Business Development: Empire Hotel Hong Kong


 


Empire Hotel Hong Kong


            Empire Hotel Hong Kong is one of the popular 3 star hotels in Hong Kong. The hotel boasts its high-end facilities and amenities. The hotel is also known for its excellent services. The hotel is strategically located near famous spots such as the Hong Kong Convention and Exhibition Center, the Hong Kong Arts Center, and the Tsimshatsui Shopping Mall. There are many rooms to choose from ranging from Deluxe to Presidential Suite. There are also many room amenities that the hotel is offering, including LCD television, internet connection, safety deposit box, telephones and others. The hotel also offers different amenities and services such as spa and massage services, swimming pool and sauna, valet parking, concierge services, excursion services, baby-sitting services, secretarial service, room service and others. The hotel also caters to business travelers and has a business center and conference halls with internet facilities (www.asiarooms.com).


            Empire Hotel Hong Kong is part of the Asia Standard Hotel Group Limited. The hotel experienced satisfactory growth in 2005. This is because of the improved average room rate and the increase in the tourist arrivals in Hong Kong. However, the hotel is having a hard time sustaining growth because of different external factors such as the increasing competition and the unpredictable tourist arrivals.


 


 


Purpose of the Business Development Plan


            The aim of business development is to ensure that the firm will achieve business stability and growth. It is important to ensure that the firm will survive and succeed eventually. In order to achieve business stability and growth, the business development plan must have a long-term focus. The firm must develop people and an organizational culture that addresses the issues vital to success. There are three areas that must be considered in order for the firm to create an effective business development program. These areas are (1) customers, (2) competitors, and (3) company.


            Based on the data and information that I gathered, I can assume that Empire Hotel Hong Kong, while being one of Hong Kong’s top 3 star hotels is experiencing a slow growth. There are different factors that hinder the success of the hotel. The business plan will serve as a strategic plan that will direct the organization’s moves. The business plan will be used to have a clear picture of the strengths, weaknesses as well as opportunities and threats for the new business outlet at Empire Hotel Hong Kong. The business plan will also present a clear picture of the target markets and the strategies that will be used to attract them. The business plan will tell the top management, the stakeholders and the investors of the organization’s goals and objectives.


 


 


 


 


Business Planning Methodology


            Business planning aims to answer the following questions:



  • How will the business attract and retain customers?

  • Who are the primary competitors?

  • How intense in the competition?

  • Is the market growing?

  • What would be the effect of changes in circumstances?


 


Company Summary


Hotel Ownership


            Empire Hotel Hong Kong is owned and operated by Asia Standard Hotel Group. Asia Standard Hotel Group owns two hotels in Hong Kong  and one hotel in Vancouver Canaba, which are conveniently located in shopping districts and close to business convention centers. In addition to hotel operation, the Group also operates travel and franchised restaurants business both in Hong Kong and China.


 


New Business Outlet Development Plan


            For a new business initiative it is essential to recognize the development stages through which the enterprise is likely to pass. It is important that the company prepare for the issue sand challenges which will be faced. An established business of the other hand must identify the developmental stage that it is in. When the business has identified its development stage, it must now develop a plan whether to remain on that stage or to move forward. Empire Hotel Hong Kong chose to develop a new business outlet that will generate more profits and attract more customers and guests. The business unit within an established firm also undergoes different challenges. However, these challenges are often eased by the protection of an established corporate parent (Elkin 1998).  In order to make an appropriate business plan the planning committee must analyze and study the changes that are taking place in the market. The competitors and the intensity of competition must be considered.


 


The New Business Outlet – Imperial Restaurant


            The proposed restaurant will offer a fusion of Asian and Western style menus in a stylish and modern atmosphere. The food concept will reflect the brand image that the restaurant wants to promote – delicious food with a touch of creativity. The target market of the restaurant will be, primarily the hotel guests which are comprised by business travelers and family tourists. The secondary target markets are the tourists and people around the vicinity.


 


Competitive Advantages


            One of the competitive advantages of the hotel is its brand image. The hotel, through its years of experience, quality service and high-end facilities has built a strong brand identity. The hotel boasts its excellent services, amenities and facilities. Another source of competitive advantage is the well-trained hotel staff. The hotel is committed to employee training and development. The hotel believes that the employees are the ones who carry the hotel brand. Different training, development and learning programs are in place to ensure the quality of service at Empire Hotel Hong Kong. The strategic location of the hotel is also a source of competitive advantage. The hotel is located near major spots and establishments in Wanchai Hong Kong. The hotel is just five minute walk away from MTR Station, Hong Kong Arts Centre, Admiralty Pacific Place. The hotel is also accessible to business travelers participating in the HK Convention and Exhibition Center. The hotel is just fifteen minutes drive from Tsimshatsui Shopping Mall. Below is a map that shows that strategic location of the hotel.



Source: www.empirehotel.com.hk


 


PEST Analysis


            The Political, Economic, Social and Technological (PEST) Analysis is used to identify the factors that affect the hotel industry in Hong Kong as a whole.


Political Factors


            Donald Tsang was re-elected in 2007 as the chief executive of Hong Kong. The government of Hong Kong remains committed to its integration with Mainland China. Through the closer economic partnership arrangements with China, particularly in the flow of people and resources, Hong Kong is able to build a strong relationship with China. The government continues to pursue developments in the travel and tourism industry.


Economic Factors


            Hong Kong continues to be one of the main business and financial hubs in Asia. Hong Kong has superior infrastructure, strong regulatory environment and skilled workforce. The growth of the economy will remain fast even in the face of slow GDP growth and high domestic interest rates. Hong Kong is one of the major international trading and financial center in the region. It is an important banking and financial center in Asia.


Social Factors


            Hong Kong society is gradually changing since the ‘Hand-over’ in 1997. The numbers of expatriates in Hong Kong are declining while mainland Chinese are increasing. Because of this the Hong Kong society has increasing Chinese cultural attributes.


 


 


Technological Factors


            The rapid development and wide adoption of digital technology in Hong Kong has lead to great changes in the hospitality and tourism industry. Because of the advancements in technology, physical distance has lesser effect on tourists. Telecommunications and transportation become more efficient and less expensive. Distance is bridged even further using the Internet. Technology allows tourists to book hotel accommodations and air tickets online. Electronic brochures are now widely used in the promotion of trade fairs and travel products.


 


Competitive Environment


            In order to assess the feasibility of the business development plan, the management must analyze its competitors. The hotels that are found in Wanchai are the following:


The CharterHouse Hotel Hong Kong


            The CharterHouse Hotel Hong Kong is among the well-known 3-Star hotels in Hong Kong. The hotel is located at the heart of Hong Kong between Wanchai and Causeway Bay. The hotel is accessible to customers. It just a few minutes walk from Times Square, subway and the Hong Kong Convention and Exhibition Center. Among the many facilities of the hotel are restaurants, bars and fitness centre, internet and wi-fi services (www.charterhiuse.com).


 


 


New Harbour Hotel Hong Kong


            Another famous hotel in Wanchai is New Harbour Hotel. The hotel is located near the Hong Kong Exhibition and Convention Center. The hotel is also near some major forms of transportation such as the MTR. The services offered are secretarial services, confirmation of airline tickets and arrangement of sightseeing tours.


 


Wesley Hotel Hong Kong


            Wesley Hotel is located in Wan Chai, one of the famous business and entertainment districts in Hong Kong. The hotel is accessible to public transportation and is near the central district, which is bustling with cinemas, shopping malls, and restaurants. There are two restaurants and the hotel. In addition the guests can also choose from the different restaurants around the hotel (wwww.accomline.com).


 


The Business  Plan


            The Hotel industry is a highly competitive industry. Every hotel employs different strategies to attract consumers. Empire Hotel Hong Kong is considered as a top 3-Star Hotel in Hong Kong. The hotel has experienced growth in the previous years. However, this growth is very minimal. The management needs to develop a new business outlet that will add to the profit, growth and development of the hotel.


            The hotel is currently undergoing a renovation and a new Chinese restaurant is on the way. In order to add to these developments, it has been proposed that the hotel open a new restaurant with an innovative concept that will attract significant numbers of hotel guests. The restaurant is also expected to attract considerable numbers of non-hotel guests.


 


 


 Executive Summary


            The Imperial Restaurant will be a full-service restaurant and café located inside the Empire Hotel Hong Kong. The restaurant will offer a full menu that features a fusion between Western and Asian cuisines. The restaurant will have a café section that will feature a coffeehouse with a dessert bar, magazines, and space for live performances. The restaurant will be owned and managed by Asia Standard Hotel Group Limited, the owner of Empire Hotel Hong Kong and two other hotels.


            This business plan offers financial institutions an opportunity to review the company’s vision and strategic focus. It also provides a step-by-step plan for the business start-up, establishing favorable sales numbers, gross margin and profitability.


 


Objectives


            The objectives of the new business outlet are:


1. To reach sales during the first year of operation approaching $ 1 million.


2. To maintain a net profit of at least 10 per cent on the second year.


3. To reach a monthly sales of 100,000 on the first year and to earn 200,000 every month on the second year.


 


Mission


            The Imperial Restaurant will provide high quality food with a twist and entertainment to the hotel guests and other customers. The restaurant will establish itself as a chic and elegant dining destination where good food, quality service and innovative design concepts are combined. The restaurant will offer a complete, high-quality dining experience for the customers. The customers will surely enjoy the delectable dishes that the restaurant will offer. Aside from that, the restaurant will also be a place of relaxation, comfort and entertainment. The aim of the restaurant is simple, to provide a completely sophisticated, sensual, yet casual dining and coffee shop experience for the customers.


 


Keys to Success


1.  High quality products – in order to gain a competitive advantage over the competitors. The quality of the products must be maintained.


2. High quality service – in order to encourage customer loyalty, each service encounter must be positive. The comfort, satisfaction and entertainment of the guests must be the top priority of each staff.


3. Marketing – effective marketing plays an important part in reaching the target markets and potential customers.


4. Management – effective management of food, beverage and service is important. Different areas of the restaurant operation must also be managed properly.


 


Start-Up Summary


Start-Up Requirements


Start-Up Expenses


(In US Dollars)


Legal


1,5000


Stationary etc.


500


Brochures


500


Consultants


1,000


Licenses, Tax, Deposits


10,000


Employee Payroll


25,000


Accounting


1,000


Soft Opening Expenses


3,000


Grand Opening Advertising


3,000


Miscellaneous


2,000


Total Start-Up Expenses


47,5000


 


Locations and Facilities


            The restaurant will be located inside the hotel. The facility will have a small coffee shop and an entertainment lounge. The seating capacity of the restaurant will be approximately 100 and an outdoor patio will be added that has a seating capacity of 40.


Sample Menu


            The menu will consist of a wide array of items that include mixed Western and Asian cuisines. Included in the proposed menu are the following:


Soup and Salad


Appetizer


Garden Vegetable Soup


Italian Bruchetta


French Onion Soup


Baked Spinach w/ Cheese


Prawn Bisque w/ Fresh Cream


Garlic and Bacon Bits Bread


Asparagus Cream Soup


Fresh Vietnamese Spring Roll


New England Clam Chowder


Thai Steak with Spicy Thai Hot Sauce


Caesar Salad


Salmon Sashimi in Spicy Hot Sauce


Fillet Steak Salad


 


Baby Spinach Salad


 


Grilled Mushrooms Salad


 


 


Pasta


 


Noodle


Fetuccini w/ Shrimp and Mushroom Cream Sauce


Noodle in Pork Stew


Spaghetti w/ River Prawn


 


Tokyo Soba


Spicy Spaghetti Thai Style


 


Phad Thai w/ Fresh Shrimp


Fetuccini w/ Grilled Vegetables and Pesto Sauce


 


Stir-Fried Shanghai Noodles


 


 


Stir-Fried Chinese egg Noodle


 


 


Main Dish


 


Dessert


Hainanese Chicken Rice


 


Layered Crepe Cake


Fried Rice w/ Dried Beef


 


Green Tea Cheese Cake


Fired Rice w/ Shrimp Paste


 


Chocolate Banana Cake


Egg and Bacon Fried Rice


 


Chocolate Cake


Grilled Beef w/ Japanese Soya Sauce


Tiramisu


 


Fried Marinated Beef w/ Rice


Apple Crumble


 


 


Black Jelly


 


 


Personnel Plan


 


            The management wants to invest in its people. In order to ensure product and service quality, qualified, experienced individuals will be chosen to fill the needed positions. The Restaurant will include


 


1 Restaurant/Business Outlet Manager


1 Dining Supervisor


1 Kitchen Supervisor/ Head Chef


3 Chefs


2 Kitchen Helpers/ Dishwashers


10 Waitstaff


2 Receptionists


 


Marketing Strategy


            Through market segmentation, the target markets are identified. The focus of the marketing programs and strategies is the target market. A target market according to Proctor (2000) is the market or market segments, which form the firm’s marketing efforts. Once segments have been identified, decisions about how many and which customer groups to target must be made.


Leisure-Family Tourists


            Hong Kong is one of the top tourist destinations in Asia. Because of the opening of Hong Kong Disneyland and the growth of other family-oriented attractions in Hong Kong, family tourism is expected to rise. The government of Hong Kong continues to invest heavily on new tourists attractions. The government also encourages the Hong Kong community to remain hospitable and friendly towards tourists. The ease of travel from Mainland China to Hong Kong has also livened up the tourism industry. The government of Hong Kong expects more Chinese families to visit. Family travelers from various markets, in particular the neighboring short-haul destinations and Mainland, have strong interest in Hong Kong (www.tourism.gov.hk).


Business Travelers


            Business travelers are also a significant market segment. Hong Kong is considered as one of the business hubs in Asia. The government of Hong Kong aims to make Hong Kong as the leading convention, exhibition and tourism capital of the region. The tourism industry cooperates with the government in promoting Hong Kong as a Business Tourism destination through improvements in facilities, services and entertainment. To attract more business arrivals, the HKTB is stepping up efforts to promote Hong Kong as a leading destination for meetings, incentives, conventions and exhibition through promotions targeting event organizers, international organizations and potential visitors (Hong Kong Tourism 2008).


Secondary Target Market


            The secondary target market is comprised of tourists and people around the vicinity of the hotel. The hotel is strategically located near a business convention and some attractions like shopping malls. Because of the hotels strategic location, it is expected to attract non-guests customers. The age profile of the secondary target market is extensive. It includes young teens, professionals, and young families. The target market lives a modern lifestyle and loves to experiment with new taste of food. These market segments want a dining experience with a relaxing atmosphere. These people are willing to pay extra for fine food and service.


 


Restaurant Size


            The proposed size of the restaurant is around 200-220 sqm. It will be located inside the hotel with a door facing outside. The design of the restaurant will emphasize modernity and elegance yet at the same time comfortable and welcoming.


 


 


Marketing Mix


 


Product Strategy


            The restaurant will offer a wide array of foods to choose from. The menu will include different Asian and Western dishes. In order to give the customers a variety of choices new food items will be introduced every month. The standard menu will range from Western cuisine to Japanese, Thai, Indian, Vietnamese and Chinese dishes.


 


Positioning Strategy


            The restaurant is strategically located to reach target markets and attract potential customers. The restaurant is expected to attract people in the Wanchai distruct particularly those that are near the hotel. The restaurant will have a modern design and warm ambiance to encourage maximum customer flow. One important strategy that the restaurant can use in order to have a good position in the market and to attract more customers is through brand development.


 


Developing Effective Brand Elements


1. Memorability and Recognition


            Empire Hotel Hong Kong can use different advertisement campaigns and promotional activities in order to increase memorability and recognition of the restaurant brand among the mainstay guests and potential guests. Through different advertisement campaigns and promotional activities, the management can develop a brand that is easily recognizable.


2. Meaningfulness


            The management can make use of brand name, brand logo, brand symbols, brand slogans and brand characters that are descriptive, persuasive and interesting in order to attract customers. These can be combinations of both visual and verbal approaches.


 


People Strategy


            The staff at the restaurant are properly trained in order to ensure high quality of service. They are dedicate and energetic. Managing the restaurant operation can add to the strategic advantage of the new restaurant. It must be considered that service provision is different from product provision. One point of difference is the intangibility of service. There are three important aspects of service provision: paying attention to competencies and their continuous development, establishing collaborative relationships and empowering service employees (Lowson 2002). The management must also understand that each guest or consumer seeks different service value. The service value is divided into several parts.



  • Perceived Quality – Perceived quality can be described as ‘fitness for use’. This definition of quality capture the essence of value by emphasizing the importance of customer perception. The consumers form their expectations through word of mouth, communication, personal needs, past experience and external communications from the service organization. It is important the management matches or exceeds customer expectations. The customer may develop their expectations about the restaurant, its products and service through word of mouth, and through the advertisements and promotional activities that the business employ.

  • Intrinsic Attributes – The benefits provided to the customer; these can be both core services and supplementary services. The former are the basic or minimum, benefits the customer expects. The latter are the additional comfort factors that enhance the experience.

  • Extrinsic Attributes – These are related to the service but exist outside the service package and are not directly related to the service itself. Examples are the location and reputation of the restaurant. These are psychological benefits that the service provider may not always control directly, but they can greatly enhance value to the customer.


 


Promotion Strategy


            Word-of-mouth is an effective promotion. In order to have a positive word-of-mouth, the restaurant must make sure that customers are satisfied. The restaurant must be committed to rendering high quality service and products. The menu items must be continually developed. The management must also assess the market on a regular basis. Aside from word-of-mouth, the restaurant must also a lot budget for promotional activities and advertisements. Advertisements in the form of brochures will be used. In addition, the company website will also play an important role in the advertisement of the new restaurant.


 


 


Bibliography


 


‘Asia Standard Hotel Announces 2005/06 Interim Results’, Asia Standard Hotel Group Limited, retrieved on 15 February 2008 from http://202.66.146.82/listco/hk/asiastdhotel/interim/2006/intpress.pdf


 


Eggland, S & Gilley, J 1998, Principles of Human Resource Development, Addison Wesley, Reading MA.


 


Elkin, P 1998, Mastering Business Planning and Strategy: The Power of Strategic Thinking, Thorogood, London.


 


Empire Hong Kong Hotel, Hong Kong Island, retrieved on 15 February 2008 from http://www.asiarooms.com/hong_kong/hong_kong_island/empire_hongkong.html


 


Empire Hotel Hong Kong: Location 2004, Empire Hotels and Resorts, retrieved on 20 February 2008 from http://www.empirehotel.com.hk/hk_location.php


 


‘Families to push HK tourism growth’ 2004, retrieved on 15 February 2008 from http://www.tourism.gov.hk/resources/english/paperreport_doc/press/2004-11-25/Press_release_-CITM_E.pdf


 


Gilley, J & Maycunich, A 2000, Organizational Learning, Performance, and Change: An Introduction to Strategic Human Resource Development, Perseus, Cambridge, MA.


 


Lowson, R H 2002, Strategic Operations Management: The New Competitive Advantage. Routledge, New York.


 


Phelps, M 1988, Organizational Development – Unpublished Manuscript, University of Nebraska, Lincoln.


 


Proctor, T 2000, Strategic Marketing: An Introduction, Routledge, London.


 


Sternthal, B & Tybout, A M 2001, ‘Segmentation and Targeting’, in D Iacobuccid (ed.), Kellogg on Marketing (pp. 3-30), Wiley, New York.


 


The Charterhouse Hotel Hong Kong 2008, The Charterhouse Hotel Hong Kong, retrieved on 20 February, 2008 from http://www.charterhouse.com/


 


 


 


 


 


 



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