Marketing Plan Project
To sustain a company’s existence and to excel in the industry, companies rely on effective marketing management. Select an established travel agency in Bahrain and conduct the following:
- Analyze the internal and external environments affecting the company and market. Identify the customer segments and describe the relative size of each market.
- Study the company’s existing or potential competitors and explain the resources that both your selected company and competitors have.
- Using your analyses of the customer segments and resources, identify the customer segment that makes the most attractive target market for the company. Provide your justifications.
- Develop a marketing plan for your selected company for the year 2019.
Solution
Executive Summary
The study conducted shows the potential and growth of the travel and leisure industry and more specifically the hospitality industry in the Kingdom of Bahrain. The industry analysis shows growth potential with an increase in population, disposable income, and visitors from the GCC countries in Bahrain. The market analysis shows the market demographics, market segmentation, market potential, and growth expected in the next five years. The governmental support of the tourism industry in the form of targeting to reach $1 Billion by 2020 also shows greater opportunities for Gulf Hotel Group. The company Gulf Hotel Group is evaluated regarding its internal and external environment. SWOT analysis shows that the financial slow down poses threat to the company and the oversupply of rooms can be considered a weakness is reducing the occupancy rate for the Gulf Hotel Group. However, the extensive experience, highly diverse and strong portfolio and financial strength make the Gulf Hotel Group capable enough to exploit the opportunities provided to the Bahrain tourism industry in coming five years with governmental support and higher infrastructure investment in five-star resorts and hotels. The analysis is conducted to devise a marketing plan for 2019 better. The marketing plan for 2019 has shown the USP of high quality and best hospitality service provider in Bahrain. The target market of upper-middle and middle-class business and leisure travelers shows a focused approach to be followed in 2019. The expansion plans for executive luxury apartments, resorts, hotels, and specialty restaurants all to be completed until 2019 shows the revenues that would stream in during the next five years. Finally, the financial position and the implementation and control of the marketing plan are shown in the end.
Company Background and objectives
The Gulf Hotels Group BSC is one of the public companies which is listed as the tourism and leisure company on the Bahrain stock exchange incorporated in the year 1967 as the Bahrain Hotels Company (Bahrain Bourse). The company, when established back in 1967, has the vision of providing the best standard of hospitality available on the entire island. It was then delivered by the establishment of the first five-star hotel of Bahrain; the Gulf Hotel. The company, after forty years of its establishment, is still following the same vision, even though the then Gulf Hotel has changed vastly through continuous expansion and upgrading for meeting the demands of the clients (Gulf Hotel Group). The portfolio of the Gulf Hotel Group PLC now includes;
- The Gulf Hotel Bahrain
- Gulf Executive Offices
- Gulf Executive Residences
- Gulf Brands International
- Gulf Hotel Laundry Services
- Gulf Executive Residence-Juffair
- Gulf Convention Centre
- The K Hotel
- Ocean Paradise Resort Zanzibar
- Gulf Hotel Business Bay, Dubai
The Gulf Hotel group has been organized for management purpose into four main business segments:
- Food and Beverages: the sale of retail food and beverages and other convention operations
- Hotel Operations: the rental service of hotel rooms, executive apartments, offices and laundry services
- Investment and other activities: all the investment services of the group
- Commercial activities: sale, import, and export of the household and kitchen equipment and interior decorative activities
The company has been considered as one of the prime participants and the founders of the leisure and travel industry in Bahrain. Even with the financial and economic slowdown of the travel and leisure industry globally, the Gulf Hotel group has been able to expand and grow its portfolio and has plans to do so in coming years as well (Bahrainedb.Com).
Situation and Market Analysis
The company Gulf Hotel Group is operating in the market of the leisure and tourism market. The market is classified as per the type of trip of the customers, their income level, their age, and their origin. The traveling groups can be categorized into three primary levels. These are;
Special Interest, Adventure, Honeymoons, and the Sightseeing Travelers:
This market segment includes the groups who have special interests, like traveling, adventure or is on a honeymoon or sightseeing trip. The special interest tourists are the ones who are researchers, businesspersons, or related to any other professional are on a formal tour. The various facilities provided by the Gulf Hotel Group offer a great attraction for honeymoon couples and sightseeing tourists (Menon).
High-income travelers:
Then there are the high-income travelers. It is the group of travelers which covers the high earning conscious luxury class who are purely concerned with receiving the five-star treatments. These include the successful entrepreneurs, business tycoons, business executives, celebrities and can be accompanied by their families or friends or can have business concerns. These are the travelers who can also be categorized into regional and international travelers (Menon).
Families and students:
It is the largest segment of the travelers which consists of the upper-middle class and the middle-income class families which can also be further categorized into expatriates and locals. Universities and schools organized excursions, field trips, and adventurous plans are a major market as well (Menon)l.
Market Demographics:
The specific characteristics of the traveler groups and the target market of the Gulf Hotel group include the following unique characteristics;
Origin: local, regional (GCC countries) or international tourists
Family: Singles, couples, and couples with children
Age: 20-60 Years age
Social Class: middle class, higher middle class, higher class
Visit Purpose: Education, Leisure, Meetings, conferences, events, incentives, business, special interest
Market Growth:
Bahrain’s hotel market specifically is considered robust and on the go. If combined with all the restaurants it is one of the most buoyant of the kingdom of Bahrain. The tourism industry is generating revenue, which is expected to incline to $ 1 billion by the year 2020 (Atm Team). In 2016 the arrival of the tourists has increased by 6% is predicted to reach to 15 million in 2020.
The industry is witnessing a continuous demand for the five- and four-stars hotels along with the serviced apartments. Precisely, the Kingdom of Bahrain needs a three-star hotel accommodation for business and leisure tourists (Bahrainedb.Com).
Bahrainedb.Com. Bahrain for Hotel Operators and Investors. Overview of Bahrain’s Economy (Digital Image). Bahrain EDB. Bahrain EDB, June 2017. Web. 28 April 2018.
Market Potential:
The potential of the hotel market in Bahrain can be witnessed by the fact that the kingdom has a large pool of visitors from Saudi Arabia whose visits can be converted into longer stays. New attractions and leisure activities are being encouraged to be developed by the government to promote more tourism and visitors to stay for longer in Bahrain (Bahrainedb.Com). The key facts which are driving the tourism growth in the kingdom of Bahrain are;
- The +2.6% increase in GCC population by 2021
- The +4.5% increase in the GDP growth of the GCC markets
- Improved disposable income
- +65% increase in the expatriate tourists
- The contribution of Hotel and Restaurant industry to GDP at 7.4%
Bahrainedb.Com. Bahrain for Hotel Operators and Investors. Totl number of arrivals by point of entry (Digital Image). Bahrain EDB. Bahrain EDB, June 2017. Web. 28 April 2018.
Altogether Bahrain is witnessing more traffic of visitors from its airports, causeways, and ports than its last four years.
SWOT Analysis
Strengths
- The strongest shareholders in the form of Gulf Air Company (government-owned company) (Oxford Bbusiness Group)
- It can be considered as the market leader with such huge and impressive portfolio of hotels, resorts, spas, etc.
- Experienced in the Hospitality industry as it was one of the first five-star hotels in Bahrain
- Refurbishment and renovation plan Gulf Executive Residence
- Construction of Gulf Spa and Salon
- Retaining of occupancy level of 60% at Gulf Executive Offices
- Strong retail business results as compared to 2015
- More prestigious contracts for the Gulf Hotel Laundry Services
- Complete ownership of the Crowne Plaza Hotel increasing market share (Bahrain Bourse)
Weaknesses
- Higher supply of rooms
- Lower occupancy rates
- Lower Profit Margins (Gulf Hotel Groups)
Opportunities
- The +2.6% increase in GCC population by 2021
- 65% increase in the expatriate tourists
- The tourism industry is expected to grow at a rate of 48% to reach $1 billion in 2020.
- The Bahrain, Kingdom has strong infrastructure, pipelines for supporting the industry
- Saudi Arabia will be connected via a second causeway to Bahrain by road, and by rail network and by the modernization of the International Airport of Bahrain increasing its capacity by 65% (The Gulf Insider)
Threats
- Government service cap charge of 10%
- Increase in Govt Levy to 5%
- Government cuts in the subsidies of meat products
- Government cuts in the subsidies of utilities and fuel
- Higher Competition (The Gulf Hotel Group)
Competitor Analysis
The Bahrain Economic Development board has stated that it has plans for massive infrastructure development of the hotels and restaurants market going underway. The board is planning on adding fifteen more four and five-star hotels as well as resorts in its portfolio with an investment of around $ 10 Billion in the next five years. The brands which are included are the Vida Hotels and Resorts, Fairmont, Ibis, Wyndham Grand Hotel, The one & Only Resort and Pullman. These hotels when built will increase the current supply of the kingdom of more than 180 resorts and hotels including 18 five stars, 48 four stars, 35 three stars, 81 serviced apartments, and more than 10 resorts. By 2021, there is planning of the additional 5000 rooms in the market with five-star privileges (Menon). This high influx of the supply and lower demand has led the overall market to be highly competitive.
The high competition in the hotel market is increasing with the introduction of the additional five-star hotels and resorts. Like the Four Seasons and Le Meridian has penetrated the market impacting the market by increasing the room supply and putting pressure on the total occupancy rates of the hotels. As per the details, the occupancy rates had inclined in 2013 from 37% to 42%. However, compared to the other GCC countries, it is relatively lower. Also, the mean room rate also decreased in 2013 to $205 each night from $208 (Oxford Bbusiness Group).
The Bahrain based companies are profiting from the competitive edge as witnessed in the drastic profit increment of Gulf hotel group in 2016 by 62%. Other companies like the Bahrain family leisure company also saw its financial loss of 2015 converting into profit in 2016. The Bahrain Car Parks a parking space construction company also had its revenue increased as compared to a loss reported in 2015. However, there have been several businesses that have lost money. The National hotels have witnessed their net profits decreased by 7% in 2016 even with the increase of 5% in its last quarter of 2016 revenue. The Bahrain Cinema also reported a decline of 40% in revenue in the last quarter of 2016. The Bahrain tourism company has also dropped its net profits by 80% in its last quarter of 2016 (Gulf Hotel Groups).
Marketing Strategy
The Gulf Hotel Group is committed to its development plans of the 223 roomed Gulf Hotel Business Bays which would be five stars rated and is well underway. The constriction of the Business Bay is expected to be completed by 2019. This waterfront property which is located near the Dubai Mall and Burj Khalifa will be catering to the needs of both leisure and business market after opening in 2019 (Atm Team).
Then the construction of the Gulf Executive Residence Juffair which has 108 units is also expected to be opened in 2019. The Gulf Group has purchased the Adliya Tourism Zone for Block 338 for the development of the specialty restaurants from the domain of the current portfolio of successful restaurants. These plans precisely show the Gulf Hotel Group target market as;
Target Market:
Out of all the mentioned groups of the market, the target market for the Gulf Hotel Group in 2019 is going to be the middle, higher, middle-, and higher-income levels with ages between 23-45 years. All local, regional, and international tourists are going to be targeted. Special interest would be given to the business community for increasing the number of conferences and events. Also, the expected increase in the Saudi visitors is also going to be focused (Pillai).
Unique Selling Proposition:
The unique selling proposition of the Gulf Hotel Group has always been its one of a kind and the best hospitality service available in the industry. All the tourists, whether leisure or business is looking for some quality time, relaxation, five-star treatment and quality food and recreational activities trust the Gulf Hotel Group with its experience in the industry and with its high goodwill (Mahfouz).
Positioning:
The Gulf Hotel Group will be positioned as a partner of the Kingdom of Bahrain in achieving its aim of the $ 1 billion target in the tourism industry by 2020. The Gulf Hotel Group will be positioned with its competitive edge of passion for customer satisfaction and quality service.
Marketing Tactics/Activities
Product:
Established as the first five-star hotels in Bahrain in 1969 the Gulf hotel group has grown with the growth in the tourism and the leisure industry. The product and services portfolio has also expanded with its growth. The Gulf hotel group currently has about 24% of the market share of Bahrain’s five-star market segment. The Gulf Hotel Management Company was established back in 2002 which have to provide the management services, catering services for ships, aircraft, companies, and government departments and organizations. The Gulf hotel group is also the owner of the Ocean Paradise the Zanzibar based resort. The company introduced its luxury executive apartment residence in 2006. In 2013, the company also established its laundry service facility for the handling of the larger laundry volumes (Oxford Bbusiness Group).
The company now also owns a Spa and Salon which opened in 2016. Gulf Brands International is another new establishment, whereas Bahrain Tourism Company is acquired by acquiring 100% shares in the Clowne Plaza. The group also has shared in the Bahrain family leisure company and owns the K hotel, Asal Gulf Inn, and four-star gulf residence anyway.
In 2019, the company will be working on the expansion plans and developing or opening the following key establishments. The five stars Business Bay from Gulf Hotel will be opened in 2019. The Gulf Executive Residence Juffair will have been established, and its management will be working on attracting customers. The specialty restaurants will be constructed in 2019 at the purchased land (Gulf Hotel Groups).
Promotional Strategies:
All the major promotional strategies including the public relations, sales promotion, sales force, advertising, direct marketing would be used for propagating the products and services of the Gulf Hotel Group. The company will use promotional alliances for carrying out the promotion with another company’s service or product. Furthermore, promotional events would be used to attract regional and local customers. The participation in the coming Tourism Food Exhibition 2018 can also be used for propagating the company services. The routine promotional activities in the form of newspaper advertisements, electronic advertisements will be continued. The opening events for the new hotels and resorts can also attract regional and local customers and regional and international media (Pillai).
Place:
The increasing number of the regional visitor’s means expected growth and investment in these regions. Looking at the placement of promotional and marketing activities, it is important to look where the regional tourist is coming from.
Mahfouz, Tamer. “Bahrain’s tourism sector: A complete picture – 2017.” Inbound Visitors by Nationality (Digital Image). Mubasher. Mubasher, 2017. Web. 28 April 2018
As per the graph is shown above, the major portion of the regional traffic is coming from Saudi Arabia, whereas, Kuwait, Qatar and other Arabian countries also account for major portions of visitors. These visitors provide the roadmap for the placement of the marketing and promotional activities. The Gulf Hotel Group should highly focus on advertising and promotion by keeping in view the Saudi tourist. The GCC residents are of prime importance as these comprise 71% of the total tourists of Bahrain. The largest nationality is Saudi’s, and hence the demands of Saudi’s should be incorporated in the marketing and promotional activities (Mahfouz).
Price:
The pricing of the overall room has declined in Bahrain. However, the Gulf Hotel Group can use it as its strength for market penetration. The introductory lower prices for the newly established projects or early bird discounts can attract more customers to the company (Export.Gov).
Financials
The food and beverage segment of the group contributes to the major portion of the revenue generated by the Gulf Hotel Group and also yields a major portion of the gross margins as well. The hotel operations generate the second highest portion of the revenues and segment profits. The investment segment and the commercial segments have remained in the loss.
The combined gross operating revenue of the group for the six months till December 2016 reported BD 36,376,953. The combined gross operating profit for June to December 2016 has been reported to be BD 13,816,854. The consolidated net profit for the group for the last six months of 2016 has been reported as BD 16,132,720. The GHG stands alone operating gross revenue is reported with an increase of 2.35% or BD 763,512 as compared to 2015. The stand-alone GHG operating gross profit is reported with an increment as well by 1.73%. The net profit for standalone GHG is reported as 0.69% as compared to the year 2015 (Gulf Hotel Groups).
| Performa Income Statement 2019 | ||
| 2016-Actual | 2019-Projected | |
| Gross operating revenue | BHD 36,376,953.00 | BHD 37,468,261.59 |
| Operating costs | BHD (22,560,099.00) | BHD (23,236,901.97) |
| GROSS OPERATING PROFIT | BHD 13,816,854.00 | BHD 14,231,359.62 |
| Net Investment Income | BHD – | |
| Share of Profit from associates | BHD 1,252,984.00 | BHD 1,290,573.52 |
| Dividend Income | BHD 532,194.00 | BHD 548,159.82 |
| Gain on trading Investments | BHD 33,220.00 | BHD – |
| Recovery of impaired unquoted investment | BHD – | BHD – |
| impairment loss on available for sale investments | BHD (197,030.00) | BHD – |
| interest income | BHD 414,747.00 | BHD 427,189.41 |
| other income | BHD 797,680.00 | BHD 821,610.40 |
| Total Income | BHD 16,650,649.00 | BHD 17,150,168.47 |
| Total Expenses | BHD (6,643,610.00) | BHD (6,842,918.30) |
| Profit | BHD 10,007,039.00 | BHD 10,307,250.17 |
This Performa income statement is presented to provide a glimpse of following the expansion plans in 2019 with assumed overall growth rate of 3% on all revenues and expenses.
Implementation & Control
The plan devised should be further distributed into separate individual milestones and steps of activities for implementation. These would include the milestones of:
- Completion of refurbishments of established projects
- Completion of construction of new establishments
- Commencing of all Pre-opening promotional and marketing strategies
- Opening Ceremonies and events, and its advertising
- Participation in Exhibitions
- Routine advertising and promotion
- Reviewing of promotional campaigns
The monthly revenues, expenses, customer satisfaction, and performance of the projects should be reviewed, and controlled for better results.
Conclusion:
It can be concluded that with all the challenges presented and expected in the hospitality industry of Bahrain, the opportunities well supported by the governmental investments in its five-year plans in infrastructure provide great strength to have high hopes for the future. Thus, the Gulf Hotel Group should focus on long-term goals and not get panicked with the short-term losses.
Work Cited
Atm Team. “Bahrain tourism industry to reach US$1 billion by 2020.” WTM. WTM, 27 February 2017. Web. 28 April 2018. https://news.wtm.com/bahrain-tourism-industry-to-reach-us1-billion-by-2020/.
Bahrain Bourse. “Gulf Hotel Group B.S.C.” Bahrain Bourse. Bahrain Bourse, 28 April 2018. Web. 28 April 2018. http://www.bahrainbourse.com/gulf-hotels-group-bsc.
Bahrainedb.Com. “Bahrain for Hotel Operators and Investors.” Bahrain EDB. Bahrain EDB, June 2017. Web. 28 April 2018. http://bahrainedb.com/app/uploads/2017/06/Bahrain-Accommodation-Fact-Sheet.pdf.
Export.Gov. “Bahrain Country Commercial Guide.” Bahrain Government. Bahrain Government, 17 April 2016. Web. 28 April 2018. https://www.export.gov/article?id=Bahrain-political-environment.
Gulf Hotel Group. “About Us|Gulf Hotel Group.” Gulf Hotel Group. Gulf Hotel Group, 2018. Web. 28 April 2018. http://www.gulfhotelsgroup.com/ghg_company_profile.php.
Gulf Hotel Groups. “Annual Reports.” Gulf Hotel Groups. Gulf Hotel Groups, 2017. Web. 28 April 2018. http://www.gulfhotelsgroup.com/ghg_annual_reports.php.
Menon, Jochebed. “Market Update: Bahrain’s hospitality industry is slow and steady.” Hotelier Middle East. Hotelier Middle East, 21 August 2017. Web. 28 April 2018. http://www.hoteliermiddleeast.com/31495-market-update-bahrains-hospitality-industry-is-slow-and-steady/.
Mahfouz, Tamer. “Bahrain’s tourism sector: A complete picture – 2017.” Mubasher. Mubasher, 2017. Web. 28 April 2018. https://english.mubasher.info/news/3091336/Bahrain-s-tourism-sector-A-complete-picture-2017.
Oxford Bbusiness Group. “Share analysis: Gulf Hotel Group – Hospitality.” Oxford Bbusiness Group. Oxford Bbusiness Group, 2013. Web. 28 April 2018. https://oxfordbusinessgroup.com/analysis/share-analysis-gulf-hotel-group-%E2%80%93-hospitality.
Pillai, Rajasekharan. “New Product Development in Tourism:A Middle East Experience.” MPRA. MPRA, 2011. Web. 28 April 2018. https://mpra.ub.uni-muenchen.de/61382/1/MPRA_paper_61382.pdf.
The Gulf Hotel Group. “The Gulf Hotel Group 10K 2016.” Gulf Hotel Group. Gulf Hotel Group, 2016. Web. 28 April 2018. http://www.gulfhotelsgroup.com/pdf/2016AR_English.pdf.
The Gulf Insider. “Bahrain to get 15 more 5- and 4-Star Hotels.” The Gulf Insider. The Gulf Insider, 28 April 2017. Web. 28 April 2018. http://www.gulf-insider.com/12235-2/.
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