The process of doing research on the business enterprise environment within which the firm operates and on the business itself, in order to formulate and implementation of strategy for future business operations can be mentioned as Strategic evaluation of hospitality organization. To do the assessment may use range of tools to process of strategic evaluation, including Infestation (sometimes PESTLE) for analyze external environment and, SWOT research use for the inner environmental scanning, and Michael Porter's five makes model use to helps to comprehend the competitive causes, the attractiveness and current position in the industry.
An effective way to learn the past, present and future potentials regarding the industry development is inspecting the industry backdrop as the part of proper analysis. The Exterior analysis can determine the factors impacting on the industry to be existed including political, economical, social, technical, legal and environmental that have great impacts to run the business enterprise and use PESTLE research.
In any industry which it is home or international, whether relating to products or services, the rules of competition are personified in five competitive makes of accessibility of new competition, threat of substitutes, bargaining electric power of customers, bargaining vitality of suppliers, and rivalry among the prevailing competitors. According to Porter, one of the crucial determinants of firm profitability is industrial attractiveness.
In this assignment, a strategic evaluation of the Galadhari hotel which is hospitality industry has been done through the mixture of both theoretical and sensible facts regarding this property including organizational track record and industry record of the hospitality sector in Sri Lanka, an diagnosis of the makes affecting the exterior environment (the utilization of PESTLE analysis) and an evaluation of the attractiveness of this industry (the utilization of Porter's 5 pushes) about the future tactical action to grab more hospitality market show.
Background of the industry and about Organization
By related to about the Sri Lankan market of travel and leisure there may be seen progress in the tourist market. All this euphoria gives climb to the uncertainty about whether Sri Lanka Travel and leisure is well on the way to recovery and growth or not. For the last seven months that concluded July this season (2010), arrivals are up almost 50% year-on-year (YOY) (341, 991), with income also keeping speed at 69% progress (Quarter 2; US$ 244. 5 million). The hotel and travel Colombo Stock Exchange (CSE) index has been increased by almost 200% for 2009. Today travel and leisure is operating on everyone's brains, and it is difficult to open up a local magazine without finding at least one written article on travel and leisure.
The reason for the remarkable improvement in Sri Lanka's tourism data is the success of war in-may 2009. This would be a impressive result when compared with other regional travel and leisure destinations. Another reason behind this improvement was the first choice of the terrorist has killed and there is reason behind careful optimism that the interpersonal situation in Sri Lanka can improve rapidly. We can pray the company usually takes advantage of the 'peace dividend' by increasing the amount of destinations the flight serves.
Hotel Galadhari is one of the leading 5 star luxury hotels in the Sri Lanka. The storyline of the Galadari Hotel, Colombo which exposed its doorways in 1984, is an outstanding tale of continual improvement of product and highest standard of quality in hospitality within the last 25 years.
The vision & beliefs of the hotel is solidly grounded in extending a true unique service to all our guests, laced with an unforgettable luxury hotel experience with the best possible traditions of international hotel-keeping.
The Galadari Hotel, Colombo, meticulous about keeping the privacy of its friends has drawn in many at the very top personality from about the world such as heads of government, primary ministers of leading nations, royalty, well known sports activities & music personalities within the last two and half ages.
Situated in Colombo city with many a historical building within walking distance and a breathtaking view of the superb Indian ocean, the Galadari Hotel offers a rich combination of service and quality in five star luxury living with 450 room very luxury hotel in Sri Lanka that overlooks the Indian Sea and is adjacent to the Presidential Secretariat, Finance institutions and the earth Trade Center, with quick access to the shopping areas in Colombo. In hotel they are really so many facilities can be found, coffee shop lobby club, chine's restaurant, Scheherazade Arabic restaurant, pastry shop and garden terrace, karaoke, pub and also have health club and pool, body health care and massage remedy, bed-and-breakfast hospitality properties are available to accommodate the friends and the essential requirements of their comfortable stay.
Hospitality sector is a great income source technology for the new shareholders. For instance, total annual turnover (in2008) was Rs. 164 (million), operating income (in2008) was Rs. 13. 65(million), expansion in turnover (in 2009 2009) was twenty five percent, number of rooms is 450 rooms, average occupancy rate was 80 percent and progress in local hospitality sector is 15 percent. Now, it is straightforward to understand that how much income earning Galadhari hotel in its sector of hospitality.
Mission of Hotel Galadari
We are exceptional providers of contemporary 4 and 5 celebrity hotels and create value in every encounter with our owners, guests and affiliates.
Vision
Exceptional and customized service, exceeding anticipations, and uplifting a link with our brand in the encounters we provide.
Values
Exceptional Service - Company recognize that the value can be created with every encounter and this is shown in its superior standard of service.
Integrity - honest and straightforward in our relationships with hotel owners, guests, colleagues and the communities in which hotel operate
Respect - Hotel Galadari value the objectives of your stakeholders, the prices of its guests, and the social difference in the locations it operate.
Teamwork and Interest - We bring our specific expertise, imagination and interest for industry as a Hotel Galadari team member.
Continuous Improvement - Hotel is impressive and utilizes guidelines to continually improve its management techniques, and the grade of products and services.
Strengths and Weakness
Strengths
Visitors from American Europe also favor to stay in hotels in the southern seaside belt where the primary interest is the beaches. So Located area of the Hotel Galadhari is power to the business to improve their businesses.
There has also been a downturn in the arrival of Indians, who favor Colombo hotels.
Colombo city hotels have been able to maintain higher occupancy levels than hotels on the southern coastal belt because of more business travelers, and special visitors such as those coming for meetings. Hence Galadhari also have more work at home opportunities in the Colombo city.
Since then the leisure sector has under-performed hugely, and Galadhari hotel has more facilities to spend your day more leisurely.
Well expertise work group has Galadhari to provide satisfied service with their customers
Weaknesses
The location of the hotel is in the high security zone in Colombo which is situated in Galle Face Green promenade and with views in the Indian Sea, this property offers a higher level of service and security. Hence it could get troubles to the travellers. Situated right next to the entire world Trade Middle and the President's Dwelling, the hotel enjoys the soundest area of the city.
The distance to hotel between air-port is very way and gets more time to re ach hotel. It might cause to the business conferences that happen to be presented in the hotel. The main reason for the proven of Galadari Hotel is to get the overseas workshops & meetings to the Sri Lanka. Because of the distance to Air-port and hotel is too far and get additional time to attain to the destination. And also the traffic on the streets is principally impact to enough time it takes to come quickly to the hotel. Due to these reasons the main purpose is not achieved.
Galadhari has only few room facilities and they have sufficient land to generate new resort rooms in their own land.
Hotels Galadhari has high gearing, high costs to maintain staff, and then for refurbishment.
Factors affecting the external environment in hospitality
In strategic planning, external analysis of hospitality industry has been finished with the use of PESTLE analysis and Porter's 5 (five) forces in determining the strategy, making decisions on allocating resources to pursue the strategy.
Source: http://www. sltda. lk/sites/default/files/Statistics_book. pdf (Gain access to: 15th September 2010)
Source: http://www. sltda. lk/sites/default/files/Statistics_book. pdf (Access: 15th Sept 2010)
PESTLE Analysis
Political Factors
In Sri Lanka it is socialist republic, status. The federal government is an assortment of the parliamentary and presidential system. Brain of the state is leader and current Leader is Mr. Mahinda Rajapaksha and he's the chief of armed forces and brain of authorities.
When the firms formulate and put into action the strategies the political arena has an enormous impact upon the regulation of businesses, and the spending electricity of consumers and other businesses. We have to concern about how stable is the politics environment, impact of polices, laws and regulations that regulate or tax your business, What is the government's position on marketing ethics, government's plan on the overall economy, government take on culture and faith, government participation in trading contracts.
State has main responsibility to help in to the travellers and financing to the tourism products development jobs and do deals to attract the travelers to the united states. Alternatively government has to encourage local and foreign investors to get their money to build up travel and leisure products and liberate fees.
To expansion of the travel and leisure infrastructure facilities are directly affect. So federal government has the main responsibility to build up and keep maintaining infrastructure. Educated workforce in international standard is also important to provide good and sufficient service to the clients. Because of that federal government has make regulations to standardize.
A change in authorities party is immediately impact to the any industry in the united states because their regulations it will effect to run the business enterprise. When the federal government strict their security procedures it highly impact to the Galadhari hotel. Because traveler who are arriving to the hotel. It causes waste time and may be getting bad image among the list of tourists.
. The Travel and leisure Function No 38 of 2005 arrived to effect in October 2007. Together with the movement of the new Tourism function, the Sri Lanka Tourist Board Take action No 10 of 1966, that was in place for days gone by 41 years, was replaced.
In terms of the requirements within the new take action, the Travel and leisure Development Account was officially constituted, with 2 main resources remitting money to the account. Through 1/3 of the Air port Tax choices and 1% of the Turnover of most Sri Lanka Holiday Board registered organizations. The Act provided for the establishing of the Sri Lanka Tourism Development Authority, thereby upgrading the Sri Lanka Traveler Board.
Economic factors
In Sri Lanka they have open economy and the Gross Domestic Pproduct grew at an average annual rate of 5. 5% in the united states. In Sri Lanka service sector is strong throughout the market and it reveal 58%, fro agriculture its' 12. 8% and from industry 29. 2%.
Almost everyone discusses Sri Lanka tourism being the engine of development and expects it to play a pivotal role throughout the market and it includes improved in 6% in this season.
Tourism give advantages to the overall economy as well as it will be the cost to the current economic climate. Tourism process also will involve economic costs, including the immediate costs incurred by tourism businesses, government charges for infrastructure to better serve holidaymakers, congestion and related costs borne by individuals in the community.
Economic effects are also become crucial factors in marketing and management decisions which can be directly effecting. Neighborhoods therefore need to understand the relative importance of tourism to their region, state or community.
Tourism provides great opportunities for regional development especially for regional areas having structural change. Being a labor intensive industry, with the right desire tourism can deliver great occupation and training opportunities particularly for young people who prefer to be experts in this field.
Social Factor
Sri Lanka being truly a multi-religious, multi-ethnic country with a inhabitants of 22 million plus's Lankan culture is a abundant mixture of the conversation of diverse cultural habits both indigenous and produced from, trade, religions that happen to be Buddhism - 69%, Islam - 15%, hinduism - 8%, Christianity - 8%. The cultural habits of Sri Lanka today show the long lasting impact of your diverse selection of cultures. .
The overall culture is largely the result of the impact of the advantages of Buddhism, more than 2, 300 years ago and Hinduism the second most prevalent religious beliefs in Sri Lanka. This does not remove the heavy influence of Hinduism, together with the smaller impact of Islam, and Christianity.
By regarding about the training qualifications the literacy rate of 92%, and 83% of the full total population having had extra education in the country. Sri Lanka has one of the most literate populations amidst developing countries.
Tourists appreciate the hospitality of Sri Lankan People. When the hotel Galadhari provide the services like cabare dance, supplying prostitutes are not suitable to the Sri Lankan culture.
The bad effects of the tourism can said that tourism has affected the values in our people, especially our youth. It really is true that some visitors take part in anti - social acts. A number of the tourists are medicine addicts or perverts and corrupt our junior and they multiply incurable diseases such as aids. But we should keep in head that all the tourists aren't dark sheep.
Technological Factors
Technological factors are also important truth which impact to the hotel industry in many ways which can be comprises the utilization of the latest innovations and technologies aid the business activities that happen to be digital cell phone facilities, broadband Internet connection, Wi-Fi technology, multimedia projector, LCD monitors, online booking systems, property management software and online information exchange program (Point of Sale) etc.
Now a day's technology is swiftly changing in the world day by day. As the five star hotel Galadhari should suspect to the new technology on the market. It will help the organization to acquire competitive advantages. Technology can used to booking, online services like online reservation, do the promotions.
The rapid development of technology has effects on the firms in Sri Lanka and all over the world. Changes in the technology have altered just how businesses operate i. e. Internet booking for tickets and vacations.
Faster changing development in technology creates a need to respond quickly for different businesses to be able they want to maintain the competitive environment by giving the same progressive services, which their opponents are offering. Circulation of products by the use of technologies.
Legal Factor
When related to about the legal factors include tourism act, discrimination regulation, consumer law, work law and health insurance and safeness. These factors make a difference what sort of hotel works, its costs, and the demand because of its products in traveler industry.
The Tourism Function No 38 of 2005 arrived to consequence in Oct 2007. With the move of the new Travel and leisure work, the Sri Lanka Vacationer Board Take action No 10 of 1966, which was in achieve for the past more than forty years, was changed. In conditions of the products managed in the new take action, the Travel and leisure Development Account was lawfully constituted, with two main resources remitting funds to the finance. By means of 1/3 of the International airport Tax collections and 1% of the earnings of all Sri Lanka Vacationer Board registered organizations.
Attracting and promotion is dealt with by the Travel and leisure Promotion Bureau. Tourism HRD functions and the Hotels School operations are carried out by the Sri Lanka Institute of Travel and leisure & Hotel Management. The Sri Lanka Convention Bureau was also restructured as a statutory body like other Establishments to be monitored by an independent Table of Management
Environmental Factor
Hotel Galadhari can be found in the Colombo and in Colombo it hasn't proper drainage removal system and the hotel dispose its drainage to the ocean. Because of that so many environmental issues took place around that. Whenever we promote tourism there are thousands of tourists unleashed annually in the united states, without proper planning, there is bound to be serious environmental and sustainability issues. Such large-scale and fast record growth has to be carefully designed and handled within specific tourism zones to prevent environmental and social degradation.
Individual hotel innovations won't suffice. Such well-planned, large-scale vacationer resorts can be designed to encompass sound lasting environmental tactics (e. g. , common self-contained sewage removal facilities with recycling of normal water, solar light for resort public areas, no-build renewable belts within resorts, etc).
Such sorted out and well-managed, large-scale improvements within several designated zones will help mitigate the majority of the possible negative fallout of the socio-cultural and environmental aspects. Building and succeeding maintenance should be under rigorous environmentally-sustainable suggestions.
Hotel industry immediately affect to environmentally friendly pollution in the united states. As the five stars category hotel, Galadhari gets the responsibility to protect our environment and also advancements in the united states and have to take into account the pollution
Assessing the Elegance of the Hotel in the Industry
Treat of new entity
According to tourism work the new entrant has to abide by this regulation to determine a hotel as well as charges for the services. In the business arena, the number of competitors rises when any business group makes good revenue and has a good potentiality for future.
According to current situation, accessibility obstacles are high and leave barriers are low, few new organizations can enter the industry and terribly performing firms can easily exit. After the battle Sri Lankan government has opened the marketplace to new traders to get their money to develop new hotels as the hotel industry is currently booming in the country.
In that situation so many hotels are building in the north area and customers willing to travel in those areas. New entities are use new technology and expert understanding to develop their business and it may be affect expansion of the business enterprise of Galadhari hotel.
There are factors related with the hazards of new entrants in the hotel industry in Sri Lanka that happen to be as follows-
Easy credit facilities for new business people in hospitality industry and Legal supports from the government for local entrepreneurs
Infrastructure development
Policies for international investors to establish world-class corporation including tax exemptions, ownership, obligation, tax rules and remittance,
'National Tourism Coverage and Eyesight' to improve up the travel and leisure and hospitality industry,
Fewer numbers of competitors in today's software industry. (Only 5 five-star hotels in Sri Lanka).
Higher earnings margin
Threat of substitute products
As the hotel industry specifically focuses on on accommodation, entertainment and fooding facilities, the substitutes of these facilities can include other food industries (junk food and restaurants), entertainment (bar, discos, clubs etc. ) as well as for accommodation facilities showing with private establishment (viewing friends and family) and more related to accommodation facilities.
Every customer looks for high perceive value in their possessed products. Alternative products are goods and services from outside a given industry that perform similar or the same work as a product that the industry produces. In this particular framework, many organizations focus on their competitors alternatively than alternative products and the market show declines concurrently, which means market strategies should be adaptable to cope with such hazards.
In the hospitality industry, the substitutes can include various types of guest residences, inns, motels, private-owned guest houses, real estate, small boutique hotels, bread-and-breakfast hotels and apartment hotels that will be the threats for a specific star-category hotel like Galadhari.
In this current industry, there a wide range of substitutes of the star-category hotels in Colombo for accommodation - Jaj -Samudra, Gall face Hotel, Hilton, Support Lavinia, . ; for food - KFC, McDonalds, Pizza Hut, BFC, Pizza Corner, Dominos Pizza etc. ; for entertainment - dance clubs, many more which can distract the clients rather than the hospitality industry to have the products and services of a hotel.
Competitive Rivalry among existing players
In the conventional financial mock-up, competition between rival companies drives earnings to zero and is not ideal and companies aren't simple inactive price takers. Somewhat, companies have difficulties for a competitive gain over their competitors. The effectiveness of rivalry among businesses varies across sectors, and tactical analysts are attending to in these distinctions.
In this current competitive period, the difficult competition among business organizations raises when variety of competition are in the same market place predicated on their products categories, target market segments, types of services, financial affordability, volume of the organization, profitability and potentiality of the market trends for long term business. In cases like this, price discount, special offers, lower profit margin and ignore in the market share are generally occurring between competition.
In Colombo, the rivalry among competitors is absolutely high as this hospitality is a booming sector in Sri Lanka and only few opponents in the five-star category hotels in Sri Lanka to provide the clients.
Moreover, the customers want to defend the other person through products variance, service quality improvement, defining new target market segments, exploring new products technology and development and providing exclusive facilities to the guests.
The competitive rivalry is going on in hospitality industry in the Sri Lanka which is also have an effect on to the hotel like Galadhari. When the business implements their strategies they should have Varity in their products and services.
Bargaining ability of suppliers
The suppliers can play one of the key roles in growing or declining the representation of a business. If the suppliers are definitely more, the bargaining electricity of them generally falls whereas fewer suppliers can demand more advantages from the organization.
Suppliers are those firms or people that provide contribution into the creation of an industry's production on time. It could be in kinds of resources and raw materials, services, employment, immediate products and others obligatory products by the business.
Now per day most of the services have out source in the companies. Inside the hotel industry, the suppliers get excited about various departments including rooms, food and beverages, IT, guest and travel bookings, security guarantee, property management, carry, guaranteeing business facilities etc. The suppliers in case there is hotel of Galadhari is including travel companies and tour providers for guest reservations as well as commercial clients, educational institutions for manpower resource, IT businesses for property management software and IT solutions, local importers for international food and drinks supply, security agents for safety and security, local rent-a-car for special agreement etc.
Bargaining electricity of customers
One of the main gatherings is customer atlanta divorce attorneys organization. Customers indicate consumers or intermediaries those who choose the production of an organization to possess or resell it to someone else on the market. If there are numerous products and huge competition, customer bargaining ability rises up and vice versa.
The bargaining electricity of customers is determined by some factors like requirements of the customers, time and convenience to the desired destinations and therefore, they can easily toggle into another product.
By taking into consideration the hotel industry in Sri Lanka, the bargaining electric power of customers are very high and they have sufficient options to toggle into another hotels by looking at in terms of costs, quality of service, product categories and special offers provided specifically for group bookings and long-term stay. Sometimes Galadhari hotel has rack rate of the hotel facilities.
In the find seasons like December, the bargaining electric power of the clients becomes lower and lower. When in the travel and leisure season the hotel has unbearable customers and their bargaining power also high in this season.
7. 0 Conclusion
The process of doing research on the business enterprise environment within that your firm operates and on the business itself, in order to formulate and implementation of technique for future business procedures can be talked about as Strategic analysis of hospitality group. To do the assessment can use quantity of tools to procedure for strategic examination, including PEST (sometimes PESTLE) for analyze external environment and, SWOT research use for the inner environmental scanning, and Michael Porter's five pushes model use to assists to understand the competitive makes, the appeal and current position on the market.
