For a long period, the HarbourSide Hotel in Sydney, Australia has been struggling with the challenges of low profitability, and this has become a significant threat to the company’s survival. Since the year 2000, the HarbourSide Hotel has consistently registered a sharp decline in its profits. It is expected that this report will offer helpful insights by providing recommendations on what is needed to change the company’s fortunes in this industry. The SWOT, PESTEL and the Porters Five forces analysis tools have been used to gain a better understanding of The HarbourSide Hotel and other factors within the industry, which have contributed to a decline in its performance have been used. The report has depicted some services and facilities that are missing within the hotel that need to be established to improve on its customer’s attraction. Specific reasons which are attributed to the failures in this company have been mentioned. It has also suggested the particular measures that should be implemented at the HarbourSide Hotel to help in changing its situation.
The hotel and hospitality industry is rated among the fast changing in sectors in the global scene; this is because many of its consumers are out seeking for new experiences than ever. For that reason, this industry has become more competitive as new players with better strategies are joining the market. On the other hand, the existing companies are also forced to adjust their systems to comply with the current demands in the industry. Following the high intensity of competition in the hotel industry, companies which are unable to meet the current standards and consumer expectations are forced to exit the market. The HarbourSide Hotel in Sydney, Australia is one such company in the Hotel and Hospitality industry that is currently struggling to survive in the Industry. Since the year 2000, the HarbourSide Hotel has consistently experienced a sharp decline in its profitability, and this situation has progressed to become a significant exit threat to the company. The given report is therefore intended to provide the most effective recommendations that will help in restoring the hotel’s profitability by considering its present situation in the market.
To gain a better understanding of The HarbourSide Hotel and other factors within the industry which have contributed to a decline in its performance, I applied the SWOT, PESTEL and the Porters Five forces analysis tools. The Swot analysis was used to help in discovering the strengths, weaknesses, opportunities and the possible threats at the HarbourSide Hotel. The PESTEL analysis tool helped in determining the critical macro-environmental factors that have affected the performance of the company (Issa, Chang & Issa, 2010). Besides the SWOT and PESTEL analysis tool, I also applied Porter’s five forces analysis to find out the significant internal factors which are influencing the performance of the HarbourSide Hotel. To come up with a clear picture of what had contributed to the Company’s poor performance and the magnitude of its effects, we also went through some of the financial records at HarbourSide Hotel as well as the customers’ records and organization’s activities and decisions. HarbourSide Hotel customers will also be issued with copies of survey materials to assist in finding out some of the areas that need to be addressed to increase their satisfaction with the quality of services offered at the hotel.
The hotel lacks a modern gymnasium and health club to serve the needs of its customers who are more conscious about their body fitness. For this reason, the customers are forced to go to the nearby gymnasium and health club where they are charged expensively for the services. Since the majority of HarbourSide Hotel have got their gymnasiums and health clubs which the customers are allowed to use without making any extra payments. Many of the HarbourSide Hotel customers are forced to shift into the hotels where they can access the facilities without being required to make additional payments for the services (Callan, 1998). HarbourSide Hotel also lacks a car parking facility for its customers. Instead, the customers are expected to pack their cars in the nearby public car park which is located at a distance of about four minutes’ walk from the hotel. Even though the hotel covers the parking services, most customers prefer parking their cars near the places where they stay for safety purposes. Moreover, some customers such as physically challenged individuals find it so hard to walk for longer distances from the areas where their cars are parked. It is for this reason why some customers would prefer making their bookings in the nearby hotels where they are allowed to park their vehicles within the facilities where they are accommodated.
The dining services offered at HarbourSide Hotel is not operational over the weekends, and this denies some of their loyal customers the opportunity to utilize such faciliti8es whenever they need to use them. This happens especially over the weekends when most people are free from work and need to spend time out with their loved ones. The la carte restaurant in HarbourSide Hotel remains closed on Sundays and Mondays. The roof Carvey restaurant remains entirely closed on Fridays, while the Rooftop Piano Bar is closed on every Sunday and Saturdays. Closing the restaurants during some parts of the week, therefore, denies the customers access to vital services (Webb & Schwartz, 2017). Due to the unpredictable nature of restaurant services at HarbourSide Hotel, most of the consumers prefer going to the other alternative hotels where they can access all the functions of their choice at any time of the week.
HarbourSide Hotel has consistently registered a decline in its profitability. The declining profitability can be attributed to the nature of their services. Most of the loyal consumers have shifted their preference to the other nearby hotels and restaurants which offers more competitive services and addresses all their needs and matches their choice (Pavia, & Floričić, 2017). In spite of the growing competition in the hotel and hospitality industry, HarbourSide Hotel has failed to adjust its services to meet the current standards by addressing all the emerging trends and consumer needs in the industry. Since the year 2000, the company has been recording low turnouts of room bookings, the low sale of foods and beverages and this has culminated into total decline in its profitability.
Table1: Harbor-Side Hotel profitability from the year 2000 to 2003
Addition of a conference center. The creation of a conference facility at the HarbourSide Hotel will help in addressing a major concern at the hotel. For so many years the company has lost so many lucrative deals to their rivals in the industry because they are not able to offer a modern conference facility within their premises. The conversion of the banqueting room into a conference hall had resulted in dissatisfaction among the customers due to the room’s décor, lighting, and seating. As a consequence, the company had lost a number of its customers to its rivals. Even though it is necessary that a modern conference facility should be created at HarbourSide Hotel, the banqueting services should not be eliminated at the expense of building a conference facility (Pereira-Moliner et al., 2016). HarbourSide Hotel should, therefore, consider constructing a new modern conference facility within its premises. If the Banqueting area is refurbished into a conference center, then another room should be converted into a banqueting space.
HarbourSide Hotel should explore the marketing option as a means of popularizing its services to the consumers and improving its occupancy. However, HarbourSide should not consider subscribing to the services offered by the Southern Comfort hotel marketing cooperative and reservations. Instead, HarbourSide should consider deploying the use of available modern marketing strategies as they are more effective, cheaper and more efficient (Kiang, Raghu & Shang, 2000). If the company hires the services of the Southern Comfort marketing, they will be forced to cater to substantial service fees without any assurance of its effectiveness. HarbourSide Hotel should, therefore, consider putting its adverts in some of the local and international media stations in Australia as they are more effective and can cover greater areas (Jeffrey, D., Barden, R. R., Buckley, P. J., & Hubbard, 2002). The company should also adopt the use of an online marketing strategy to take advantage of the many internet consumers by posting its services in various social media platforms.
The company should also use the existing technology to improve its reservation system. The company should create a website where their consumers can book for the services online without having to make an actual appearance at the hotel to secure rooms. The online booking method is more efficient as the customers will spend less time and energy while ordering for the services of their choice. Moreover, it will also reduce the cost of hiring a room to make reservations.
The construction of extra rooms at HarbourSide Hotel will help in expanding the capacity of the hotel, and this will be beneficial as all the customers will be able to get accommodation during the busy seasons of spring and autumn. If the HarbourSide Hotel will be able to accommodate more people within its facilities, then it is more likely to increase its profitability, and this can help in turning the fortunes of the company. The new rooms should, however, be made in such a way that they are up to the current hotel standards.
All the rooms at the HarbourSide Hotel should be refurbished and upgraded to modern standards. Renovating the hotel will improve its appearance, and this will make it more attractive to the consumers. Upgrading the hotel rooms will also allow HarbourSide Hotel to address all its consumers’ needs and hence the company will be able to compete favorably for the consumers in the market (Kirima, Makopondo & Mutungi, 2017). For a very long time, some of the customers have been forced to seek for better hotels with claims that HarbourSide rooms are ancient and too uncomfortable for the occupants. Creating the suites within the facility will allow the HarbourSide to address all its customers’ needs.
The addition of health and leisure facilities at the hotel will make it more attractive and preferable to many consumers. According to the new trends in the hotel industries, most consumers prefer being accommodated in hotels where they can access all the leisure and health facilities. If HarbourSide considers creating such facilities within its premises, then it will be in a position to attract many customers, and this will help in boosting its performance (Crotts, Mason & Davis, 2009). Besides, it will measure guest satisfaction and competitive position in the hospitality and tourism industry. The presence of these facilities will also improve the hotels marketing advantage. Moreover, being acquainted with such facilities will save its customers from parting with extra cash in paying for the services which are offered by the independent operators.
Implementing the option to Re-design the beverage and food outlets will help in improving the turnouts in the respective departments. Refurbishing this outlet will make them more attractive and pleasant, and hence the customers will be able to get exciting experiences while spending time at the HarbourSide Hotel. The ability to acquire exciting experiences will attract more consumers at HarbourSide Hotel, and this will help in changing the fortunes at the facility as the increasing number of customers will increase the sales at the hotel (Tarrant, 1989).
HarbourSide Hotel should acquire more space next to its facilities to be used as the parking space for its customers as this will make it more appropriate for the customers who would not like to be far from their cars.
The hotel should establish its leisure and health facilities within its premises. Creating leisure facilities such as swimming pool, saunas and gymnasium will attract more customers into the HarbourSide Hotel. Moreover, by offering such facilities, the customers will be relieved of parting with extra cash while accessing such services from the independent providers.
HarbourSide Hotel should refurbish its hotel rooms and upgrade them to the modern standards as most consumers are seeking for exciting experiences within the hotels where they are accommodated. Due to the presence of old rooms at the HarbourSide Hotel, most of its customers are forced to seek alternative services from its competitors. The refurbished rooms will also give HarbourSide Hotel a marketing advantage as most customers will be attracted by the excellent site of beautiful places and food outlets.
HarbourSide Hotel should extend its dining services to be operational throughout the week as this will ensure that the customers are assured of accessing the services at any time of the week. Moreover, most of HarbourSide Hotel restaurants are not operating over the weekends and therefore extending the services will enable the company to take advantage of the customers who prefer spending their time out over the weekend.
The company should create a modern conference hall which is equipped with all the necessary facilities. If HarbourSide Hotel has a conference center, it will be able to host seminars within its facilities, and this will prevent the company from losing some of its customers to the other hotels which are equipped with such facilities. The conference center will bring extra income to the organizations as they will also be hired to offer additional services such provision of food and beverages as well as accommodation to the participants in the seminars.
HarbourSide Hotel should take advantage of the existing modern technological abilities in marketing its services in the market. The implementation of contemporary marketing strategies such as online marketing will increase the popularity of the hotel in both the local and international market. Other forms of marketing such as using the media stations for advertisement should also be adopted to help in creating awareness towards the services offered by HarbourSide Hotel. HarbourSide Hotel should also introduce online reservation criteria to allow its customers to make bookings for accommodation and other functions within the hotel facilities.
The company should construct more rooms to expand its capacity so that it can be able to accommodate more people especially during the high seasons of spring and autumn. Many times HarbourSide is forced to reject some of their customers because it lacks enough rooms to accommodate the high number of tourists who visit Sydney during the autumn and spring season. Expanding the facility will, therefore, increase the number of customers who are accommodated and this will increase its profitability. Adding more suites into the hotel will ensure that the needs of all customers are addressed.