MANAGEMT 7064 Advanced Marketing : Innovation in the Tourism Industry

You are to create a formal marketing report on this topic. The word count relates to the formal report excluding the Executive Summary, Reference List and you may include a number of Appendix to support claims or give details. You are to be a consultant providing this report to the TFE Board of Directors to advise whether they should proceed in expanding to New Zealand and if so, what city.TFE Hotels is a major international hospitality company in a venture with Toga Hotels and Far East Hotels. View www.tfehotels.com The parent company has a number of hotel brands. You are to choose EITHER Medina Self Contained Apartments OR Vibe Hotels. Do not choose other TFE brands.

You must research New Zealand as a potential market for your chosen brand.

Choose ONE of these brands:

• Medina Self Contained Apartments OR
• Vibe Hotels

Each brand has quite a different set of target markets. In your analysis consider the target market and opportunity for growth or decline in tourism and hospitality in New Zealand. You may elect to focus on one city or one region. You are to consider competitors and both domestic travellers and international tourists or business personnel if applicable. A guide to this assessment piece will be covered in class and a resource will be available on the LCB site.

Answer:

Introduction:

The report is regarding the marketing strategies of TFE Hotel to expand its business in New Zealand. The brand is known across Australia for its different brands providing distinguished services to its client. In order to expand business function in New Zealand the company needs to adopt differential market strategies. In the era of globalization when every company is planning to invest in other countries it has become important to place strategies in an effective manner. TFE Hotels is known across as a hotel chain providing effective services as per the budget of the customer. The marketing and expansion plan include all the facilities a company focus upon in order to attain high value in coming time (Hall, Timothy and Duval, 2012).

This is important aspect in an organization expansion policy to evaluate all the necessary features to be implemented in the project. The purpose of the report is to express expansion in New Zealand Tourism is the largest export industry in terms of earning foreign exchange. Moreover this industry provides employment to7.5 percent of the total workforce (Butler and Hinch, 2007). There are ample of opportunities for TFE Hotel to establish one of their brands in order to attain a significant market standing. It therefore needs to re-emphasize on the policies in order to implement significant changes as per the current market requirements. The report is based on Medina service apartments- one of the famous brands of TFE Hotels.

Company’s Overview

TFE Hotels is a joint venture in between Toga Hotels and Far East Hospitality. It is known to be one of the leading hotel operators in all over Australia, New Zealand and Europe. The hotel chain is a combined of two major hospitality unit providing extremely innovative facilities. It has a potential of a greater operational efficiencies across the globe. It has a portfolio of over 65 properties in Australia, New Zealand and Europe.  TFE is known for providing the services through following brands (Company Profile, 2017):

• Adina Apartment Hotels


Medina Serviced Apartments
Rendezvous Hotels
Vibe Hotel
Travelodge Hotels
Hotel Kurrajong Canberra

These brands are providing world-class services depending upon the requirements of travelers. They include hospitality services depending upon the requirements of various customers. They provide with the accommodation needs depending upon the needs of the customers. They have a specialization in putting forward the best that they could provide within the estimated budget of the customers. TFE Hotels have a plan to expand their business in coming years to new countries. This will help them to develop a huge market name not only in one country but at different places (Scott, et al. 2008).

Medina Serviced Apartments

Medina service apartments are a famous brand of TFE Hotels for last 30 years. These service apartments are promising enough to meet the requirements of the customers who are looking for an apartment. They are providing with an accommodation which include one, two or three bedroom kitchen option. This depends upon the requirements of the customers. This option is a perfect fit for many people around the world. Each large apartment is agreed with a variety of modern and well-designed features that includes fully prepared kitchens and comfortable living spaces. This is also featured in lifestyle amenities and gardens for making an ideal choice for family holidays, business trips, etc (Medina, 2017).

Hospitality and Tourism industry in New Zealand

Tourism and hospitality industry is considered to be two of the most profit making sectors in New Zealand. It is directly employing near about 7.5 percent of the workforce (Bell, 2008). Tourism and Hospitality industry has ample of opportunities and challenges according to the changes in global business scenario. The demand of business in New Zealand’s tourism performance is driven by China and Australia (About the industry, 2016; Butler and Hinch, 2007).

The data given below need to be analyzed in order to understand the tourism and hospitality business contribution towards the economy;

• This sector creates more than 2, 00,000 jobs and generates 4.8 % of the GDP.
• This sector is constantly providing a part-time opportunity to people in New Zealand. This is contributing in fulfilling the vital role in working life.
• This sector has a widespread reach as it is based on the life of local people. This is due to the high expectation of the people coming from different part of the world.
• The growth in this sector has been high over the last 14 years. It is projected that there will be an increase in the tourism sector in coming years (Industry Insight, 2016).  

The tourism and the hospitality industry are divided into 6 sectors:

• Air travel
• Accommodation
• Food and beverage
• Travel, tour and rental services
• Art and culture
• Sports and gaming (Hall and Sharples,2008)

These different sub sectors have helped in adding value to the economy in New Zealand.  All these sectors have created opportunities for business organizations. Hospitality and tourism industry is eventually adding value to the country’s GDP opening various avenues for people across border to explore the availed opportunities. Tourism is considered to be one of the most important industries for New Zealand creating ample of opportunities for the local as well as the expatriate. It is reported that the international tourist amounted to 16 percent of the total New Zealand export earnings (Morgan, Pritchard and Pride, 2007). There are immense domestic and international opportunities for people that is contributing NZ$24 billion every year. They have adopted clean and green travel policy that is helping them to grow eventually into a better place. The highest number of tourist arrives from Australia as per the report. It is important to notice that Australia amounts around 45 percent of the total tourists visiting New Zealand. Domestic tourists are equally important for New Zealand as they help in accelerating the tourism (Bentley, Page and Macky, 2007).

Hospitality industry

The performance of the New Zealand Hospitality industry is increasing with the time and creating a record for others. The record occupancy and room rates can be attained which directly depend upon the increasing level of competition. There is a continuous increase in the rate currently which will create opportunity for international organizations to open a venture. Though room rates are rising reasonably but they are reasonably less in international market. There are many new international hotel projects currently developing in New Zealand focusing upon unique facility. The hospitality industry has seen a major change in recent time. People are looking for variety of services and they are eventually ready to pay the requisite amount. In coming time there can be an increase in overall capacity due to an increasing pressure of international travelers. New project are developing in the country which is opening new avenues for many people (Riley, 2014). The GDP has increased due to tee contribution made by tourism and hospitality industry in the recent time (New Zealand Tourism and Hotel Market Oveview, 2016).

Viability of project

TFE Hotel is planning to launch Medina service apartments in New Zealand. These apartment services are promising enough to meet the requirements of the customers who are looking for an apartment. As per the recent changing scenario it can be witnessed that there is a necessity to introduce apartment services to meet the growing needs of people. This is due to the fact that the living standard of people is improving day by day. They are ready to make more expenditure on such services. Moreover there is an increase in movement of the tourist in New Zealand which is creating more feasibility for this project in Wellington. Recent time has seen movement of students for pursuing their career for which they require a fully furnished apartment. These apartment services therefore help in providing effective services.  These apartments are viable looking after the growing requirements of tourism in the country. Moreover it is seen as the procedure through which one can live in the manner they want to without any interference. These apartments are attaining popularity due to recent changes in the tourism and hospitality industry. In recent year there will be growing opportunities for other business to grow efficiently (Racherla and Hu, 2009).

TFE needs to promote this concept especially in Wellington. Being the capital of the country it has attained vast popularity in terms of business, leisure and lifestyle. It lies in the south-western tip of the north island. It I the major population center and comprises of differential climatic conditions. It is a well known city for trade and commerce. Wellington is known as one of New Zealand's chief seaports and provides both domestic and international shipping. This project will be feasible for Wellington on the following basis:

• It is suitable place for business and trade function
• This project will be suitable for those people who are planning to relocate
• This project will be suitable for those who are looking to have a long and independent stay.
• These accommodations will be economic for a long term stay.
• Fully furnished apartment will fulfill all the requisites within the necessity.

PESTLE Analysis of Tourism and hospitality Industry in New Zealand

The PESTLE analysis includes the business opportunity in New Zealand regarding Tourism and hospitality industry.  It is necessary to analyze the macro environmental factors before making any initiative in order to expand the business operations.

Political

New Zealand has a stable government system that has helped in attaining a long term success. They focus on effective implementation of policies on long run. They follow strong rules and regulations. The political change occurs in every three years and a new government is formed. The labor law is strict and the rate of employment is high. The lending rate in the country is every high. The foreign business organization has to pay more tax in order to settle a business. They have provided freedom in trade and commerce that has helped in attaining sustainable results. The hospitality industry is more effective due to implementation of rules and regulation by the government bodies (Mok, Sparks and Kadampully, 2013).

Economic

The economic condition of the country is good for the international business. The per capita income in the country is high. Both skilled and unskilled employees are easily available in the country. This will help in recruiting the most efficient employees in order to attain effective results. The inflation rate in the country is less and the unemployment is low. There is a positive sign in the economy in achieving effective GDP. The company can attain effective result as the tourism industry is already working effectively. Effective implementation of policies is necessary for TFE in order to attain desired market share (Aldebert, Dang and Longhi, 2011).

Social

The social system of the country is effective for carrying out a business in an effective manner. People are eventually spending more on attaining an effective balance of life. The literacy rate of the country is 100 percent. The government is giving a special preference to tourism and hospitality. There is a lesser unemployment rate due to less population. Economic condition of the country is better that has helped in attain sustainable result. Local population is spending on tourism that will help in attaining significant consequences (Buhalis and Zoge, 2007).

Technological

The country has made a significant development in the technological sector by continuously investing on research and development. The current government is looking for equipments that will be fruitful in terms of reducing the pressure on the ecological system. The country has witnessed a pressure from the International tourist in the recent years. This is causing a high amount of pressure in the internal system. Government is looking out for the different ways in order to reduce the pressure on environment. The modern facilities will however help them to reduce the amount of burden caused to them due to extreme pressure.

Environment factors

Environment is given social preference by the government. It is seen in the recent time that the country is adherent on passing strict rules and regulating in order to balance environment. It is seen that the country has recently focused on creating leadership by promoting clean and green energy. New initiatives are taken from time to time in order to keep the environment free from dust and pollution. The country has various species of birds and wildlife that need to be protected from extinction.

Legal factors

The government is changed in every 3 years and a new government makes new rules and regulation. The international policies for the companies promote tourism and hospitality industry. This has helped in seeking a sustainable position in the market against the competitors. The country has provided with the trade freedom in order to expand the business function. It is important to notice that the international business community has received a fully fledged cover to work without any fear.

Target market

The TFE group needs to focus specifically on the foreign customer. There is a steady increase in the number of foreign travelers. 45 percent of the tourist arrives from Australia. This has helped in creating ample of opportunities. These types of apartments are economic for those who are shifting from one place to other. Corporate bookings is an effective way through which company can earn sustainable profits

Competitors

There is different type of hotel brands already placed in Wellington as per the requirement of the tourist. TFE hotel should keep their price low to attract more tourists. They need to tie up with different online booking agencies in order to get international booking. The apartment concept will be good for the local and the international tourist. This will however increase the opportunities for the TFE group to expand their business functions (Lew, Hall and Williams, 2008).

Recommendations

It is recommended that the TFE group need to provide high class facility to its customers at a budgeted price. This will however increase their visibility not only physically but virtually as well. Infrastructure of the apartment need to be given more focus as this will help in attaining large amount of attention from the local as well as international tourist (Hall, Timothy and Duval, 2012). There should be a special discount at the time of tourist season in the initial years to attract more international tourist. Lastly it needs to increase social media visibility. This is one of the most important tools used by majority of business organizations to attract customer’s attention (Cabiddu, Lui and Piccoli, 2013).

Conclusion:

The report is based on implementation of the expansion policy of one of the famous brand of TFE Hotels in Wellington, New Zealand. . TFE Hotels is known across as a hotel chain providing effective services according to the budget of the customers. Medina service apartments are a famous brand of TFE Hotels for last 30 years. These service apartments are promising enough to meet the requirements of the customers. The report exclusively includes the amount of opportunity in hospitality and tourism industry. The industry has developed in the recent years. Tourism is considered to be one of the most important industries for New Zealand creating ample of opportunities for the local as well as the expatriate. The purpose of the report is to express whether the company’s expansion in New Zealand will be based on the strategies as implemented depending upon the hospitality and tourism business. PESTEL Analysis helps in analyzing the macro environmental factors that might affect the overall business. Recommendations are given are given at the end of the report that focus on suggesting necessity for change as per the global needs. It is reported that the international tourist amounted to 16 percent of the total New Zealand export earnings. Under such a situation it is desirable that the TFE Hotels need to focus on establishing a brand name in New Zealand.

References:

About the industry, 2016. Online. Available at: https://www.tourismnewzealand.com/about/about-the-industry/ Accessed on: 5 March 2017

Aldebert, B., Dang, R.J. and Longhi, C., 2011. Innovation in the tourism industry: The case of [email protected] Tourism management, 32(5), pp.1204-1213.

Bell, C., 2008. 100% PURE New Zealand: Branding for back-packers. Journal of Vacation Marketing, 14(4), pp.345-355.

Bentley, T.A., Page, S.J. and Macky, K.A., 2007. Adventure tourism and adventure sports injury: The New Zealand experience. Applied ergonomics, 38(6), pp.791-796.

Buhalis, D. and Zoge, M., 2007. The strategic impact of the Internet on the tourism industry. Information and communication technologies in tourism 2007, pp.481-492.

Butler, R. and Hinch, T., 2007. Tourism and indigenous peoples: Issues and implications. Routledge.

Cabiddu, F., Lui, T.W. and Piccoli, G., 2013. Managing value co-creation in the tourism industry. Annals of Tourism Research, 42, pp.86-107.

Company Profile, 2017. Online. Available at: https://www.tfehotels.com/about/company-profile Accessed on: 5 March 2017

Hall, C.M. and Sharples, L., 2008. Food and wine festivals and events around the world: Development, management and markets. Routledge.

Hall, C.M., Timothy, D.J. and Duval, D.T., 2012. Safety and security in tourism: relationships, management, and marketing. Routledge.

Industry Insight,2016. Online. Available at: https://www.westpac.co.nz/assets/Business/Economic-Updates/2016/Bulletins-2016/Industry-Insights-Tourism-March-2016.pdf Accessed on: 5 March 2017

Lew, A.A., Hall, C.M. and Williams, A.M. eds., 2008. A companion to tourism. John Wiley & Sons.

Medina, 2017. Online. Available at: https://www.hospitalitynet.org/brand/23000275.html Accessed on: 5 March 2017

Mok, C., Sparks, B. and Kadampully, J., 2013. Service quality management in hospitality, tourism, and leisure. Routledge.

Morgan, N., Pritchard, A. and Pride, R., 2007. Destination branding. Routledge.

New Zealand Tourism and Hotel Market Oveview,2016. Online. Available at: https://www.hospitalitynet.org/news/4076615.html Accessed on: 5 March 2017

Racherla, P. and Hu, C., 2009. A framework for knowledge-based crisis management in the hospitality and tourism industry. Cornell Hospitality Quarterly, 50(4), pp.561-577.

Riley, M., 2014. Human resource management in the hospitality and tourism industry. Routledge.

Scott, D., Amelung, B., Becken, S., Ceron, J.P., Dubois, G., Gössling, S., Peeters, P. and Simpson, M., 2008. Climate change and tourism: Responding to global challenges. World Tourism Organization, Madrid, 230.

State of the tourism industry list,2016. Online. Available at: https://tourism2025.org.nz/making-it-happen/state-of-the-tourism-industry/ Accessed on: 5 March 2017