Shangri-La Hotels Case Analysis

Due to an anticipated higher number of travellers in the Asia Pacific region, the Singapore Tourism Board's (STB) forecasted continuous growth for the number of visitors to Singapore in 2011 following the exceptional pace set in the previous year (Channel NewsAsia, 2011). Hotels are also set to see an increase in both demand and pricing, as Advito 2010 Industry Forecast Q3 Update also predicted. The increased demand for hotels in China and Singapore will drive average daily rate (ADR) price increases of between 2.5 to 6 percent across all regions in 2011 (HMA, 2011). Not only will Shangri-La be facing stiff competition from the key players in the luxury hotel segment, but also the emergence of new brands that is expected to enter the hospitality sector. As such, this has led to hoteliers seeking new ways to identify with customers to compete for a bigger piece of the pie.

Hotel companies need greater clarity on brand identity and to consider creating a new role of an in-house brand specialist, claims James Stuart, managing partner of hospitality brand management specialist The Brand Company.

Hotels need to ensure they have a clearly defined brand before embarking on development plans, states Stuart, based on the findings of a new study that looks at how smaller hotel businesses are building brands.

It is absolutely critical that a brand is defined prior to making a decision on any aspect of the development of a hotel (architecture and human resource)

creating an organizational culture aligned with the brand, designing recruitment and coaching processes that nurture a specific mindset and attitude, and ensuring that marketing promises are delivered on by the reality of the hotel experience.