HOTEL EXPANSION STRATEGY

Hotel Expansion Strategy

Hotel Expansion: Feasibility Report

Introduction

The aim of this paper is also to talk about strategies. In this paper, strategies of a renowned five star hotel are discussed in a noteworthy detail. This paper talks about the expansion plan of the hotel into the Eastern Europe region. The paper outlines the expansion plan and recommends strategies and challenges that the hotel management would likely to face during their expansion of the business.

External Analysis

The following part of the paper discusses the external analysis of the hotel industry of Russia for the given chain of hotels. This would enable to analyze the opportunities and threats that are present in the industry of Russia and then formulate their strategies.

PEST Analysis

As this paper, talks about Hotel Expansion Plan so this part of the paper, is focused on the analysis of PEST for hotel industry in Russia.

Political Factors

Overall, political situation is not a significant trend of the hotel and restaurant industry. Despite being the world's largest industry, tourism has remained depoliticized which in turn give a boost to the hotel and restaurant industry. But the scenario is quite different in a country like Russia. In Russia, different political orientations were embraced by the governmental bodies. By different political orientation means that initially in Russia, there was Soviet Union then afterwards the politics of Soviet Union ended up by its collapse. The collapse of Soviet Union caused its impact on business in variegated aspects. For instance, after the collapse of Soviet Union the Russia was indulged mainly in exports to satisfy the needs of consumers. The consumers of Russia after the collapse of Soviet Union relied on exports. This extreme reliance on exports decreased the local production because consumers did not want to buy local products. This reliance on exports by the Russian consumers caused its impact in two ways. First it gave a boost to the development of foreign hotels in Russia. Secondly, it gave rise to the sales of the hotel industry as foreigners and foreign investors used to visit Russia to look after their business as the Russians decided to consume exported goods (DataMonitor 2009, 11).

Moreover, there are different factors that have caused its impact on the demand of the hotel industry (Evans 2008, 21). The most decisive factor is of terrorism. Terrorism is the factor because of which the overall percentage of people who used to travel a lot has decreased to a greater extent. Also, due to terrorism the processing of visa in various countries has become time consuming, which in turn, affects the number of people travel and ultimately the sales of the hotel industry. In Russia, terrorist activity has always been a concern, one which has gained strength over the course of 2009 and 2010. In November 2009, more than 25 people were killed when a bomb blast caused the derailment of a Moscow-Saint Petersburg express train. In March 2010, 39 people were killed, and more than 60 were injured in two suicide bomb attacks on ...