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Crown Plaza Hotels: PEST Analysis and Recommendations Report

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Updated: Aug 9th, 2021

Executive Summary

The high level of competition among hotels in the hospitality business has significantly increased as customers are becoming more sophisticated and educated. Clients have been demanding a more excellent range of luxurious services and products offered by hotels. In addition, hotels have found that establishing strong relationships with potential customers is the critical aspect of gaining competitive advantage and attracting clients.

Thus, the purpose of the paper is studying the service marketing mix of an organisation as well as making recommendations for future operations. Through focusing on the example of Crowne Plaza Hotel’s activities, it will be possible to identify driving factors influencing consumer choices. Crown Plaza Hotels should develop a new customer-friendly loyalty program, increase hotels’ cybersecurity and invest in personnel training.

PEST Analysis

Crown Plaza is a multinational chain of upscale, full-service hotels that target the demands of business travellers as well as the market of meetings and conventions. The hotel chain is a part of the InterContinental Hotels Group family, which operates in more than 100 countries and more than 3600 hotels globally (IHG, 2019). In order to understand the company’s current marketing mix that influences customer decisions, it is vital to provide Crown Hotels’ PEST analysis. It refers to a strategic business tool used for discovering, evaluating and organising the macroeconomic factors influencing a business. It urges organisations to focus on better strategic planning and effective marketing procedures. The framework examines threats and opportunities for a given organisation as applied to political, economic, social and technological environments.

In terms of the political environment, Crown Plaza Hotels has extensive opportunities for expansion in new geographical markets across New Zealand as well as other countries. Partnership with SAMHI group in India can be beneficial for the organisation (Chaturvedi, 2017). Through rebranding 2000 rooms to fil the Holiday Inn Express format, the company can cater to the demands of customers while also exploring a new market. In China, the opportunities for extending operations are also vast through opening 300 new hotels between 2018 and 2023 (“IHG to open 300 more mainland China hotels within five years,” 2018).

From the economic perspective, the company is highly profitable, showing consistent growth across all regions. Another advantage of Crown Plaza Hotels is associated with its global presence and the wide variety of brands. For example, such brands as InterContinental, Hotel Indigo, Holiday Inn, Candlewood Suites Hotels and others are hugely recognisable among customers, which contributes to the increased profitability, in New Zealand Also.

From the social standpoint, the organisation’s rewards program gathered negative reviews from customers; for instance, they clients not receive the rewards that had been promised to them initially. The two weaknesses show that the company should pay more attention to loyalty practices at its hotels to offer a unique value proposition. When it comes to the technological environment of Crown Plaza, it is important to mention weak Information Technology (IT) security as well as the IGH Rewards Club. For example, around 1,200 hotels within the chain were affected by stolen credit card information such as cardholders’ names, card numbers, internal verification codes and other valuable data (Sharp, 2017).

It is also important to mention the threats facing Crown Plaza, it is essential to mention competition and recruitment challenges. Such competitors as Marriot, Hyatt, Hilton and Choice groups represent significant threats for the organisation by taking away their customers and offering unique value propositions. In terms of recruitment issues, the company has experienced some challenges in China where there is a lack of necessary skills of graduates to work in the hospitality sector. Based on the assessment above, it can be concluded that Crown Plaza Hotels is one of the least problematic large companies in the hospitality industry worldwide.

Due to the extensive presence of hotels across the globe as well as effectiveness in branding and operational management, the organisation has managed to attain the desired level of success. However, there are issues in the current service marketing mix that requires more attention from the firm. To be specific, Crown Plaza Hotels has to develop a new customer-friendly loyalty program to raise the level of clients’ satisfaction. Also, the help of IT specialists is needed to increase hotels’ cybersecurity and thus prevent client information from being stolen. Lastly, it is recommended that the company invests in personnel training, given the vast expansion opportunities in India and China.

Recommendations

To improve the current service marketing mix, extensive investments into customer relationship management Is needed. Through the application of the seven-skills approach for creating long-lasting connections with customers, the company can reach the desired level of effectiveness. The combination of such skills as targeting, assessing, preparation, committing, connecting, solving and managing is essential for organisations in the hotel industry to ensure the definite success of Crown Plaza Hotels.

An effective customer loyalty program is the first step toward increasing the competitive advantage of Crown Plaza Hotels. A hotel rewards program should be developed in such a way that would benefit customers while not only adding value to the company. The organisation may follow the example of Marriott Rewards that claimed the principal spot in 2017-2018 as the Best Hotel Rewards Program (Marriott International, 2018).

The perks of the loyalty program include the links of customer accounts within the Starwood Preferred Guest program, no blackout dates for redeeming free stays, bonus points applied to hotel bookings, flights, cars and other vacation packages. Also, the program has additional customer benefits such as free Wi-Fi, rates of discounted redemption and other loyalty perks. Such a program promotes a sense of loyalty through incentivising hotel guests to choose their stay destinations on the basis of having to acquire loyalty points.

Cyber and data security at Crown Plaza Hotels represents another point for improvement. With the increased reliance on digital technologies come increased risks for data breaches that are outside the control of corporations. Apart from the moral considerations associated with increased IT security risks, there is also a financial problem linked to the use of personal data. It is recommended that the company develops an appropriate vision for the desired state of digital security and implements the necessary efforts for strengthening systems’ integrity.

A valuable lesson to learn from Marriott International is always to scrutinise cybersecurity and data handling of other companies when going into any type of cooperation with other companies. Also, when purchasing new applications, systems and infrastructure, Crown Plaza Hotels should invest in strengthening the security capabilities of the newly-acquired systems with the already existing ones through increased encryption and security. In addition, proper data storage efforts are necessary to prevent customers’ data from being stolen.

Due to the challenges associated with recruitment, it is recommended for Crown Plaza Hotels to invest in training programs for the personnel. Therefore, to make the organization competitive, managers should be committed to creating an environment and culture of continuous improvement. When hiring unskilled staff in countries such as China, it is imperative that the management assesses employees’ training needs. The involvement of coaches specialising in the hospitality industry can be of benefit in terms of training even in New Zealand because they will be able to transfer their own experiences to workers who lack the appropriate degree of expertise. However, ongoing training is also necessary for ensuring that employees feel supported in their efforts to adjust to the high-demanding environment of luxury hotels.

To conclude, the current exploration of the position of Crown Plaza Hotels in the hospitality industry showed that the organisation has significant growth opportunities, especially given its international presence. However, consumer choices are limited by the lack of effective decisions made by the company in terms of data security and customer relationships. While catering to the luxury segment as well as those who travel for work, the organisation fails to provide a customer loyalty program that would strengthen the connections with clients. In addition, it is imperative to recognise that the chain of hotels has experienced some problems with protecting their clients’ personal and financial information.

Because of this, it was recommended for the higher management of the company to invest in reliable security solutions as well as be more proactive in analysing how other companies-partners approach the issue of data protection. Another important recommendation is concerned with providing training for the unskilled personnel in countries where education in hospitality industry has not reached the necessary level of sophistication.

References

Chaturvedi, A. (2017). . The Economic Times. Web.

IHG to open 300 more mainland China hotels within five years. (2018). USC News. Web.

IHG. (2019). Our brands. Web.

Marriott International. (2018). . Web.

Sharp, A. (2017). . Reuters. Web.

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