Environmental Analysis Paper Essay
Environmental Analysis Paper
Hospitality is one of those lines of business paths that are widespread. In Australia, Brisbane hotel provides a broad assortment of properties-budget, trade, tourist, lavishness, bed and breakfasts and apartments lodging. Moreover, Holiday City Brisbane hotels offer comfort, excellence and enormous worth for the money, perfect for leisure time and commerce travelers. This paper seeks to examine the environmental analysis of Brisbane hotel in Australia. (Higham, 2005, p. 98) 1. Industry Analysis On the foundation analysis unaccompanied, Brisbane market appears to be a suitable market for an augment in lodging supply.
On the other hand there are a number of other considerations such as access to capital, augmented building and labour outlay. (Addis, 2006, p. 103) Brisbane is situated on the eastern coast; it is the capital of Queensland-Australia’s head of state tourist area. It is Australia’ best ever growing city region in South East Queensland and occupies 1,140 square kilometers. (King, 1997, p. 88) For a property shareholder, a significant indicator of hotel viability will be value versus building cost. Hotel values have not kept rate with the enlargement in building costs.
Hotel values sky rocketed in 1997 before moribund to a cyclical low of $161K per room in 2001. Building costs on the other hand have augmented each year, moribund only marginally in 2001 in reaction to the worldwide financial downturn. (Garling, 1991, p. 100) The low point of hotel values were 62 per cent of building costs and even as they have augmented by around 10 per cent per annum over the last five years double the rate of building costs, the expansion gap is still 20 per cent at present. This gap will differ across the cities of Australia.
(Kohen, 1995, p. 90) The porter’s five forces model is a straightforward tool that supports premeditated understanding where authority lies in an industry situation. It also helps to comprehend both the strength of Brisbane existing cutthroat position, and the potency of a position Brisbane is in search to move into. Regardless of the fact that the five force structure focuses on commerce concerns rather than community policy, it also emphasizes comprehensive rivalry for value to a certain extent than just competition amongst existing rivals.
(Freeland, 1968, p. 115) The innovative cutthroat forces model as projected by Porter acknowledged five forces which would impact on an organization’s performance in a cutthroat market. These include the following: (Swaffer, 2002, p. 102) i) The Degree of Rivalry The degree of rivalry, which is the most noticeable of the five forces in the hotel industry, helps decide the extent to which the value fashioned by a business will be dissolute through head to head contest. (Cunill, 2006, p.
78) Perth has overtaken Brisbane as Australia’s number one hotel bazaar after having strengthened its bazaar leader position all through each quarter during 2007 to record the uppermost Revenue Per Available Room (RevPAR) expansion, highest ADR expansion and uppermost tenancy result (82. 5%) for the full year. (Richards, 2006, p. 120) Hotel section analysis in the three main markets of Sydney, Melbourne and Brisbane reveal that 5-star hotels are driving the sturdy bazaar performance.
All the three cities recorded twofold figure RevPAR expansion during 2007 which is higher than the lower-tier segments. (Jamieson, 2006, p. 115) ii) The Threat of Entry Both the prospective and obtainable competitors influence standard business productivity. The threat of new entrants is frequently based on the bazaar entry barriers. They can take varied forms and are used to avert an influx of firms into a business at any time profits attuned for the cost of capital goes up above zero.
(Higham, 2005, p. 104) The most widespread forms of entry barriers include: economies of scale, cost of entrance such as investment into expertise; distribution channels such as ease of admission for competitors; cost compensation not connected to the size of the corporation and government legislation. (Swaffer, 2002, p. 105) In a cutthroat market, all firms fabricate a standardized product. This means the goods presented by a variety of sellers are mainly identical.
Since competition is based exclusively on the price, and the merchandise is homogenous, it then follows that buyers will buy from whoever’s product is cheapest, and this is also applicable in the hotel industry in the sense that tourist will choose to check inn to a hotel which they are comfortable with the price; therefore each producers is requisite to take up the least-cost method of fabrication and all surplus profits and losses will in the long run be abolished by entrance to, or exit from the business. (Addis, 2006, p. 108)
Australia is in threat of becoming a lattice exporter of tourists in 2008 as strong expansion in outbound travel outpaces inbound tourist arrivals. The recently released Australian Bureau of Statistics (ABS) Overseas Arrivals and Departures data reveals that arrivals have exposed some revival in the primary two months of 2008 (up 1. 7%), outbound travel has augmented by a staggering 14. 5%. (King, 1997, p. 94) The major competitor of Brisbane hotel is Sydney. However this was in the past. Sydney attracts a broad range of commerce events, and these proceedings tend to be larger than regular.
Whereas the National Business Events Study (NBES) establish that New South Wales hosted 27 percent of the entire meetings in Australia in 2003, this represented 40 percent of the entire delegates. In terms of standard occasion size, Sydney hosted the biggest proceedings (roughly 162 delegates per event), followed by the Gold Coast (102), Melbourne (96), Adelaide (92), the ACT (89) and Perth (80). (Jamieson, 2006, p. 123) Nevertheless, this position is being windswept as other States are attracting an escalating percentage of intercontinental trade proceedings delegates.
Queensland is to some extent differently positioned. Because of its chief coastal resort cities, it has key conference amenities at Cairns and the Gold Coast, as well as Brisbane. When these three locations are taken jointly, it reveals that in the mid-nineties they jointly held only about half as numerous meetings as Sydney. Ever since, their position has augmented considerably and in the epoch 2003-2005 they held about as several meetings as did Sydney. (Swaffer, 2002, p. 110) iii) The Threat of Substitutes
A threat from substitutes exists if there are substitute products with inferior prices of improved performance parameters for the equivalent function. They could potentially draw a momentous proportion of bazaar volume and for this reason reduce the possible sales volume for existing troupe. This category also relates to balancing products. The threat of substitution is also influenced by switching costs such as retraining, retooling and redesigning that are incurred when a consumer switches to a dissimilar kind of product or service. (Higham, 2005, p. 111)
Brisbane hotel faces the barricade of cost of setting up such as renting or owning building and licensing faced by new-fangled entrant. Even though firms in a monopolistically cutthroat market do face a low barrier to entry, the firms vend differentiated products, therefore causing new-fangled firms harder to be recognized. For example; Pier Nine Oyster Bar and Seafood Gril in Brisbane is a well-liked seafood restaurant. It then follows that a new seafood restaurant may have intricacy attracting clientele because of Pier’s recognized reputation. (Addis, 2006, p. 114) iv) Buyer Power
Buyer power is one of the two level forces that control the misappropriation of the value fashioned by Brisbane hotel industry. The most imperative determinants of buyer power are the size and the attention of clientele. Other factors are the degree to which the buyers are well-versed and the attention of the competitors. (Jamieson, 2006, p. 130) Brisbane hotels come in all the shapes and sizes one would expect from Australia’s third biggest city-the enormous names like Hilton, Marriott and Sheraton are all there, all along with loads of self-governing establishments which vary from extremely quirky to absolute dirty.
Similar to any bed where you relax your head, you acquire what you disburse for. Moreover, at the cheaper end of the range, a flawlessly contented room in an essential visitor hotel in the heart of the city like the Nomads will place you back about $80 a night at reserve rates, whereas a two bedroom suite in the historical 5 star Conrad Treasury Casino will cost you roughly $220 if you are looking less than two weeks ahead-which is fairly of high-quality for a five star hotel. (King, 1997, p. 101) v) Supplier Power
This is a reflect icon of the buyer power. As an end result, the examination of supplier power characteristically focuses primary on the relative size and attention of suppliers comparative to commerce involvement in the inputs supplied. (Garling, 1991, p. 107) The aptitude to charge clientele different prices in line with differenced in the value fashioned for each of those buyers more often than not indicates that the bazaar is characterized by high dealer power and at the same occasion by low buyer power.
(Kohen, 1995, p. 97) Brisbane hotel is an outstanding example to other main hotel markets in the steady preamble of new supply, as opposed to gesticulate of new-fangled hotel developments flooding the bazaar once the market conditions become encouraging. A slow but stable flow of new stockpile goes a long way towards sustainably increasing the market without causing occupancies and revenues to fall. (Cunill, 2006, p. 91) 2. External Stakeholders and Broad Environment External stakeholders
These encompass real land agents, state visitor offices, developers, financiers, body business service providers, hotels with a strata title attention and administration human rights brokers. (Swaffer, 2002, p. 118) The assortment of community schemes is echoed in the range of lawmaking schemes that subsist across Australia. One of the basic differences across jurisdictions is the terms and lawful jargon used to explain key features in Brisbane hotel. This difficulty poses realistic problems for stakeholders in general and for practitioners who are required to function athwart state boundaries.
(King, 1997, p. 117) Broad Environment This consists of four significant factors such as current social forces, global economic forces, global political forces and technological innovations. (Garling, 1991, p. 114) i) Current social forces Given that travel was a requirement for numerous workers at the turn of the century, it then follows that homosexuality action in countryside contexts and urban public spaces was inextricably associated. The features of superior population areas, clear in Brisbane hotel and larger local areas were also noticeable in lesser urban settlements.
(Higham, 2005, p. 116) ii) Global economic forces Australia’s four principal city lodging markets enjoyed a record year of tenancy levels in 2007, with the outlook for 2008 being evenly as optimistic in spite of far from ideal national and worldwide market circumstances. (Kohen, 1995, p. 101) Australia Bureau of statistics (ABS) data released for the full year 2007 shows that for the initial time the internal city hotel bazaar of Brisbane has achieved tenancy levels over 80% averaged all through the year.
This performance underscores Australia’s confrontation to the universal monetary slowdown as trade travel remains burly. High occupancies are also a side-effect of the capital boom, which is supporting Brisbane hotel markets as local centres for these resource-based state economies. (Addis, 2006, p. 122) With continuous expansion in accommodation demand, thanks to affluent economic environment and sturdy market essentials, Australia’s chief city markets of Brisbane will see occupancies linger high and proceeds increase. (Garling, 1991, p. 119)
The majority multicultural cities are Melbourne and Sydney. Both cities are well-known for the diversity and quality of universal foods available in their many restaurants, and Melbourne particularly promoted itself as a hub for the arts therefore posing a threat for Brisbane hotel in Australia. (Jamieson, 2006, p. 134) iii) Technological innovations True commerce innovation does take place through a variety of mechanisms such as commerce strategy, organization practices, procedure alteration, and assets investment in new-fangled plant and equipment.
To be familiar with this, the Australian Bureau of Statistics (ABS) by now has events of technological innovation. (Cunill, 2006, p. 103) iv) Global political forces The worldwide hotel business recorded optimistic growth in standard daily rate and proceeds per obtainable room for the month of July 2008; this is according to the statistics from Smith Travel Research (STR). Moreover, fashion hotels are an element of a speedy development in the market for lavishness recognized customer products. This was incorporated prior to the political situation that arose in Australia. (Higham, 2005, p.
121) 3. Factors that Influence the Sector’s demand and cost structures i) Technological innovation This has debatably been the leading factor in determining fiscal services of Brisbane hotel in the past two decades. Systems for dealing out, communicating and sturdy information are an indispensable element of the infrastructure sustaining fiscal activities. (Kohen, 1995, p. 112) Technology has connected markets around the globe and opened cross-border delivery of both wholesale and retail fiscal products. This has created a competitive advantage to Brisbane hotel in Australia.
(Freeland, 1968, p. 119) ii) International Integration This has resulted prior to technological advances and as a result there has been a rising tendency towards international integration amongst financial markets. In numerous areas of the Australian bazaar, predominantly those connected with across-the-board funding, international markets have replaced home markets as the main source of finance. A result of globalization is that competition between fiscal service providers occurs internationally to a certain extent than at the state or local level.
Globalization has spawned a production of institutional shareholders who control huge portfolios and have particular loyalty to products and state marketplace thus boosting Brisbane hotel financial status. (Swaffer, 2002, p. 125) iii) Changing customer needs Markets developments have also been fashioned by changing customer needs. In Australia, the most clear of these has been the enlargement of enforced superannuation and the accompanying enlargement in the finance administration business.
This has resulted to Brisbane hotel modifying their products and services so as to satisfy the customer since the customer is the king. (Freeland, 1968, p. 121) iv) New Entrants These factors have encouraged new-fangled entrants and innovative ways of doing business. For instance, unlike a decade ago, hotels and construction societies are at present extremely aware of the competition that they face from securitizes. This has made Brisbane hotel and other industries formulate strategies of dealing with new entrants. (King, 1997, p. 126) 4.
Strategic Issues facing Organizations in hotel sector i) Location Brisbane is a low-lying terrain mass positioned in a floodplain. Nevertheless, this has worked to the benefit of the hotel. Brisbane is located along the Brisbane River and is neighboring to the Great Dividing Range and the Moreton Bay. This has generated a lot of income since it serves as a tourist attraction base. (Garling, 1991, p. 122) ii) Climate Geologically, Brisbane hotel is situated contentedly in the State’s Southeast corner, at the oceanfront of the Pacific Ocean to the east.
Because of this, it then follows that many inhabitants and vacationers from Melbourne and Sydney come over and expend winter in Brisbane thus boosting the hotel’s revenue. (Higham, 2005, p. 128) iii) Events and Festivals Several events and festivals have also boost up tourism in Brisbane hotel. For instance; Brisbane River Festival is usually held in the middle of September every year. In addition to this, Brisbane is becoming a well-liked sports destination in all of Australia and not just in Queensland.
It has previously hosted the Commonwealth Games and Rugby World Cup and still hosted a number of events for the 2000 Sydney Olympic Games. This has generated a lot of income for the Brisbane hotel. Moreover, Brisbane is proposing to support and hold the 2024 Olympics. This will generate the country lots and lots of revenue. (Jamieson, 2006, p. 136) Conclusion The event trade in Australia continues to thrive and events are more and more viewed as vehicles for the facilitation of local growth.
Regions may be fashioned for various reasons, counting economic purposes, and debatably such economic purpose will decide the most suitable set of local restrictions, the types of local organizations that will be established and the kinds of local policies and programs that will be implemented. Moreover, technological innovation, international integration, changing customer needs and new entrants have contributed towards the hotel formulating strategies in order to satisfy their customers and as a result Brisbane hotel has maintained a competitive edge thus earning profitable foreign exchange from the tourists.
University/College: University of Arkansas System
Type of paper: Thesis/Dissertation Chapter
Date: 3 February 2017
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