A hotel is an establishment that provides short-term lodging facilities at a certain rate. The hotels of various types make up the hotel industry. Hotels can be of different types based on the range of facilities they provide to the guests in the rooms they are offered. An average hotel room contains a bed with a mattress, a desk, and a television. The hotel industry rates its various hotels in start ranging from one to five stars based on the facilities the hotel offers for its guests. Hotels can also be of different types based on the location they have for example garden hotels, cave hotels, railway hotels, and so on (BBC, 2007). There are various hotels that have gained fame over the years based on the quality of their services and uniformity across the globe. These include Marriott Hotels, Best Western, Hotel Inn, and various others.
Following are the four dimensions of the Ansoff Matrix for hotel industry:
Market Penetration
Market penetration is the action of promoting existing products in existing markets. The hotel industry uses market penetration in various ways. The first strategy they have is to aggressively market their facilities across suitable market channels. This helps to attract customers. They also offer suitable discounts during certain times of the year such as New Year and Christmas to boost their sales. During the times of the year when sales are expected to decline, they further lower their rates. Acquisitions and mergers are common in the hotel industry. Smaller hotels doing well are acquired by larger chains and merged with them under the same brand name or as a subsidiary of the parent brand. Hotels also work on improving their facilities over time and the improvements are marketed. Price adjustments are also offered to early birds or when bookings are made for large groups (Booth, 2012). Hotels also pursue their regular customers and offer them specialized discounts to motivate them to use their services more often. Loyalty cards are also offered to develop loyal customers. These efforts help boost sales in existing markets.
Market Development
This takes place when existing products are launched in new markets. For hotels, the prime method of market development is to open new branches at new locations. These can be in the same city or country or can be in a new nation where there are no current locations. Establishing a new location takes time and funds. When such a new location opens, it is marketed to generate awareness. Various discounts are also offered to motivate consumers to stay at the hotel. Another strategy commonly used in the hotel industry is to offer rooms with more or fewer services than standard rooms. These are then offered at various prices to attract particular segments of the population. They are accordingly marketed as well. This allows the hotel industry to create new segments within existing markets. These help further enhance revenues.
Product Development
Product development is the act of promoting new products in existing markets. For the hotel industry, new products can be in the form of new services, new room layouts, the addition of luxury or low-cost rooms, and so on. In each case, the new product or service is based on market trends and consumer feedback. New services offered help improve the stay of the guests. The services already being offered are also improved to enhance the value offered to the guests. Additional amenities started by hotels also constitute new products in the hotel industry. Product development is also marketed to generate awareness in the target population. Product development is an important way for hotels to show their efforts to increase customer satisfaction.
Diversification
The hotel industry is already diversified to a great extent. They cook their food, do their laundry, have cleaners, and other services. They can also further diversify vertically by planting and growing various crops and animals for food purposes. They can also offer transport services. Similarly, they can also diversify into further related industries such as theme parks, lodges, resorts, motels, and so on. These similar ventures would be easier to operate based on the hotel experience. Unrelated diversification can also take place if a hotel enters into another industry such as textiles, apparel, sports, consumer electronics, and so on. They can use their brand name to gain further success.
References
BBC, 2007. Home suite home. [Online] Available at: http://news.bbc.co.uk/2/hi/uk_news/magazine/6990706.stm [Accessed 17 Jan. 2020].
Booth, D., 2012. Long Layover? Many Airport Hotels Offer Day-Room Rates. [Online] Available at: https://www.cnbc.com/id/100324884 [Accessed 20 Jan. 2020].