Napa Valley College Hospitality Tourism Management Program

Hospitality & Tourism Management Program BUSI 298B Principles of Hotel Administration Napa Valley College February 21st, 2008 Tonight’s Highlights  Review of Strategy, Alignment and Adding Value  Environmental Assessment: Conceptual Tools  Chapter 5 Lecture Summary – Strategy, Alignment and Adding Value “The major forces driving change in the hospitality industry are capacity control, technology, assets and capital, new management and safety and security, social responsibility and sustainability.” Competing for the Future  Visioning the future is the ability to understand how the business environment provides opportunities and threats.  Managers must have the ability to think about the future by expanding their perceptual frameworks. Questions about the future  How will the guest be traveling in the future?  How will the guest be communicating in the future?  How will the firm’s products and services be distributed to the guest in the future?  What new benefits will be needed to meet future demand?  What competencies will be needed to serve the guest in the future?  What standards will be accepted in the future?  What will a successful hospitality firm look like?  What new competitive methods will demand the majority of your resources? In today’s increasingly complex business environment, firms must be at the cutting edge of change. Four challenges facing the manager of the future 1. The need to identify forces that drive change through robust scanning efforts 2. The ability to understand and estimate their timing 3. The capability to estimate the impact they will have on the firm 4. The ability to make wise investment decisions that reflect the successful meeting of the first three challenges in this list Concepts of the Environment  Perception is reality!  Interpreting the world based upon the mental image we develop regarding our word  Emotion rather than objectivity controls how the environment is viewed and the subsequent decisions made as a result of this view.  Strength of cognitive skills (awareness, judgment and reasoning) Concepts of the Environment  Environmental Dimensions: 1. Uncertainty = “the degree of change in the environment and the rate of that change” Measured as stable to very volatile 2. Complexity = “the number of different variables impacting the business” 3. Munificence = “the amount of potential capacity for growth that exists in an industry environment” – the less the munificence in the environment, the more unforgiving it becomes. Major issues in understanding the environment  The quality of information  The uncertainty of the cause-and-effect relationships that exist  Greater use of thought processes and cognitive skills.  Greater use of concepts and frameworks to aid in understanding the complexities Identifying Forces Driving Change  Scanning the business environment: 1. Identify each force, the variables (value drivers) making it up and their interdependencies with other variables 2. Suggest cause-and-effect relationships 3. Determine the history and timing associated with the development of the forces 4. Assist the manager in estimating the impact of forces driving change on the company Identifying the Events in the Environment  Environmental Scanning (SCIP) 1. Domain Definition (geographic market area, segment defined by competitive methods, primary competition, major descriptors of target market) 2. Organizational Structure Issues (who is to participate and what resources are allocated to this endeavor?) Identifying the Events in the Environment  Environmental Scanning (SCIP) 3. Determining Information Needs Four categories: quantitative, qualitative and personal & non-personal (secondary) sources Determining the Information Medium Assessing the Timing of Information Identifying Sources of Information – Select sources that are reliable and valid. Environmental Scanning  4. Choose Scanning Activities – null, reactive, non-routine, routine and proactive. Top Three Sources: Wall Street Journal Business Week Economist Information Sharing, Feedback and Evaluation  Setting up the appropriate system to share feedback  Operations – Functional – Executive External Case Study: Lily Pad Hotels – Harvard Business  The Corporate Brand – Help or Hindrance?  20 year old company  12 boutique hotels and resorts worldwide – 1500 rooms and 115,000 unique guest visits annually  Maritime Hotel – Flagship, started as a abandoned counting house in SF  Most customers did not visit other properties when in the area  Did not know their hotel was part of a collection  Two sources of growth – sign up new properties or improve occupancy and cross-sell rates of existing units. BREAK