S

Yield & Revenue Management

Research ProjectTHE BVLGARI HOTEL VS THE RITZ CARLTON

LONDON

Denny Setiawan 305450Niranjan Prasaad 306416

BVLGARI HOTELS LONDONLocation – 171 Knightsbridge , UK

85 Rooms & Suites3 lane Swimming Pool1 Restaurant & BarBest Spa in London47 seat CinemaBall RoomCigar Shop

BVLGARI HOTELS LONDON – SWOT ANALYSIS

STRENGTHS:

Centrally Located Strong Brand Presence Great Workforce Exquisite Spa Modern Style

WEAKNESSES:

Striving to penetrate the emerging economy and increase no. of properties

Slow Renovation – loss of revenue

Perceived as Expensive Inability to adapt & react to

changing situations

OPPORTUNITIES:

Capacity to increase sales by concentrating on distribution channels.

Potential to open more properties for the high-end society of London

Diversify portfolio to serve multiple seg.

Take advantage of the Technological Revolution

THREATS:

Intense Competition Inflation leading to increase

in the cost of operations.

THE RITZ CARLTON LONDON Location – 150 Piccadilly London 133 Rooms & Suites Most beautiful Ballroom in Europe 3 Restaurants – Palm court, Ritz Restaurant, Rivoli Bar/Private Dining

Casino Spa & SaloonMusic RoomSwimming Pool

THE RITZ CARLTON LONDON – SWOT ANALYSIS

STRENGTHS

Top Notch Service from Ladies & Gentlemen

Located in the Heart of London

Variety of rooms attracting wide market segment

Strong Brand Image Aspirational Brand Loyalty Excellent Reward Programs

WEAKNESS

Only 1 Restaurant Serves proper four Course Meals

Continuous Decline In The Bottom line

Current Economic conditions In London

OPPORTUNITY

Potential to increase wider clientele through Corporate Tie-Ups, Packages & Promotions.

Attract FIT and B2B customers More concentration on

Sustainability and Go Green philosophy

Capacity to increase number of Weddings & Events organized

THREAT

Current Economic conditions In London

Intense Competition - Uncertain Decline in the

Tourism Industry – Natural disasters & Terrorism

Major Competitors – Hyatt, Hilton, Four Seasons & Starwood

PEST ANALYSIS OF THE WORLD’S CITY - LONDON

POLITICAL FACTOR’S: Government considers Tourism as a “Big Ticket” for the future

and implements good policies & incentives for its growth. Established regional Growth Fund through which 236,000 net

jobs can be generated by 2015. Substantially reduced Interest Rates to increase cash flow

and slump unemployment. Relations with other countries to increase global tourism and

create new markets. ECONOMIC FACTOR’S: London – center for business & financial developments. Recession – Impacting spending power of people. Headquarter of the worlds largest banks – Financial advantage Largest economy in the world located at a central time zone

connecting Asian &American markets.

PEST ANALYSIS OF THE WORLD’S CITY - LONDON

SOCIAL FACTOR’S: Fast rate of growth in population – 8.3 million High crime rate calling for high security. Exceptionally high living costs – People prefer services, low on

cost and high on value. Highest percentage of Immigrants who are now residents. Hub for organizing events – social, sports, cultural, fashion,

concerts, etc.

TECHNOLOGICAL FACTOR’S: Advancement in Technology – Hospitality must take advantage to

improve & speed up service – Centralized supply chain management system.

UK is ranked on the top for Technological Advancement. Maintain database of customers (preferences) & advertising.

OTA’S FOR BOTH THE HOTELS Booking.com Ebookers.com Hotels.com Expedia.com Toptable.co.uk Easytobook.com Trivago.ch Hotelclub.com Kiwicollection.com Lastminute.com Grandluxuryhotels.c

om

Venere.com Kayak.com Travelocity.com Getaroom.com Priceline.com Orbitz.com Cheaptickets.com Hrs.com Agoda.com Hotelplanner.com Fivestaralliance.co

m

Hoteltravel.com Wego.com Myboutique.com Hotelscombined.com Hotels.uk.com Novelahotels.com A-london.eu Alpharooms.com Galahotels.com Traveltura.com Letsbookhotels.com Lhw.com

MARKET ANALYSISBVLGARI HOTELS & RESORTS LONDON

TARGET MARKET Business travellers, Corporates, Leisure travellers from Upper & Upper middle class society

RATE STRUCTUREBest Available Rate & Breakfast

Inclusive

PRICING STRATEGYSkimming

POSITIONINGLuxury Hospitality Market

THE RITZ CARLTON LONDON

TARGET MARKET Business travellers, Corporates, Leisure travellers from Upper /Upper middle & Middle class

society

RATE STRUCTUREBest Available Rate, Breakfast Inclusive, Putting on the Ritz

Rate, Ritz Romance Rate, Experience William Kent Rate,

Suite Dreams Rate, Suite Delight Rate

PRICING STRATEGYSkimming & Penetration

POSITIONINGLuxury Hospitality Market

(Wider)

WHAT’S HAPPENING IN LONDON ?30th Jan 2014 – THE VAULT Festival (6 weeks) Urban

food, Dancing, Drinks, Cultural Shocks

11th Feb 2014 – TAILOR SWIFT Concert

14th Feb 2014 – Valentines Day

20th Feb 2014 – VIVALDI - Candle light concert

5th April 2014 – Prince IGOR Opera

10th Apr 2014 – The Royal Ballet, Winters Tale at Royal Opera House

Rates Fluctuate on these dates increasing the revenue of the hotels.

Bvlgari London Daily Room Rates

£300.0£500.0£700.0£900.0

£1,100.0

Bvlgari - Deluxe RoomHotel WebsiteBooking.comExpedia.com

£0.0

£500.0

£1,000.0

£1,500.0

£2,000.0

£2,500.0 Bvlgari-Suite Room Deluxe 1 King

Hotel WebsiteBooking.comExpedia.com

The Ritz London Daily Room Rates

£100.0

£200.0

£300.0

£400.0

£500.0

£600.0 The Ritz London-Deluxe King

Hotel WebsiteBooking.comExpedia.com

£200.0£700.0

£1,200.0£1,700.0£2,200.0£2,700.0

The Ritz London-Deluxe Suits

Hotel WebsiteBooking.comExpedia.com

Bvlgari London Daily Rates For 11th Of April

400

500

600

700Bvlgari-Deluxe Room

Hotel WebsiteBooking.comExpedia.com

£400.0£450.0£500.0£550.0£600.0

Bvlgari - Suite Room

Hotel WebsiteBooking.comExpedia.com

The Ritz Carlton Daily Rates For 11th Of April

£200.0

£700.0

£1,200.0

£1,700.0The Ritz- Deluxe Suit

Hotel websiteBooking.comExpedia.com

£200.0

£400.0

£600.0

£800.0

The Ritz Deluxe King

Hotel WebsiteBooking.comExpedia.com

MEAN ABSOLUTE DEVIATION (MAD) FOR THE RATES OF EACH HOTEL

Hotel Bvlgari Deluxe Del. Suite The Ritz Del The Ritz Suite

MAD 23.84 41.78 77.95 210.22 2.09 12.84 50.93 58.78

Average 545.35 627 573.51 2087.83 556.13 423.8 1381.38 1030.88

MAD as %

4.37% 6.66% 13.59% 10.07% 0.38% 3.03% 3.69% 5.70%

RECOMMENDATIONSLargely present in a number of OTA’S but has to be coupled with similarities in the rates so that there is no loss of revenue.

BVLGARI LONDON: Must increase no. of rooms & room types – Cover a

wider market Speedy Renovations & Specialty Cuisine Restaurants. Promotions to increase Wedding & Events Revenue

RITZ CARLTON LONDON: Focus on Currency Exchange Rates to Expand Foreign

Markets Specialty Cuisine Restaurants to cater to growing

demand.

REFERENCES http://www.mbaskool.com/brandguide/tourism-and-

hospitality/2173-ritz-carlton.html http://www.mbaskool.com/brandguide/lifestyle-and-retail/

3405-bulgari.html https://en.wikipedia.org/wiki/Ritz-Carlton_Hotel_Company https://en.wikipedia.org/wiki/Bulgari http://www.docstoc.com/docs/50540615/Marriott-

International-Inc-(MAR)---Financial-and-Strategic-SWOT-Analysis-Review

http://writepass.com/journal/2012/12/strategic-analysis-swot-pestel-porter-of-premier-inn-whitbread-plc/

http://www.bulgarihotels.com

https://www.yourreservation.net