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Executive Summary

This report presents a business opportunity of Hyatt House Philadelphia/ King of Prussia based on the hotel situational analysis, opportunity and problem identification and propose solution.

The first part of the report starts with hotel background, mission vison and strategic goal analysis; the current targeting market, marketing situation and SWOT analysis of Hyatt House Philadelphia/King of Prussia.

 

1. Hotel Background

Hyatt House Philadelphia/King of Prussia is belongs to Hyatt Hotel Corporation. Hyatt Hotels Corporation is an American multinational hospitality company that manages and franchises luxury hotels, resorts, and vacation properties. The Hyatt Corporation came into being upon purchase of the Hyatt House, at Los Angeles International Airport, on September 27, 1957. As of March 25, 2018, Hyatt has 777 properties in 54 countries.[3] Fortune magazine ranked Hyatt #186 on its list of “America’s Best Employers” for 2018.[4] (Hyatt, 2018). In 1954, the first Hyatt house was a motel near Los Angeles International Airport, over the following 10 years, Hyatt became the fastest-growing hotel chain in the United States.

Hyatt House formerly known as Hyatt Summerfield Suites or Summerfield Suites by Wyndham and Hotel Sierra, properties are extended-stay residential hotels and smaller-to-mid-sized modern hotels in urban and suburban locations in the United States (Hyatt, 2018). Hyatt House Philadelphia/King of Prussia located in King of Prussia, with four integral section, included rooms, dining, events hold and area attractions.

Hotel highlights: There are mainly four highlights of the Hyatt House Philadelphia /King of Prussia. The first one is Hyatt house of Philadelphia/ King of Prussia area attraction. It is located at King of Prussia, not far from center city of Philadelphia, and also not far from the largest shopping mall of Northeast of the U.S.. Hyatt House Philadelphia/ King of Prussia is a family friendly hotel, which is closed to Elmwood Park Zoo; Longwood Garden; Competitive Edge Sports ; Arnold’s Family Fun Center; Chaddsford Winery, just a few miles away, guests can drive there at any time. For the local food and drink, Hyatt House Philadelphia/ King of Prussia must more attractive for the guests. There are four famous local restaurant could be choose by guests, which are named City Works; Creed’s Seafood and Steaks; Fogo de Chão Brazilian Steakhouse; Davio’s Northern Italian Steakhouse. Whether guests looking to relax, go shopping or explore King of Prussia for fun and adventurous things to do, their residential-inspired suites are the perfect destination for the guests getaway.

The second highlights of the hotel is discover smartly designed rooms and suites for extended stay in King of Prussia. There are 12 kind of types rooms for the hotel, guest can choose the rooms according to their needs. Whether guests visiting or in town for business, Hyatt house hotel will total make guest satisfaction with our spacious guest rooms and suits. Hyatt House Hotel with completely modern lifestyle amenities and contemporary décor. Unexpected luxury is everywhere, bringing guests more convenience. Guests can relax their body and mind in a luxurious Hyatt bed, or in an H BAR or indoor whirlpool. No matter how long guests stay with us, Hyatt House Philadelphia/ King of Prussia can enjoy Hyatt on-site laundry service and 24-hour exercise room.

 

There are 2 popular type of room below.

Grand Master:

Unwind in this 704-square-foot suite, with one king bedroom, a luxurious soaking tub, a living room, and a dining area. (Grand Master, 2018).

Amenities included: Hyatt Grand Bed™; Swiveling 42” flat-screen TV & 55” flat-screen TV; Hair dryer; Luxury bath amenities from Nourish Well; Minifridge; Microwave; Coffeemaker; Iron and ironing board. (Grand Master, 2018).

 

Accessible 1 King Master Suite Roll-in Shower

Enjoy the extra space in this one-bedroom suite, with one king bed, a living and dining area, and a roll-in shower, all set amid 704 square feet. (Accessible 1 King Master Suite Roll-in Shower , 2018)

Amenities: Emergency strobe light and strobe light smoke detector ; Cordless phone; Lower-level closet shelves, thermostat, and bathroom and entryway features; Wide bathroom doors

Grab bars; Hyatt Grand Bed™; Swiveling 42” flat-screen TV with closed-captioning; Luxury bath amenities from Nourish Well; Minifridge; Microwave; Coffeemaker; Iron and ironing board. (Accessible 1 King Master Suite Roll-in Shower , 2018).

The third highlight of Hyatt House Philadelphia/King of Prussia is dinning. The hotel offers two free breakfast options, alternate daily chef style options, or your own Omelet bar custom creations. No matter guests pick, Hyatt House Philadelphia/ King of Prussia will have a plate full of ingredients like cage-free eggs, all natural bacon and sausage, and natural fresh fruits. The social space H BAR offers exquisite craft cocktails and BAR snacks. Party with friends and share a plate of thick Korean street tortillas made of high-quality ingredients. It’s just one of many cool apps we found on the Sip + Snack menu. Small shelves and grocery stores line the shelves in Hyatt’s 24-hour H market. Snap up groceries to take back to your room’s kitchen, or get sandwiches and cold drinks before go to downtown.

The last highlights of Hyatt House Philadelphia/ King of Prussia is events. Hyatt House Philadelphia/King of Prussia bring people together in a special way. The hotel with more than 3,000 square feet of flexible meeting space, including the Founders ballroom, people can hold weddings and meetings at Hyatt House Philadelphia/ King of Prussia. The meeting room is outstanding venue and high-tech spaces for corporate and executive meetings, training classes, group gatherings, and social events in King of Prussia (special events, 2018). The Hyatt House Hotel offer all-inclusive meeting package with unique food and beverage and A/V equipment. Also, Hyatt House Philadelphia/King of Prussia is the smart place for your wedding guests. The comfortable suite has a fully equipped kitchen, an independent living and sleeping area and free high-speed Internet access, making friends and family outside the city feel at home.

 

2. Mission Vision and Strategic Goal Analysis

At Hyatt Hotels Corporation, our mission is to provide authentic hospitality by making a

 

difference in the lives of the people we touch every day. In keeping with this mission, we

respect fundamental human rights, as embodied in the Universal Declaration of Human Rights. We believe that we have a responsibility to manage our business in a manner that is consistent with fundamental human rights and we attempt to foster similar ideals in those with whom we do business. This commitment is aligned with our company core values and is supported by both our Code of Business Conduct and Ethics and our diversity and inclusion strategy. (Hoplamazian, 2010). The aim of the hotel is to ensure customer satisfaction and customer retention of 24-hour gyms, business centers, pet-friendly services and indoor swimming pools are testament to the mission statement. Hyatt House Philadelphia/ King of Prussia focus on be the most popular brand in every customer group Hyatt House Philadelphia/ King of Prussia serve for employees, guests and owners. The hotel’s mission, goals and values are interdependent, and Hyatt House Philadelphia/ King of Prussia call this interdependence the “Hyatt value chain.” Hyatt’s value chain starts with their employees. Hyatt House Philadelphia/ King of Prussia believe that their efforts to involve our employees in planning how best to serve colleagues, guests and owners will contribute to their commitment to real service, which is the first step towards achieving high levels of customer satisfaction.

In the hotel’s view, motivating employees to personally participate in service and demonstrating loyalty to guests is key to achieving our mission. Hyatt House Philadelphia/ King of Prussia rely on the management team of each managed property to lead by example and provide them with appropriate autonomy to make operational decisions based on the best interests of the hotel and brand. High levels of customer satisfaction lead to increased customer preference for their brand, which Hyatt House Philadelphia/ King of Prussia believe increases the revenue base in the long run. Hyatt House Philadelphia/ King of Prussia also believe that hired employees will improve the effective operation of their properties, thereby improving the financial performance of the owners.

 

Current Target Market

It serves customers in retail as well as the corporate segment. Incorporate segment its customers range from national and international companies organizing conferences, foreign nationals, Government organizations, corporate tie-u with the companies and so on.

In the retail segment, the customers are in the upper middle and upper-income class group who are majorly in the age group of 30-55 years. These customers are rich affluent and have unstated, potential and augmented needs which Hyatt caters to make them repeat customers. (Bhasin 2016)

For its select service category, Hyatt targets its customers by suggesting they shouldn’t settle. The campaign for Hyatt Place and Hyatt House has recently centered around the concept of “You’ve come too far to settle now.” The target customer is very ambitious, productive and often a multitasker. The campaign itself has featured stories of people who do not settle. (Steimer, 2016)

Aiming for younger business and pleasure travelers, Hyatt hotels are about lifestyle, not loyalty points. Hyatt’s moves have come as all major hotel chains are in the process of updating the way they relate to more digital consumers with “on-demand” and social appetites. Hyatt has been experimenting with the Facebook Messenger platform’s “Businesses on Messenger” feature as a way to connect with Hyatt’s digitally native guests on a “deeper level.” (Kaplan, 2016)

Current Market- According to the Tripadvisor website (Tripadvisor, 2018), there are total 959 guest reviews of Hyatt House Philadelphia/King of Prussia and only 226 of them are business travelers. The rest travelers are friends, couple, solos and families. This means the current market of the hotel is mostly leisure travelers. Furthermore, of all reviews, English reviews has the highest number of 882, followed by French (5), German (5), Dutch (4), Portuguese (4), Spanish (2) and Swedish (1).

From the guest review language, it shows that most of the customers of Hyatt House Philadelphia/King of Prussia are from English speaking countries including domestic customers. Total 21 reviews are from the countries that do not speak English, with the greatest concentration in Europe and none in Asia. Generally, Hyatt House Philadelphia/King of Prussia’s current market is focused on domestic, North America and Europe and not so much on the Asia market. (Tripadvisor, 2018)

 

4. Macro Environment Analysis

4.1 Economic Factors

Tax reform, job growth and Airbnb all play a role in how the hotel industry will fare in 2018. While travel figures are up and the economy is strong overall, rising interest rates and uncertainty out of Washington, DC, present potential headwinds for the sector next year, and owners and operators need to focus on the ways their properties excel over short-term rentals.

International currencies have strengthened in comparison to the dollar, making the US an increasingly attractive travel destination. In turn, we’ve seen an increase in tourism, and we expect occupancy to peak in 2018 at approximately 72.6% nationally—a historic high. That said, we are still seeing some room-supply concerns in markets such as New York; Charlotte, NC; Seattle; and Denver, and the development pipeline shows that we are likely to see an 8% surge in national supply by 2020.

In coming years, the marketplace is expected to digest the new supply, with occupancy easing to the low 70% range. However, this should not be cause for alarm. America has a historically high level of occupancy, and these slightly depressed figures are actually quite healthy. In the medium term, national occupancy will likely settle around 68% to 69%.

What’s most important to note is that global investors are still seeing great opportunity and safety in US real estate, with hospitality being one of the major investment sectors.

The hospitality sector has always been the bellwether of the economy—hotels go into economic cycles first and emerge from them first. As mentioned, 2018 looks like it will be a peak for the lodging industry, but as long as certain factors hold, we should enjoy a period of equilibrium following this peak. Economic factors that benefit the hotel sector include near-record-low unemployment, strong job growth and increased labor-force participation, as well as continued Baby-Boomer and Millennial travel spends.

Tax reform, if it occurs, would be a big boom to the hotel industry since more disposable income in Americans’ pockets will lead to more travel and hotel stays. Furthermore, lower taxes for hotel owners will spur new development and new employment opportunities, completing the cycle.

On the regulatory front, local governments around the country are getting smart about regulating short-term rentals, which the industry has termed “illegal hotels.” For instance, in Southern California and in other major cities around the country, municipal governments now understand that short-term rentals are causing substantial impacts to tax revenue and are implementing policies to address this. (Rossenfeld, 2017)

 

Unfavorable Supply Vs. Demand Dynamics

The post-election economic bump means corporate transient demand growth is expected to increase more than previously thought in 2017. However, that won’t stave off the imbalance between supply growth and demand growth. For the first time in five years, supply growth, at 2 percent, is expected to overtake demand growth, at 1.7 percent, according to STR. As such, STR expects occupancy to dip 0.3 percent, pressuring hoteliers to raise rates in order to achieve RevPAR growth.

 

Short-Term Rentals

There’s some mixed messaging in the hotel industry about whether Airbnb impacts hoteliers’ ability to raise rates. A recent Morgan Stanley Research report linked Airbnb supply to fewer U.S. hotel compression nights in 2016, a pattern that could reduce hotel profits in the long term. However, an STR study of 13 markets found that Airbnb had little real impact on compression nights.

 

Rising Operating Costs

The costs required to run a hotel have climbed since 2014, which means that operators that need to compete on price with other suppliers risk eating into profits.

U.S. hotel expenses grew 3.5 percent in 2013 and then 4.8 percent in 2014, according to CBRE. In 2016, expenses grew 4.1 percent, and they’re projected to grow 3.9 percent this year.

The largest single expense at a hotel—and the one that’s been driving much of the rise in overall operating expenses—is labor, which represents 45 percent of expenses. During the industry’s recovery period from 2010 to 2015, the cost to companies of employee benefits rose more rapidly than salary and wages. In the past two years, however, that dynamic has flipped due to government pressure in states like Washington and California to increase the minimum wage. The higher national employment rate also has forced hotels to compete for talent by paying more.

Property taxes, too, are perceived to be on the rise as municipalities are trying to find additional revenue sources. (Sickel, 2017)

This statistic shows the total contribution of travel and tourism to GDP in the United States from 2008 to 2028, including direct, indirect and induced contributions. Travel and tourism was forecasted to make a total contribution of approximately 2.4 trillion U.S. dollars to the U.S. economy in 2028. (Statista, 2018)

Figure 1: Contribution of travel and tourism to GDP in the United States from 2008 to 2028 (in trillion U.S. dollars)

 

Source: Statista

4.2 Demographic Factors

The top 25 hotel markets in the U.S. had an average occupancy growth of 5 percent in 2014, as the industry proved it is just about fully recovered from the devastating impact of the recession. U.S. cities with improving job and housing markets are doing best of all.

Greg LaBerge, vice president and national director with Marcus & Millichap’s national hospitality group, says New York City, Miami and San Francisco are all in high demand among investors, both by the number of visitors that stay in the rooms and by the number of foreign investors who want to buy properties with attractive long-term ROIs. The main factors driving strong activity in the hospitality sector today include strong demographic growth and high barriers to entry, he says. In New York City, for example, the recent addition of hundreds of hotel rooms has liberated demand that was not previously served. Occupancy in the market ticked up last year, despite a hefty 5.5 percent rise in available rooms.

While New York City has the most construction going on today by a very wide margin, it’s actually number two in terms of rooms being built per existing inventory. J.P. Ford, a senior vice president of business development with the Portsmouth, N.H.-based Lodging Econometrics, says Austin, Texas has the most development per existing inventory at 29.1 percent, with 61 projects and 9,057 rooms. New York City is at 28.5 percent, with 188 hotels in the construction pipeline. Miami is at 23.9 percent, with 64 projects and 12,036 rooms underway.

New York still dominates the country’s hotel market for room stay, with the highest average occupancy rate at 85 percent for the past two years, and an average daily rate (ADR) of $263.45, according to a recent report from commercial real estate services firm JLL. The city saw almost $4 billion in hotel transactions last year, and could hit $6 billion this year, JLL researchers said. Foreign investors accounted for more than half of the 2014 total, with firms such as Hong Kong-based Seng Group buying the Sofitel New York and the SpringHill Suites New York Midtown. Chinese investors made up the bulk of the buying in New York City, and a Middle Eastern firm acquired the Residence Inn World Trade Center.

Gilda Perez-Alvarado, executive vice president with JLL, says investors across the globe are ready to compete for New York hotels of all types.

In addition to irreplaceable trophy assets, off-shore investors are also targeting value-add opportunities, as well as highly efficient mid-market properties with strong going-in yields.

South Florida has seen about $2.3 billion in hotel transactions in the past 36 months, according to JLL, including the $278 million acquisition of the James Royal Palm. In March, KSL Capital Partners sold the 393-key hotel to Chesapeake Lodging Trust. The Miami market is benefitting from a strong demand for resort-themed hotels.

San Francisco’s hotel market is also doing quite well with occupancy, hitting the 90 percent mark twice in 2014. While the market is smaller than others, it’s the higher growth market right now, he says, with more than 20 percent growth in occupancy since 2008 and more than 32 percent growth in ADR. Again, the main factor has been population growth, and San Francisco has been at the top of the country for demand of all factors. (Carr, 2015)

This statistic shows the quarterly average daily rate of hotels in Philadelphia in 2016 and 2017. In the first quarter of 2017, the average daily rate of hotels in Philadelphia in the United States was 169 U.S. dollars.

Figure 2: Quarterly average daily rate of hotels in Philadelphia in 2016 and 2017 (in U.S. dollars)

 

Source: Statista

From the central East Coast location to the one-of-a-kind U.S. history to its status as the sixth-largest city in the nation, Philadelphia delivers so much more than most people expect.

Philadelphia Facts and Figures: By the Numbers

• 1st World Heritage City in the United States

• 2nd largest city on the East Coast

• 3rd most populous downtown in the country

• 6th largest city in the country (city population: 1.6 million and regional population: 6.1 million)

• 6th largest workforce in the U.S. of just over 3 million, including highly skilled talent in key industries: life sciences, energy and manufacturing, technology, financial services, and more.

• 45 million people live within 200 miles — putting Philadelphia at the core of the country’s wealthiest and most-densely populated area.

• 39 hotel brands in Center City

• 3rd largest Chinatown in the U.S.

• 6,109 hotel rooms within a four-minute walk of the Pennsylvania Convention Center

• 9,863 hotel rooms within a 10-minute walk of the Pennsylvania Convention Center

• 11,460 hotel rooms within a 15-minute walk of the Pennsylvania Convention Center

• Over 12,000 hotel rooms in Center City

• Over 16,000 hotel rooms in Philadelphia County

• Over 37,000 hotel rooms in the region

• 1,049 retailers in Center City

• Over 1,000 food establishments with 428 outdoor seating locations in Center City

• 29 airlines offering 500 departures to 130 non-stop destinations in the U.S. and around the world (36 international destinations)

• 16th largest city in the nation for international visitors from overseas

• 60% of the U.S. population lives within a two-hour flight of Philadelphia

• Strategically located between New York (1 hour 20 minutes) and Washington DC. (1 hour 45 minutes) on Amtrak’s Acela Express

 

Vibrant Street Life

• Travel + Leisure rated Philadelphia as No. 1 city for culture.

• No. 1 “Most Exciting Place to See in the U.S. in 2016,” by Lonely Planet.

• Bon Appetit ranked Philadelphia as “One of America’s Greatest Eating Cities.”

• One of 25 Incredible Destinations from Across the Globe, according to Fodor Travel’s Go List 2016.

• Consistently cited as one of the most walkable cities in the U.S.

Accessible + Friendly

• U.S. News ranked Philadelphia in the top 15 Best Affordable U.S. Destinations.

• Millennials are growing at a faster rate than in any of the nation’s 30 largest cities, according to JLL.

• Travel + Leisure Magazine ranked Philadelphia’s as one of the best U.S. cities for a romantic urban honeymoon.

• Philadelphia, a Greek word, literally means City of Brotherly Love.

• Philadelphia is well-known for its rich LGBT history, and the Gayborhood. LGBT events such as Equality Forum, Pride Day and Out Fest happen annually. (DiscoverPhl, 2018)

 

4.3 Political Factors

Although Philadelphia was tabbed by Lonely Planet back in February 2016 as the best travel destination in the United States, it takes more than tourism to sustain a hotel market. What really provides the strength is what happens between the weekends and summers that are busy for everyone. Philadelphia has really benefited from a growth in the city’s convention calendar, more predictable corporate demand, and the increased value of its arts and dining culture. (Rothstein, 2016)

That combination has resulted in the city having a breakout year in hotel demand. In other words, the more reasons large groups and businesses have to visit a city—conventions, trade shows, other businesses’ HQs—the more consistent that city’s hotel revenue will be. Consistency is key, because it allows hoteliers to predict demand, and adjust their pricing to maximize their revenue. The country’s most competitive hotel markets—Boston, Washington, DC, San Francisco and Los Angeles, —demonstrate that sort of diversity and consistency that makes investing in and purchasing hotels appealing. Diverse demand generators and high barriers to entry for building new hotel supply as strengths for existing hotels. (Rothstein, 2016)

For investment, that high barrier to entry is crucial, because an influx of too many available rooms into one market depresses revenue in the short term, as new hotels often drop their rates to stabilize their consumer base. HHM It’s why Philly, which is having an exceptionally strong year thanks in part to the Democratic National Convention, is finding success despite often being characterized as a “thin” market dependent on leisure tourism. (Rothstein, 2016)

Although the DNC was a massive boon to Philly’s hotel industry, it’s necessarily a one-time increase that doesn’t portend much in the way of long-term trends. It’s hard to estimate the impact going forward, but pulling off such an event can give a city a lot of credibility. As it stands, Philadelphia’s profile is rising in the business world. (Rothstein, 2016)

The Lonely Planet ranking certainly helped boost the city’s national profile, but, again, it’s what lies beyond the tourism aspect that truly bodes well for Philadelphia’s hospitality future—the same factors that have driven the city’s boom in multifamily development. Beyond the hotel market, Philadelphia has grown from being a city of American history, Rocky and cheesesteaks to become an arts, food and beverage scene. The diversity of residential and the growth in value for residential and retail in Philadelphia has really helped raise the brand of the city. (Rothstein, 2016)

However, the concern remains that if too much hotel space is added in anticipation, it could soften the market considerably. In the next year, Philadelphia should see an additional 900 or so hotel rooms added. In fact, Philadelphia’s growth in supply is a little behind the national trend, which is heading in the wrong direction. (Rothstein, 2016)

Demand continues to grow, but since we’re in the later part of the cycle, where the supply is picking up, it’s outpacing the demand.” Homewood Suites The changes to Philly’s landscape that makes the city a more appealing destination can be further leveraged by hotels to separate themselves from each other—to create the connection to the neighborhood that has become Airbnb’s big selling point. (Rothstein, 2016)

Foreign travelers are still coming into the country at consistent rates, but their pricing power and spending are down in certain markets because our customers’ cost of travel has effectively gone up due to changing currency rates. The declining value of international tourism to the hotel industry only underlines the need for Philadelphia to be more than just a tourist destination. As the city’s economic profile grows, its hotel industry is poised to capitalize.(Rothstein, 2016)

Philadelphia is a city on the rise, and its hotels are proof. In the first half of 2018, hotels in the City of Brotherly Love earned $332.2M at an occupancy rate of 79.5%, both modern-day records, the Philadelphia Business Journal reports. Hospitality research firm STR’s numbers, cited by the Philadelphia Convention & Visitors Bureau, show the first half of 2018 eclipsed the previous year by 102,000 room bookings. (Rothstein, 2018)

The underlying numbers are just as positive. Average daily rates were up 4.5% over the first half of 2017, and Saturday night occupancy — which is a metric of leisure travel success — was a record 91.6% with an ADR of $191, the PBJ reports. Developers are fully aware of the success of the hotel market, particularly in Center City. More than 2,000 rooms are set to deliver by the end of the decade, and nine new hotels are under construction to open in the next 18 months, including the city’s first microhotel at 19th and Ludlow streets. (Rothstein, 2018)

 

4.4 Technological Factors

Robot concierges, cloud computing, mobile check-in: In today’s competitive marketplace, hotels are increasingly turning toward cutting-edge technology solutions to attract customers, enhance guest experiences and streamline hotel operations. Below are the top technological factors influencing the hotel industry in America:

 

Getting personal

Hoteliers are relying on technology and predictive analytics to collect and leverage data in order to create those personalized experiences today’s travelers crave. A study by MCD Partners showed that 74 percent of travelers would let hotels use their personal data to make their stay better. Hotel owners now have the ability to create detailed guest profiles. And they’re using that information to improve customer satisfaction, promote loyalty and encourage repeat visits. For example, by reviewing historic guest behavior, hotel operators can make customers feel special by pre-stocking a room’s minibar with favorite beverages, or including extra towels based on preferences from a previous stay. (Amadeus, 2018)

And the Internet of Things (IoT) is taking personalization even further, implementing smart home technology into hotel rooms to make guests feel more comfortable. Hotels are beginning to offer the ability to control room temperature and lighting, even allowing guests to upload their own artwork and photographs to display on their hotel room walls. (Amadeus, 2018)

 

Open & integrated

In the past, integrations between hospitality technology providers were expensive and time consuming. Today’s hotels require open-platform solutions. Software products that seamlessly integrate with third-party systems, allowing communication to flow easily between property management, customer relationship, and revenue management systems, as well as guest-facing technology. With the rapid pace of change in the hotel technology sector, in order to future-proof your business and inspire your guests it’s crucial to be connected to an ecosystem of products that continuously adapts to modern requirements. (Amadeus, 2018)

 

Clouds on the horizon

By 2020, Cisco predicts that 92 percent of workloads will be processed by cloud data centers rather than traditional ones. The cloud contains limitless stores of information, and improves productivity by offering the ability to access that information from anywhere at any time. Cloud computing also reduces operational costs, eliminating a hotel’s need for excessive hardware. The cloud offers a beneficial security aspect as well. Because information is stored remotely and securely, the cloud reduces chances that critical data is lost in a network crash or national disaster. (Amadeus, 2018)

 

Getting more mobile

A study by Cornell’s Center for Hospitality Research showed that for guests from the U.S., even a five-minute wait led to a 47 percent decrease in customer satisfaction. Today’s travelers prefer to skip waiting in line at the lobby, choosing instead to use their mobile phones for self check-in and checkout. Hotels that implement mobile check-in/checkout not only makes guests happier, but improve operations as well. They can more quickly determine room availability, and optimize room revenue by offering lucrative upsells, like early check-in and/or late checkout for additional fees. (Amadeus, 2018)

 

The age of ML, AI & robots is here

With several hotels already beta testing voice-activation systems, such as Amazon’s Echo, it’s clear that the age of machine learning (ML) and artificial intelligence (AI) is here. These two forms of technology make hotel operations more efficient, and allow hoteliers to deliver better service by handling tasks that normally require human intelligence.

AI is particularly effective when it comes to text messaging and online chat services. AI chatbots work around the clock, offering the ability to instantly respond to guest requests. The Hilton’s robot Concierge, Connie, provides a great example of how ML and AI work for in-person customer service as well. Connie provides destination information for guests, appropriately adapting her replies as she learns from each human interaction. (Amadeus, 2018)

 

Mobile device as door key

It’s fascinating that a function as simple as a door key could undergo so much evolution. But the tool that once started as a carefully shaped piece of metal quickly turned into electronic key cards, and is set to shed its physical form altogether. The next evolution of the hotel key transforms it into data on a guest’s mobile device. Some hotels have already starting using implementing this, whether it involves NFC technology or visually scanning a code like many airports now do with plane tickets. (Mitel, 2018)

 

Service automation

Self-serve is in. Today, many guests prefer technology over human interaction for simple tasks. Remote check-in and check-out options are becoming popular, and some hotels are beginning to work with apps that let guests order room service right from their mobile devices. There’s a whole range of basic guest requests that can be automated with the right technology, which frees hotel staff up for other activities that enhance the guest experience. And the trend is only going to accelerate. (Mitel, 2018)

 

Fixed-mobile convergence

Once upon a time, people used their room phones. However, the pervasiveness of mobile devices has relegated the conventional room phone to a vastly reduced role. But that doesn’t mean it doesn’t have a role moving forward. The room phone of the future may serve as a hub for a larger connected experience. (Mitel, 2018)

 

Guest apps

The vision of the connected guest entails nearly every aspect of the guest experience. Something as complex as that needs a single hub from which to operate—and guest apps for personal mobile devices are the natural place to host all of these functions. A smartly designed guest app combines everything from deal notifications to hotel services to loyalty programs.

Most major hotels have some element of this picture in play already, and they’re adding capabilities every day. Some of the major flags are closer, but much of the technology and integration is still in development. Regardless of who gets there first, one thing is certain—the hotel with a truly connected experience will be full of very happy, and very empowered guests. (Mitel, 2018)

 

Location-based services

Much of this technology is in its infancy, but the implications are huge. Being able to understand where hotel staff and guests are located at any given time creates all kinds of opportunities to improve the guest experience—from being able to deliver services to guests while freeing them from their rooms to helping event staff operate more efficiently to turning over rooms more quickly and beyond. Some employee location-based features are already available using SIP-DECT, but this is just the beginning. This is a category to keep an eye on. (Mitel, 2018)

 

Tech lounges

Airline check-ins. Local info guides. A place where guests can get out of their rooms but still access Wi-Fi to relax or get work done. The use cases for technology in hospitality seem to grow every year, and savvy hospitality businesses are transforming these guest desires into stylish semi-public spaces where guests can engage tech on their terms. Many guests are even beginning to include these kinds of technologies in their online hotel search criteria, so hospitality businesses that lack them may eventually find themselves at a disadvantage. (Mitel, 2018)

 

Tech-enabled meeting spaces

The modern meeting space has evolved. No longer is it about tables and chairs and nice serving carts. Modern meetings run on technology. Business people need to make multimedia presentations and videoconference remote attendees—sometimes both simultaneously.

And for the marathon meetings, they’d like access to services like catering with minimal interruptions. Most of all, smart hotels know they need these spaces to be as user-friendly as possible. The A/V rooms of the past that required dedicated engineers are no longer an option. (Mitel, 2018)

 

Social listening

Guests have a lot to say about their experiences at hotels, but they don’t always say it directly to the hotel. And in a hospitality world where word of mouth and online reviews have more influence every day, it’s one of the reasons that more and more hotels have started investing in social listening tools. These tools allow hotels to find out about guests’ wants, needs, desires, complaints and more—and jump into the conversation if it makes sense. Some even let you keep an eye on the competition. The Internet is treasure trove of business intelligence if you know how to look. (Mitel, 2018)

Mobile-optimized booking pages

“Mobile” was a term we saw a lot while researching this article (especially “mobile keycards”). But the most urgent mobile-related hotel technology trend to adapt to would be a mobile-optimized booking funnel. (Trivago, 2018)

Hyperconnected hotel rooms

 

Hotel room renovations are no longer primarily about design. A hotel room update this year could instead mean adding anything from never-fail high-speed Internet to mobile keycard accessibility, smart beds, in-room tablets, and more Internet-of-things innovations. (Trivago, 2018)

 

Virtual concierge

As the traditional concierge starts to shift to the role of expert filter, hotels are leveraging technology to enable their guests to get a more personalized stay without exhausting staff resources. With a virtual concierge, guests can do everything from making dinner reservations to requesting more pillows on a phone app or in-room device. (Trivago, 2018)

 

Instant check-in and check-out

It’s not that hotel guests appreciate this hotel tech trend; it’s that they’ve come to expect it. It could explain why hotels are increasingly using cloud-based property management systems to quickly process one-click check-ins and check-outs. (Trivago, 2018)

 

Virtual reality

Novelty is now one of the most sought-after components of the guest experience. To deliver it, some hotels have introduced a virtual reality experience into their range of services. (Trivago, 2018)

Blockchain

We’re still hearing that blockchain technology has the power to revolutionize the hospitality industry, from payments to loyalty programs, supply chain management, and more. (Trivago, 2018)

 

4.5 Competitive Factors

Over the next 10 years the biggest competitive challenges in travel and hospitality will not come from other airlines, travel, hotel or leisure companies, but from indirect competition. (PACE, 2017)

These indirect competitors are “new market makers” who aggregate global demand and leverage market power to capture revenue and profit from incumbent players. The challengers include online retailers (Expedia, Priceline), media companies (Google, Trivago, Kayak), hotel and lodging companies (Airbnb) and food delivery services (Deliveroo, Grubhub). (PACE, 2017)

Digital technology is enabling new business models and ways of working. Existing brands urgently need to examine their businesses end to end and reinvent themselves in order to compete successfully in the future. (PACE, 2017)

Those that execute well and move with speed can leverage their existing strengths and scale and transform their businesses for the next phases of growth. Those that don’t will struggle to survive over time. (PACE, 2017)

The competition in the hospitality industry is a result of two aspects:

• Technological adaptation

• Changing customer profile

Technological Adaptation

In particular, three particular trends are going to reshape the hospitality industry in the coming years.

A Mobile-First Approach

In emerging markets around the world, 1 billion people are expected to come online globally. Most of these will be customers who will experience their entire guest lifecycle on their smartphones. Hospitality and travel companies have no choice but to invest in mobile friendly and mobile-first guest engagement and retention strategies. (Gumpta, 2018)

In any case, customers are always looking for that ‘personalized’ experience and leveraging innovative mobile tech the way AirBnb and Uber have will be key when it comes to brand differentiation and experience. Hotels will have to offer booking functionalities, lightning fast operations, and other touchpoints for the entire customer journey on mobile phones for the convenience of their clients. (Gumpta, 2018)

 

Connectivity

With internet access becoming nearly limitless to digital natives and non-natives alike, connectivity is only poised to increase. Besides, with the proliferation of connected devices and wearables in the market, hotels will have to get innovative when it comes to new ways of interacting and engaging with the consumer. Virtual reality tours, augmented reality interactions, robotics, and AI will drive the market and poise it for yet other travel experiences that can be vicariously delivered. (Gumpta, 2018)

Machine Learning, Big Data and Analytics

Tapping into big data allows for the creation and curation of an extensively personalized experience for every type of consumer. A lot of marketing campaigns can be leveraged seamlessly, and monitored keeping tangible numbers in mind for growth and further optimization. (Gumpta, 2018)

It also speeds up existing processes like customer service, feedback collection, email automation, and customer engagement. Furthermore, it can also facilitate upscaling and downsizing the business according to company goals. (Gumpta, 2018)

Changing customer profiles and brand experience

The tourism industry is witnessing a change in the psychographic and demographic profiles of travelers. Along with Gen X travelers, there’s a fresh influx of millennials, whose expectations and lifestyle are setting completely different standards for industry performance. (Gumpta, 2018)

Customer experience is currently the most dominant brand differentiator. It will also drive customer loyalty and referrals and hotels will be needed to synthesize more targeted, personalized, and intricate loyalty schemes than ever before. (Gumpta, 2018)

This personalization and differentiation also extends to the kinds of experiences that you create. The ‘home away from home’ concept does away with the homogenization of luxury, which was the tried and tested paradigm earlier.

Now, to provide unmatched service, rooting the hotel in its local climate while also giving experiences beyond the conventional hotel space, has become an important factor. The millennial demand for organic food and sustainable options also creates more vulnerabilities when it comes to risks and food safety, which needs to be monitored by hotel owners. (Gumpta, 2018)

 

4.6 Trends in the Industry

1. Catering to millennials

Millennials (those ages 18-34) are expected to represent 50% of all travelers to the USA by 2025, according to the Cornell Center for Hospitality Research. Companies need to define their strategies based on this demographic group’s personality traits and habits—they travel a lot; are early adopters of technology; like personalized interactions and are spontaneous. Hotels will want to please them with easy check-in and gourmet dining experiences at reasonable prices. In return, satisfied millennials will actively promote their businesses on social media channels.

Travelers of all ages seem to enjoy easy check-in and gourmet dining at reasonable prices. A 2018 Future of U.S. Millennial Travel report based on a Resonance Consultancy survey of U.S. 20 to 36-year-olds found that 85 percent put a priority on venturing out of their comfort zones and learning new things. That ranked right behind dining (91 percent) and fun attractions (90 percent). (SmartMeetings, 2018)

 

2. Tech explosion

The majority of guests today are self-sufficient, tech-savvy travelers who are comfortable using apps or mobile websites. Hotels need to make sure their offerings are up-to-date and user-friendly. At business meetings and conferences, travelers expect hotels and conference centers to have high quality tech equipment and a knowledgeable support staff. (SmartMeetings, 2018)

In the meeting room, planners are leveraging cloud-based digital registration and event app tools to deliver greener, more personalized experiences. From chat to VR and AR, tech has gone from gee-whiz to must-have as a tool to understand attendee preferences. (SmartMeetings, 2018)

3. Influx of international visitors

International leisure travel is on the rise—Dubai International Airport has become the busiest airport in the world. Hotels must be able to provide services in a multitude of languages, and tailored experiences properly suited to the culture and unique needs of their international visitors. (SmartMeetings, 2018)

U.S. Travel Association has warned that the U.S. is not keeping pace with global long-haul travel expansion. In the United States, international inbound travel is expected to continue to grow at a rate of 2.2 percent while the same traffic worldwide is estimated at 6 percent. (SmartMeetings, 2018)

 

4. Increased emphasis on health and well-being

Guests today are taking charge of their health; hotels are responding with well-equipped fitness centers, pools and spas. Increasingly, travelers are expecting innovative wellness options. In addition to healthy food options, growing trends include lighting that energizes, air purification, yoga spaces, in-room exercise equipment and even vitamin-infused shower water. (SmartMeetings, 2018)

Wellness tourism is estimated as a $563 billion industry. From MGM Resorts and Wyndham Hotels and Resorts’ Stay Well rooms to Pullman’s focus on sleep, food, sport and spa, and Hilton’s Five Fee to Fitness program that puts the capability of a gym in the guest room, the hospitality industry has made it easier to stay healthy on the road. (SmartMeetings, 2018)

5. Need for seamless technology

Seamless connectivity across platforms and devices is growing more important. Many hotel groups are offering mobile check-in and digital concierge services. At Aria Resort and Casino in Las Vegas, guests are issued high-tech cards that detect their presence and unlock the door before they even reach it. (SmartMeetings, 2018)

Everything is smart these days. Smart rooms, smart badges and smart phones are all connected to share information and make getting what you want when you want it easier than ever. Look for facial recognition to unlock clickless access to just about everything. (SmartMeetings, 2018)

 

6. Sustainability rules

Eco-friendly practices are becoming the norm, as properties focus on renewable energy resources and water scarcity. Many hotels are installing solar panels and updating systems so that air conditioners and lights automatically switch off when guests leave their rooms. (SmartMeetings, 2018)

Considering the environmental impact of everything from plastic straws to leftovers has become an essential part of an event professional’s job. Venues are making it easier than ever to track food chains, reduce waste and minimize greenhouse gas footprints. (SmartMeetings, 2018)

7. New roles for staff

Many travelers seem to prefer technology to human beings—they want to check-in digitally and don’t mind if a robot delivers room service. This will give staff the opportunity to focus on more personalized service, as opposed to rote tasks. (SmartMeetings, 2018)

A quick search for hospitality jobs includes the titles such as social media coordinator, creative lead, events and experiences, audio-visual technician and yoga instructor. To qualify for these more specific roles, many are opting to pursue industry certification. (SmartMeetings, 2018)

8. Destination promotion

The explosion of social media is causing hotels to become more involved in destination and self-promotion. Many are featuring guests’ images and tweets on their websites; some are even using the material in their advertising campaigns. (SmartMeetings, 2018)

The #Hotelfie, augmented reality ads and room service virtual reality goggles are now “things.” Planners can visualize spaces in multiple destinations without leaving their computer. (SmartMeetings, 2018)

9. Real-time damage control

If a hotel guest is dissatisfied, he or she can easily complain on Facebook, Twitter, Yelp or TripAdvisior. Hoteliers must be able to quickly respond. Engaging with customers and responding to their needs through these public forums help maintain positive guest relations and drive future bookings. (SmartMeetings, 2018)

 

10. Unique perks

With so many brands to choose from, properties need to find a way to stand out. Some are offering free daily wine tastings in their lobbies or bars; some are incorporating sophisticated informational screens in bathroom mirrors; and others are giving away curated set lists of downloadable music. (SmartMeetings, 2018)

This is the year of the public living room as hospitality properties scramble to create comfortable spaces for informal gatherings in lobbies, restaurants and entries. (SmartMeetings, 2018)

 

5. SWOT Analysis of Hyatt House Philadelphia

The following things to see the internal strength and weaknesses of our organization and the opportunities and threats facing the company in our external environment.

Organizational strengths must be set in order to make the most of the peripheral opportunities as they occur, and emergency plans should be formulated in such an order that helps us deal with threats presented by the external environment.

 

Strengths

• Strategy: well differentiated approach used in the hotel’s marketing strategy.

• Structure: The hotel has beautiful and well-designed infrastructure, well organized, decentralized construction.

• Skills: assorted choice of service skills within organization and employees.

• Style: hard-hitting, participative environment.

• Staff: highly valued enthusiastic and talented personnel that are aggravated and extremely proficient. A well competent team who are proud of their hotel and respect the brand values are part of the organization.

• Shared Values: understandable and well communicated and organized values.

• Brand Strength: All brand values, beliefs and norms well represented bring into existence of brand loyalty between all the guests of the organization

• Reputation: a strong status is build up in the external and internal competitive market

• Food and beverage, banquet facilities

• Collaboration with top corporate organizations

• Technology upgrades from time to time

• Hygiene standards and customer experience

• One of the most popular hotel chain brands

 

Weaknesses

• Strategy: All the strategies should be well communicated between internal and external market

• Systems: recognized systems result from the feature angled work and circumstances.

• Interdepartmental interaction could be enhanced

• Staff: constant training is very essential among the internal staff. Each internal employee should be well informed and educated of the new and upcoming policies

• Facilities: certain rooms require restoration and upgrade technical

 

Opportunities

• Market: Returning growth rate.

• Competitors: As per now there is no much competitor for Hyatt House in five star hotel properties.

• Suppliers: well-built and long term relationship is build up with suppliers

• Guest Reliance: replicate corporate business based on personal service and excellence

• The environment for Tourism and Hospitality in the U.S. is friendly.

• There is opportunity for technological advancement in the industry.

• Opportunity for collaboration with P2P platforms in receiving tourists in America.

• Social media micro influencers increase the demand for hotels via their social media platforms.

 

Threats

• Market Entry: It is very likely that the competitive and global brand can come up with the similar product and service line.

• Substitutes: Numerous comparable services and standards can be emerged and offered in low rates

• Economy: coming back to the same level of performance and offer value standards due to recession may take bit more time.

 

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Retrieved from Statista: https://www.statista.com/statistics/292518/contribution-of-travel-and-tourism-to-gdp-in-us-time-series/ Hyatt. (2018, October 10th). Retrieved from Wikipedia: https://en.wikipedia.org/wiki/Hyatt#cite_note-3 Hyatt Hotels SWOT Analysis / Matrix. (n.d.). Retrieved from fernfortuniversity: http://fernfortuniversity.com/term-papers/swot/1433/562-hyatt-hotels.php Hyatt House King of Prussia. (n.d.). Retrieved from Facebook: https://www.facebook.com/pg/HyattHouseKingofPrussia/about/?ref=page_internal Hyatt House Philadelphia King of Prussia. (n.d.). Retrieved from Hyatt: https://www.hyatt.com/en-US/hotel/pennsylvania/hyatt-house-philadelphia-king-of-prussia/phlxk Hyatt House Philadelphia/King of Prussia . (n.d.). Retrieved from Tripadvisor: https://www.tripadvisor.com/Hotel_Review-g52930-d2152197-Reviews-Hyatt_House_Philadelphia_King_of_Prussia-King_of_Prussia_Pennsylvania.html investors Relations. (2012). Retrieved from Hyatt: http://investors.hyatt.com/investor-relations/our-company/default.aspx Kaplan, D. (2016, Apr 12th). Hyatt’s Millennial Appeal: Local Guides And Experiences Over Rewards Points. Retrieved from GeoMarketing: https://geomarketing.com/hyatts-millennial-appeal-local-guides-and-experiences-over-rewards-points Philadelphia Facts and Figures. (2018, March 6). Retrieved from discoverphl: https://www.discoverphl.com/meet/choose-philadelphia/facts-and-figures/ Quarterly average daily rate of hotels in Philadelphia in 2016 and 2017 (in U.S. dollars). (2017, Septemer). Retrieved from statista: https://www.statista.com/statistics/202397/average-daily-rate-of-hotels-in-philadelphia/ Ram, G. (2018, February 13th). Retrieved from 4Hoteliers: https://www.4hoteliers.com/features/article/11027 Rossenfeld, C. (2017, Nov 29th). Regulatory, Economic and Disruptive Factors in the Hotel Sector. Retrieved from Globest: https://www.globest.com/sites/carrierossenfeld/2017/11/29/regulatory-economic-and-disruptive-factors-in-the-hotel-sector/?slreturn=20180911145815 Rothstein, E. (2018, August 13). Philadelphia Hotels Set New Records For Revenue, Occupancy Read more at: https://www.bisnow.com/philadelphia/news/hotel/philadelphia-hotels-set-new-records-for-revenue-occupancy-91742?utm_source=CopyShare&utm_medium=Browser. Retrieved from Bisnow: https://www.bisnow.com/philadelphia/news/hotel/philadelphia-hotels-set-new-records-for-revenue-occupancy-91742 Rothstein, M. 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