Marketing
We believe that a hotel Business Plan should be brief and succinct,
containing just five sections in about eight to ten pages. The
quality of the plan rests in the reconnaissance and accumulation of
data, not in its size. Brevity is the watchword with a focus on
strategy and positioning, not mindless fillers and superfluous
content. These sections are:
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Competitor Review and Positioning;
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Hotel Positioning and Strategic Mix (Past and Current);
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Future Intended Positioning and Strategic Mix;
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Overall Strategy by Market Segment;
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Top Account Pursuits & Top Level Action Plans.
The majority of plans usually spend an inordinate amount of time on
competitive evaluative sections without ever getting to the real
meat and potatoes of their business. We would argue that you really
need only four bits of information to get to the main entrée of your
competitors’ business and anything else you learn along the way is
just dessert. You must know: (1) their rate structure; (2) their
strategic mix (when we talk about strategic mix, we are stating,
quite simply, the percentages of their business that are Base,
Transient, Preferred, and Group); (3) their top five accounts: who
they are, how many rooms do they consume and at what rate; (4) is
the competition repositioning in some way? Are they re-branding?
Refurbishing? Renovating? Adding meeting space or altering their
style of service? If you spend all your time finding out these
details and nothing more, you won't need to waste pages with the
traditional, abused and over-used SWOT analysis.
Why is knowing the competition important? There are very few
growing lodging markets in the U.S. today. In other words, there
are few markets where demand is growing at a pace faster than new
supply is coming on line to absorb it. The only way to gain market
share, therefore, is to take it from your competition. Consequently,
there are going to be market leaders and market losers. Unless you
know what your competitor is up to, you cannot capitalize on
opportunities to capture their market share and you’re more likely
to be the latter. In addition to knowing what your current
competition is up to, you need to find out if any new competitive
supply will be coming on line in the coming period. You should
validate any rumored supply and pay attention only to additions that
are going to directly compete with you either due to proximity or
because they will vie for the same market segments in the same
market that you do.
Additionally, any changes to the market’s demand patterns should be
highlighted in this section, especially to the extent that they may
impact the market as a whole and any competitive moves that might be
made in response.
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