in exposing guests to competitive offers that meet their changing needs. In this regard, hotel management has been exposed to a series of challenges revolving around the need to make informed decisions based on the guest perspectives towards the different packages offered by firms in the industry. Notably, the Ritz-Carlton is one of the service providers offering luxury accommodation to travelers across the world. Given its reputation in the business environment, the brand is expected to create unique experiences and memories for its guests during their stays in their global locations. However, the success of the hotel brand is based on its ability to predict consumer patterns and other traveling elements that influence their hotel selection process. Therefore, the Ritz-Carlton’s decision-making process is largely influenced by their ability to monitor the market trends and other influences that range from the external forces to the evolving consumer needs.
Albeit tedious, the Ritz-Carlton can sponsor surveys to understand the popular travel destinations among travelers and other aspects that influence the decision-making process in the world today. Many studies have tried to analyze and interpret the consumer’s mindset and the various issues that influence their thought process when selecting their travel destinations. However, the scholarly research focuses on theoretical frameworks to interpret the consumer mindset, a move that ignores the role of advertising and promotional tactics on their decision-making process. Importantly, segmenting the consumer market exposes firms to an environment where they can accomplish their desired goals and objectives. In the same vein, understanding the expectations held by consumers is an important process that enhances the outcomes of events when formulating business decisions across the firm’s global locations. Therefore, curating the process and highlighting the different challenges that interfere with the consumer mindset is crucial for the development of innovative products that meet the changing needs of individuals.
Many leisure guests anticipate a comfortable, worry-free, and an enjoyable experience when scouting for their preferred hotel destinations. In this regard, the Ritz-Carlton should create an enabling environment where their target audience can easily access these elements without experiencing any challenges. Notably, the decision-making process that leads to the realization of these attributes is largely based on the consumer’s preferences. In the same vein, the hotel is expected to embrace some level of creativity when curating the travel experience for its leisure guests to maximize on their revenue generation and other income expectations. When interacting with business travelers, the Ritz-Carlton should customize their service offering to ensure that the population group can easily access their prioritized needs and expectations. Unlike leisure guests, business travelers look forward for high satisfaction and facilities that can enable them to save time when commuting to their business destinations. For this reason, the Ritz-Carlton can customize its service offering by exposing the business travelers to individuals who are familiar with the client’s field of expertise to enable them make informed decisions during their stay in the selected property.
Understanding the various consumer needs equips hotels with an opportunity to create various offerings that influence the experience offered in the various hotel firms around the world. This study has explored the hotel industry by focusing on the Ritz-Carlton and its ability to meet the different needs of its target audience. Unlike in the past when hotels encountered limited challenges, many firms have succumbed to the uncertain times triggered by the pandemic. Many hotels are struggling to remain afloat because of the unwavering uncertainty that has adversely affected the hospitality industry due to the measures put in place to control the spread of the deadly virus. However, firms such as the Ritz-Carlton have demonstrated the approaches hotels can use to sustain their operations by embracing innovations to bypass the challenges posed by the pandemic. Some of the recommendations that the Ritz-Carlton can use include destination marketing sales, group bookings, and revenue management sales strategies to diversify its operations during the tough economic times.
During my research, I have learned various business aspects that influence outcomes in the hospitality industry. For instance, establishments such as the Ritz-Carlton target niche markets that control their service provision and operational performance. While the Marriott chain of hotels operates as an independent entity in the hotel industry, it also owns the Ritz-Carlton, which runs as an independent luxury component of the parent company. Each of the facilities operate independently and focus on conquering the market, a move that enables them to accomplish their desired growth and development-oriented objectives. I am now certain of the impact of the pandemic on the hospitality industry and the measures taken by firms to counter the adverse effects of the unwavering uncertainty in the consumer market. Future studies should focus on the success of the measures undertaken by firm in line with the government’s directives to curb the spread of the deadly virus. Besides, hotels should develop business continuity plans as part of their contingency plans to overcome the impact of the external environment on their operations.
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|Investment in resort property, net||$||96,350,504|
|Cash reserve for resort improvements||2,859,062|
|Accounts receivable, net||4,203,226|
|Prepaid expenses and other assets||444,246|
|Liabilities and Owner’s Equity:|
|Mortgage loan payable||$||23,883,444|
|Accounts payable and accrued expenses||12,864,476|
|Refundable membership deposits||18,627,400|
|Membership fees deferred income||2,699,905|
|Total liabilities and owner’s equity||$||106,859,611|
Fig 1.0 A statistical representation of the impact of Covid-19 on the hotel industry.
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