Every hotel has a different guest demographic that they are targeting, with some catering to guests seeking affordability while others cater to guests seeking luxury. The main difference lies in what the hotel in question is actually capable of doing, in terms of available resources, operational capacity and type of services available.
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Hotel chains such as the Marriott, Hilton and Shangri-la obviously have higher operational capacities and types of services available as such they cater to a higher class of consumer. Other smaller hotel chains do not have the same level of operational capacity and types of service available, as such; they usually cater to consumer demographics that desire affordability and convenience over services and luxury.
Such distinctions are important to take note of since how hotels attract customers is directly related to what their level of operations and services are capable of doing. While the Fairmont Bab Al Bahr in Abu Dhabi is practically symbolic of the epitome of luxury within the city, the fact remains that it has a considerable degree of competition from similarly luxurious hotels within its general vicinity such as the Emirates Palace Hotel, the Rosewood Abu Dhabi, the Shangri-La Hotel Qaryat Al Beri Abu Dhabi and many others.
It is based on this that an additional form of marketing is necessary in order to better entice consumers to utilize the Fairmont as compared to the other luxurious hotels within Abu Dhabi especially when taking into consideration the upcoming New Year which is sure to attract thousands of possible guests from around the region into the city.
Marketing Strategy Proposal
The concept of going green is based off the process of altering approaches towards the consumption and utilization of resources so as to ensure a more environmentally friendly method of using and consuming resources (Radwan, Jones & Minoli, 2012).
The basis behind this is the assumption that since the Earth is a closed off ecosystem with a finite amount of resources if nothing is done to conserve and ensure these resources stay replenishable in the long run there may come a time when the Earth will no longer be able to support human civilization.
Such an assumption is not without merit, as the human population continues to expand so too does the demand for resources increase. It must be noted though that the concept of going green is not a recent trend rather it has been going since the early 1970’s through the creation of various recycling programs and centers.
Despite this, it has only been within the past decade that the concept of environmental conservation has entered into popular culture. Various studies have shown that due to the growing trend in environmental conservation many consumers would be willing to spend money on products that indicate that they were created through environmentally beneficial practices rather than products that do not have such a distinction (Radwan, Jones & Minoli, 2012).
Such a strategy could be implemented by the Fairmont within the next few weeks leading up the New Year with the potential for the hotel marketing itself as Abu Dhabi’s “greenest” hotel in terms of the environmentally conscious practices it implements.
Necessity of Establishing a Level of Distinction
As mentioned earlier, within Abu Dhabi exists a variety of hotels that are comparable or exceed the level of distinction that the Fairmont has. This presents a rather unique competitive setup due to the fact that each hotel chain can be stated as offering roughly the same level of services, having the same level of operational capacity and also having the same level of international distinction.
While such a setup is advantageous for consumers it is quite the opposite for the hotel chains present since attempts at price reductions, special offers or extra services can also be done by competitors with the same level of operational capacity and financial resources. It would be another matter if it was a major international hotel chain competing against smaller locally based hotels but in this situation it is a case of international hotel chains competing against each other within a small confined location.
What must be understood is that, as a business, hotels try to achieve a certain level of profit in order to stay operational, as such in a situation where competition is high hotel chains concentrated within a certain area must find a way to distinguish themselves from their competition in a manner that is both profitable and results in a greater degree of guest patronage.
Reputation of Hotels
One factor that must be taken into consideration is the fact that the methods of operation of various hotel chains are considered wasteful and actually contribute to operational costs. While this varies from hotel to hotel wasteful costs such as excessive water and electricity use as well as continuously replacing soap, shampoo and sheets despite no inherent need actually drives up the cost operations.
Facility maintenance is actually one of the highest operational costs in the balance sheets of most hotels due to an apparent need to please guests which actually facilitates and even encourages wasteful practices which drive up the cost of operations. While there is nothing wrong with maintaining high quality standards at specific establishments there is a problem when such high standards promote an operational culture that encourages wastefulness.
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As indicated through interviews with various hotel staff members in randomly selected hotels in Abu Dhabi (who wish to remain anonymous due to the nature of their comments), wastefulness is actually an inherent part of a hotel’s S.O.P (standard operating procedure) wherein in order to maintain a certain level of facility quality, areas are often times cleaned more than what is actually necessary (Erbaşı & Ünüvar, 2012).
While cleanliness is important to all living environments, cleaning a specific area that does not have a high concentration of guests several times within a given week using various cleansers, dusters and electronic washers makes little sense for the hotel staff. Not only that lights are kept on nearly 24 hours a day 7 days a week in various hotel areas that do not have hotel guests or staff at all.
Staff members have also observed that the hotel rarely puts up signs informing guests to conserve electricity or water and as a result this culture of wastefulness has resulted in air conditioning units being left on despite no one using the room, water being allowed to run freely from faucets despite no apparent need to do so and bathroom products such as soaps, shampoos and conditioners are often replaced daily despite them not being used at all.
Such practices not only drive up the cost of operation but are considered environmentally wasteful given the amount of resources utilized.
What does going green mean for a hotel?
For a hotel to adopt methods of environmental stewardship this means a radical change in the way it utilizes resources, namely:
a.) The reduction of hazardous products used in hotel maintenance (Manson, 2012).
b.) The use of more energy efficient equipment such as lights, heating, air conditioning and construction materials (Manson, 2012).
c.) Recycling of various waste products that come as a result of daily hotel operations (Manson, 2012).
d.) The use of energy efficient vehicles in hotel operations (Manson, 2012).
e.) Conservation of water and other natural resources (Manson, 2012).
For this proposal, the product positioning used is the concept of going green wherein a hotel portrays itself as utilizing environmentally beneficial practices that do not waste resources. This of course is capitalizing on the current trend in consumer environmental awareness where individuals have started to adopt practices that promote environmentally sustainable methods of utilizing resources.
What must be understood is that product positioning is a method of defining who you are to a potential customer and utilizing what you have to offer to coincide with that particular consumer’s preferences. By targeting a particular consumer market and implementing a particular method of positioning a company is then able to attract consumers to utilize their particular product or service (Pereira-Moliner et al., 2012).
For the hotel industry that is being examined in this paper this means targeting environmentally conscious consumers that wish to stay in the general area for a short period of time, positioning the image of the company to coincide with their preferences for environmentally sustainable practices, setting a price range acceptable for both the hotel and the consumer and finally delivering on the chosen image by showing the green practices being done by the hotel.
The aim of this market research is to investigate and determine the extent of hotels going “green” from the perspectives of guests within the Fairmont hotel in Abu Dhabi as well as others within the general vicinity.
The main objectives of this market research are the following:
- To prove the importance for sustainable development in hospitality industry
- To identify any generally accepted good practices to sustainable development for hotels
- To ascertain factors for guest expectation of a green environment in the hospitality industry and whether these have been met in the context of 4- and 5-star hotels in Abu Dhabi.
- To suggest the proper methodology in order to achieve the goal
- To identify further study/research areas under the same subject
Surveys will be carried out for this study with a focus on the staff members and customers of the randomly selected 4 to 5 star hotels in Abu Dhabi. The survey will be in a form of questionnaires with four major areas of focus:
- how important the interviewee thinks sustainable development is for hospitality industry
- what are the requirements and challenges that have been achieved or will be need to achieve the goal
- what are the potential solutions the interviewees recommend to overcome these challenges
- Other comments/suggestion regarding the sustainable development for hospitality industry.
Data from the surveys will be collected and filtered based on the pre-defined criteria. The data will then be categorized and analyzed accordingly to achieve the objectives for this study.
Do you think hotels in the hospitality industry should take action in going green?
Would a hotel going green influence your choice of which hotel to stay at?
Do you think sustainable practices are important for the hospitality industry?
Would a green hotel be your first choice to stay at?
Would you prefer a hotel that is green when compared to other alternatives that are cheaper yet utilize wasteful practices?
Would you recommend a green hotel to a friend to stay at?
What is your general perception of a hotel that does go green?
In the upcoming New Year celebration, would you choose to stay at a hotel that you know implements sustainable practices of operation?
Scope and Limitations
This market study will primarily focus on the concept of sustainable development in the hotel industry and how guests perceive hotels using environmentally beneficial practices. As such information utilized will come primarily from recent sources that deal with consumer behavior, theories on consumer buying habits, processes that influence consumer decisions, the environmental movement and recent cases of hotels going green.
The overall focus of the study will be limited to randomly chosen hotels in Abu Dhabi. The reasoning behind this lies with the fact that a global study where the participants are collected from various hotel chains around the world is not feasible in terms of the available budget, the length of time needed to complete the study and the logistical complications that would ensue from a study of such magnitude.
Theoretical Framework: Theory of Consumer Behavior
The theory of consumer behavior revolves around the concept of the perceived value or satisfaction that a consumer derives from the consumption/ use of a particular commodity.
Sources and types of information
Population and Sample
The population for this particular study will consist of six 4 to 5 star ranked hotels selected at random in Abu Dhabi. For each individual hotel, 5-10 staff members and 20-30 customers will be selected to participate in the survey. That gives a total of 150-240 potential participants.
The reason this particular type of population was used for this study is due to the experience and expertise staff members have with the hotel industry and the fact that hotel guests are the primary source of information needed in order to determine whether a hotel going green is considered to be a positive development or merely inconsequential.
Duration of Study
The total duration of the study will last only one month; the collection of the survey results, creating the appropriate graphs, and the overall period of investigation does not entail anything particularly time consuming as such one month has been determined as being more than enough time to complete the study and present the needed results.
Procedures and techniques used for collecting and analyzing data
The data to be utilized in this study will gathered using surveys consisting of questions that will enable this study to determine what the opinion of hotel workers and guests are towards the concept of a hotel going green. The data will be collected and analyzed using the online survey tool Surveymonkey.com which has a free online survey maker as well as a data analysis tool that should be more than sufficient in properly analyzing the data from the surveys.
To make sure this study attempted a minor test of the operational capacity of the site by making a small survey campaign using online social networking to get several known acquaintances of the researcher input their data on their favorite movies. After one week the data was examined and analyzed using the online tools of the website and the result was more than satisfactory in terms of data clarity and accuracy of the results.
Cost budget for the research
The overall cost of the study itself was negligible; utilizing the online free survey tool Surveymonkey.com removed the need to print 200 copies of the survey questionnaire. This greatly facilitated the collection of survey results which resulted in the only cost for the study being the cost of transportation to and from the various hotels chosen as samples to be used.
|Day of the Week||Task to be accomplished||Where and How Long|
|Monday||Contact the Fairmont hotel as well as other hotels in the area in order to get permission to properly conduct the study||How long: 60 minutes |
|Tuesday||Create the questionnaire and determine an appropriate schedule to conduct the analysis||How long: 60 minutes |
|Wednesday||-Used the internet to read news reports regarding the current state of the green movement in order to help inform the study participants about the survey||How long: 1 hour |
|Thursday||Arrive at the Fairmont hotel and collect the necessary data||How long: 3 hours |
Location: Fairmont hotel
|Friday||Go to other hotels in the general area and collect the necessary data||How long: 8 hours |
Location: Abu Dhabi
|Saturday||Examine the data and categorize the responses as necessary.||How long: 10 hours |
|Sunday||Combine the data results with relevant literature and complete the study||How long: 6 hours |
IMC within the past 3 years
Current Consumer Segments Being Targeted by the Fairmont
An examination of the market segmentation strategy that the Fairmont hotel utilizes reveals that at the present there are two particular consumer groups that it has been targeting, namely: wealthy foreign tourists and wealthy local patrons. What must be understood is that the construction boom that occurred in Abu Dhabi over a decade was a direct result of plans to turn it into a financial and tourist center in order to secure its future when the supply of oil within the region begins to decline (Lee, Bai & Murphy, 2012).
As such the Fairmont hotel capitalized on this vision by implanting a strategy where it constructed hotels and resorts to cater to the predicted influx of wealthy tourists to the region as well as wealthy locals. While such a strategy has worked for the past several years the unprecedented nature of the current financial recession creates the necessity of a new strategy in order to ensure that the Fairmont hotel continues to survive.
Methods Utilized to Reach their Target Market
First and foremost what must be understood is that marketing objectives are considered achieved if the proper consumer segment has been targeted, greater awareness regarding a particular product has been developed all of which results in more consumers patronizing a particular product or service.
Taking this into consideration it can be thought of that promotional activity whether in the form of advertisements, discounts or special offerings are a way in which the average consumer gets “excited” (Pereira-Moliner et al., 2012). By either advertising or using a discount this creates a certain degree of “hype” for a particular product which increases overall consumer interest resulting in greater sales or patronage.
In the case of the Fairmont hotel, what occurs is that through their own promotional activities (i.e. TV advertisements, discounts etc.) this causes more consumers to develop interest for their hotels resulting in a higher guest rate. Furthermore, what must be understood is that since the main goal of marketing is to sell a product or service, by using promotional activities the hotel chain is able to meet its marketing objectives which result in higher guest turnouts.
In the case of local patrons, one method utilized by the hotel is to create special offers for rooms that would otherwise be outside the price range of the lower tier of the elite within U.A.E. society. For example, hotels such as the Burj Al Arab cost roughly 3,000 to 5,000 dirham’s a day, while such an amount is not necessarily that high the fact remains that with the current financial crisis more people within the area are getting more reluctant to spend money due to economic uncertainties.
As such one way of encouraging more guests to try the facilities was to lower the price range to 2,000 dirham’s or less per night and promote going to the hotel in various areas such as Qatar, Oman and other Middle Eastern countries in order to capitalize on some of them being curious as to what it is like to stay at the Fairmont. Other methods of local promotion could include television advertisements specifically targeting the areas stated as well as utilizing various TV promos and limited offerings through various travel agencies as well.
Other markets where the Fairmont hotel actively advertises itself are the cities of Beijing, Shanghai and Guang-zou, the reason for the selection of these particular cities is due to the fact that as a direct result of global outsourcing initiatives China has now become one of the largest manufacturing centers in the world with numerous cities within China holding the distinction of being areas where various Fortune 500 companies have set up their off shored factories.
This trend in outsourcing has actually resulted in the creation of a new Chinese upper class who, due to their increased wealth, have now started to spend on a variety of luxurious items, homes and vacations.
By advertising the various luxurious amenities available and by appealing to the Chinese sense of vanity, the Fairmont hotel in Abu Dhabi has been able to get more than just a few Chinese guests. As such, one method of promotion they utilize is the use of various translated television commercials and Chinese celebrity endorsements in order to entice the newly rich Chinese segment of the population to patronize the Fairmont hotel in Abu Dhabi.
Tools Employed by the Hotel to Reach its Target Market
One of the primary methods the hotel utilizes in order to reach its target market is through the utilization of direct market techniques in the form of its online website, its commercials within the U.A.E as well as various direct promotional trips to various international locations such as Japan, China and Singapore in order to generate significant degrees of awareness of the hotel in such locations.
It is often the case that teams of individuals directly promote the hotel in malls and shopping centers by distributing fliers and having special booths with presentations showing the amenities of the hotel and the advantages of staying there. Such displays can often be seen in the Mall of Dubai as well as in several malls within Abu Dhabi. It should also be noted that the company does utilize Google Ads as a part of its online marketing strategy in order to generate online awareness and to increase traffic to their website.
Another tool often utilized by the Fairmont comes in the form of public relations strategies wherein it often freely hosts various events, symposiums, seminars and business forums in order to generate a significant degree of positive public perception regarding the hotel. It is often the case that utilizing such a strategy creates the impression that the Fairmont hotel is best location to hold an event and, as such, this often generates significant degrees of income for the hotel due to a greater degree of popularity.
It should be noted though that such a strategy is used sparingly due to the inherent costs necessary in hosting a free event at the hotel. Other forms of public relations often utilized by the Fairmont comes in the form of various sponsorship agreements for television and radio programs resulting in more people knowing about the hotel through association with such forms of popular entertainment.
The last method often utilized by the Fairmont to gain consumers is through various sales promotions at business conferences and exhibits. It is often the case that the Fairmont hotel helps to co-sponsor a particular event in exchange for having a booth inside in order to promote the hotel. Not only that, a raffle draw is sometimes held for participants of the fair wherein they get to have a few days and nights of free lodging at the hotel.
The main consumers that this marketing plan is intended to encapsulate are business men/women from within the Middle East and abroad that take an active interest in natural resource conservation. As such, it is intended to encapsulate individuals who are between 23 to 65 years old in age and possess moderate to high income streams.
As such, these people need to possess the desire to note only patronize high quality hotels but must also have the inherent desire to conserve natural resources. Given the current popularity of the “green movement” within the Middle East and various countries abroad, it is will not be surprising that the intended demographic will encompass a large percentage of visitors that arrive within the Abu Dhabi.
The IMC objectives that this paper will attempt to address consists of the following:
a.) Determining the marketability of the Fairmont hotel becoming “green”
b.) Examine what specific methods can be effectively utilized to market the Fairmont hotel as a “green hotel”
c.) Conduct an analysis of the current market whether other hotels have adopted a similar strategy and whether it has been successful
d.) Develop a method of examining the effectiveness of the marketing strategy of the hotel under the new “green” initiative that is to be implemented
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