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Marketing PresentationAngelina Lu Antoine Sfeir

Agenda: Shangri-la Presentation

Industry Overview

Worldwide

China hotel market

China high-end hotel market

Shangri-la

Marketing strategies for a service brand

From the 4 Ps to 7 Ps

Services focus,

comparative advantages

& why clients prefer

Shangri la

CompanyOverview

Analysis: business model,

competitors

The service differentiation

Agenda: Shangri-la Presentation

Industry Overview

Worldwide

China hotel market

China high-end hotel market

Shangri-la

Marketing strategies for a service brand

From the 4 Ps to 7 Ps

Services focus,

comparative

advantages & why

clients prefer

Shangri la

CompanyOverview

Analysis: business model,

competitors

The service differentiation

Industry Overview: World Travel &Tourism Industry

Development of World Travel & Tourism Industry

Development of

International Hospitality

Industry

According to the World Travel & Tourism Council’s (WTTC) economic research, the Travel & Tourism industry has • outperformed the global

economy in 2012. • Its economic contribution

(US$6.6 trillion in GDP) represents 9% of global GDP.

Source: World Tourism Organization

Total arrivals volume continue to grow except for declines in three years:• 2001: Stagnation caused by

9/11 terrorist attack• 2003: Modest 1.6% fall due

to the Iraq crisis, the SARS outbreak and a weak global economy

• 2009: a 3.8% decline caused by the 2008 economic recession

Industry Overview: World Travel &Tourism Industry

2003

2009

Industry Overview: World Hospitality Industry

Annual Percent Change in Value Per Room: 2001-2014E

Source: http://www.hvs.com/staticcontent/file/TrendsInTheInternationalHospitalityIndustry.pdf

Asian region shows both quick recovery and steady growth in Value Per Room after the economic crisis.

Regional Breakdown

The regional breakdown of 2008 and data from WTTC show that Europe and Americas enjoyed about 70% of the world hospitality industry, while hospitality industries in Latin America, Middle East, Africa and Asia are developing quickly.

Industry Overview: World Hospitality Industry

Source: http://www.hotelanalyst.co.uk/sites/default/files/imce2/ghp%20sample%202.pdf

RANK HOTEL GROUP HEADQUARTER TOTAL ROOMS TOTAL HOTELS

1 InterContinental (洲际 ) Denham, UK 675,982 4602

2 Marriott International (万豪 ) Maryland, US 660,394 3800

3 Hilton (希尔顿 ) Virginia, US 652,957 3966

4 Wyndham ( 温德姆 ) New Jersey, US 627,437 7432

5 Choice Hotels ( 精选国际 ) Maryland, US 538,222 6725

6 ACCOR ( 雅高 )Courcouronnes,

France 450,487 3516

7 Starwood ( 喜达屋 ) Connecticut, US 335,415 1134

8 Best Western International ( 最佳西方 )

Arizona, US 312,467 4050

9 Jinjiang International ( 锦江国际 ) Shanghai, China 214,796 1401

10Home Inns & Hotels Management ( 如家 )

Shanghai, China 214,070 1772

36 Shangri La (香格里拉 ) Hong Kong, China 33,553 78

Main Players in the field (The 2012 Rank by total rooms)

Industry Overview: World Hospitality Industry

Agenda: Shangri-la Presentation

Industry Overview

Worldwide

China hotel market

China high-end hotel market

Shangri-la

Marketing strategies for a service brand

From the 4 Ps to 7 Ps

Services focus,

comparative

advantages & why

clients prefer Shangri

la

CompanyOverview

Analysis: business model,

competitors

The service differentiation

Industry Overview: Hospitality Industry in China

• Market size

The graph is based on the following sources:Xiaoan Wei, Zhiming Le, Development and Innovation of China Hotel, Beijing: Tourism Education Press, 2011The 2011 Almanac of Chinese Tourism

• The Chinese hotels that use starring system received 212.37 billion RMB in terms of revenue in 201

• 1.7 million rooms in total

Industry Overview: China’s hotel market

Internet Call Center Mobile Phone App2008-2014 Revenue of the Hotel Industry in China from E-business Channel

Industry Overview: Hospitality Industry in China

RevPAR: Revenue Per Available Room 每可售房收入= Occupancy Rate * Average Price

• An indicator of hotel performance

• The performance of a hotel or the hospitality

industry is decided by both occupancy rate

Industry Overview: Hospitality Industry in China

China hotel demand slows

Agenda: Shangri-la Presentation

Industry Overview

Worldwide

China hotel market

China high-end hotel market

Shangri-la

Marketing strategies for a service brand

From the 4 Ps to 7 Ps

Services focus,

comparative

advantages & why

clients prefer

Shangri la

CompanyOverview

Analysis: business model,

competitors

The service differentiation

Industry Overview: Chinese High-end Hotel Market

Chinese High-end hotel??

Hotels in China classified into

star-rated hotels ( 星级酒店 ),

boutique accommodation ( 精品店 ), service apartment, comfort

inn, Chinese courtyard and

hostels.

e.g. Westin – 5 star

e.g. Andaz ( 安达仕 ) – boutique but not luxury

Industry Overview: Chinese High-end Hotel Market

Chinese High-end hotel??

Hotels in China classified into

star-rated hotels ( 星级酒店 ),

boutique accommodation ( 精品店 ), service apartment, comfort

inn, Chinese courtyard and

hostels.

e.g. Chinese courtyard

e.g. comfort inn

Industry Overview: Chinese High-end Hotel Market

Chinese High-end hotel

• Should be at least 4-stars (RevPAR higher than 275

RMB)

• Should be luxury or boutique, if star rating system is

not applicable.

Industry Overview: Chinese High-end Hotel Market

Agenda: Shangri-la Presentation

Industry Overview

Worldwide

China hotel market

China high-end hotel market

Shangri-la

Marketing strategies for a service brand

From the 4 Ps to 7 Ps

Services focus,

comparative

advantages & why

clients prefer

Shangri la

CompanyOverview

Analysis: business model,

competitors

The service differentiation

Shangri-la: Company’s overview

1971• Shangri-La Hotel, Singapore, opened under the

management of Western International Hotels

1982• Shangri-La International Hotel Management Ltd. is

founded

1984• First hotel in China opened in Hangzhou

1993• Shangri-La Asia Limited went public

2010

• Shangri-La launched new global brand campaign “It's In Our Nature”

• Shangri-La reached all the continents when it entered the European market with Shangri-La Hotel, Paris

MainMilestones:

Shangri-la: Company’s Overview

• Asia Pacific's leading luxury hotel group• Finest hotel ownership and management

companies in the world.• 81 hotels and resorts throughout the world the

Shangri-La group has a room inventory of over 34,000.

Shangri-la’s financial figure of the last five years:

Shangri-la: Company’s overview

• Main Awards• Most Popular International Hotel

Brand in China, The 10th Golden Pillow Award (China)

• Best Luxury Hotel Brand in Greater China, TTG China Travel Awards (China)

• Best International Hotel Group of the Year - 2013 China Travel & Meetings Industry Awards, Travel Weekly China & Events (China)

• Best Luxury Hotel Brand, Hurun Report “Best of the Best 2013” (China)

Agenda: Shangri-la Presentation

Industry Overview

Worldwide

China hotel market

China high-end hotel market

Shangri-la

Marketing strategies for a service brand

From the 4 Ps to 7 Ps

Services focus,

comparative

advantages & why

clients prefer

Shangri la

CompanyOverview

Analysis: business model,

competitors

The service differentiation

Shangri-la’s Business Model

Source: The Startup Owner’s Manual

Key activity, value proposition, customer segment, channel, customer relation, revenue stream, key

resource, key partner, cost

Shangri-la’s Business ModelKey Activity & Revenue Source

Source: Annual Report 2012

2012US$'000

Hotel operation: Room rentals 980,877 Food & beverage sales 848,134 Rendering of ancillary services 115,099

Hotel management & related service fees 45,744

Property rentals 67,395 Total 2,057,249

Sales and segment information

Shangri-la’s Business ModelKey Activity – 4 brands

Shangri-La Hotels ( 香格里拉酒店 ) are five-star luxury hotels located in premier cities

Shangri-la’s Business ModelKey Activity – 4 brands

Shangri-La Resorts ( 香格里拉度假酒店 ) offer travelers and families a relaxing and engaging vacation in some of the world's most exotic destinations

Shangri-la’s Business ModelKey Activity – 4 brands

Kerry Hotels ( 嘉里大酒店 ) is a new five-star brand in the Shangri-La family. It was launched in Shanghai and Beijing in 2011. Kerry Hotels are places for a luxurious stay and inspirational experiences.

Shangri-la’s Business ModelKey Activity – 4 brands

Traders hotel ( 盛贺饭店–四星级 ) is a vibrant yet professional environment (four-star,) designed to complement guests at work, rest or play

Shangri-la’s Business ModelPositioning

Shangri-La Hotels

Shangri-La

Resorts

Kerry Hotels

Traders hotel

4 or 5 star, luxurious hotels

Shangri-la’s Business ModelConsumer Segment

• Both tourists & businessman

• Both arriving at cities & at tourist attractions

• Both arriving at 1st tier cities (Beijing, Shanghai, Tianjin, Shenzhen, Guangzhou) and at 2nd and even 3rd cities such as Shaoxing ( 绍兴 ) and Tangshan ( 唐山 )

Slogan: “There's no greater act of hospitality than to embrace a stranger as one's own. ” –stemming from Asian culture

Shangri-la’s Business ModelCustomer Relation

Respect, Humility, Courtesy, Helpfulness and Sincerity尊重备至，温良谦恭，真诚质朴，乐于助人，彬彬有礼Core Service Values:

Direct selling –official website

Distributors –travel

agencies

AD- sponsoring

special events

Shangri-la’s Business ModelChannels

• Shangri-la’s staff– 6-months training– Emphaysis on both staff’s career development and

their personal life goals– « Tiger » exchange program since 2006– According to China Tourism Enterprise Annual

Report (2010,) compared with other hotel groups, Shangri-la has the lowest turnover rate! 65% of the managers are promoted within the hotel group.

Shangri-la’s Business ModelKey Resources

• Working with other hotel group or investors to build new companies to expand its business in the world

• E.g. Two events in 2009– Al Jader Group (The United Arab Emirates)– China Huaming International Investment Co.,Ltd.

(Moscow, Russia)

Shangri-la’s Business ModelKey Partners

Shangri-la’s Business ModelCost Structure

2012US$'000

Sales 2,057,249 Sales cost -881,325 Gross profit 1,175,924 Gross profit rate 57.16%EBIT 484,157 EBIT rate 23.53%

Competition Analysis for Shangri-la

“The overall RevPAR growth in 2012 for the Mainland China hotel portfolio was a modest 1%. This was attributable to the increase in rooms supply in the competitive set in approximately half of the cities in Mainland China where Group’s hotels operate.”

-- Comments on performance by geography,Annual Report 2012

Competition Analysis for Shangri-laPeninsula ( 半岛酒店 )

• Slogan: We offer the best experience to the peninsula – Hong Kong

• Luxury hotels, very famous in Shanghai, Hk and Beijing

• Recreate the serenity of a rich Chinese merchant’s home of the 1920s

Competition Analysis for Shangri-laStarwood ( 喜达屋 )

• Slogan: Fifty Hotels. Twenty-Two Countries. One Philosophy• “We have chosen to specialize within the hospitality industry by

offering only experiences of exceptional quality. Our objective is to be recognized as the company that manages the finest hotels, resorts and residence clubs wherever we locate. “

Competition Analysis for Shangri-laFour Seasons ( 四季 )

Competition Analysis for Shangri-la

LocationsPeninsula Hong Kong, Beijing, Shanghai

Four SeasonsHong Kong, Beijing, Shanghai, Guangzhou, Shenzhen, Hangzhou, Macao

Starwood -Sheraton All over ChinaStarwood -Westin All over China

Starwood -St.Regis (瑞吉 )

Beijing, Shanghai, Tianjin, Guangzhou, Zhuhai, Chengdu, Changsha, Sanya, Haikou, Nanjing, Tibet,

Starwood -The Luxury Collection

Shanghai, Tianjin, Sanya, and others

Agenda: Shangri-la Presentation

Industry Overview

Worldwide

China hotel market

China high-end hotel market

Shangri-la

Marketing strategies for a service brand

From the 4 Ps to 7 Ps

Services focus,

comparative

advantages & why

clients prefer

Shangri la

CompanyOverview

Analysis: business model,

competitors

The service differentiation

Shangri-la: Services focus & why clients prefer Shangri-la

• Heartfelt hospitality & experiences• Asian standards of hospitality: “It’s In Our Nature” http://

v.youku.com/v_show/id_XNTc3NzEyMzIw.html• The Vision

– To be the first choice for guests, colleagues, shareholders and business partners• The Mission

– To delight our guests every time by creating engaging experiences straight from our heart.

Shangri-la: Services focus & why clients prefer Shangri-la

• Shangri-la guidelines and service focus: • Guest loyalty: key driver• Enable guest decision-making• Demonstrate honesty, care and integrity in all relationship• Social responsibility with a positive contribution to our

communities, environment, colleagues, guests and business partners

Shangri-la: Services focus & why clients prefer Shangri-la

• Shangri-la, not only a quality but …• …a philosophy

• “Shangri-La Hospitality from a caring family.” Distinctive Asian standards of hospitality, one of the company’s cornestone!

• “Pride without arrogance”• Exceed expectations through consistent quality and value

Trendsetters customers

Agenda: Shangri-la Presentation

Industry Overview

Worldwide

China hotel market

China high-end hotel market

Shangri-la

Marketing strategies for a service brand

From the 4 Ps to 7 Ps

Services focus,

comparative

advantages & why

clients prefer Shangri

la

CompanyOverview

Analysis: business model,

competitors

The service differentiation

• Some don’t use that much marketing: ex• Traditionnal 4 Ps approach work well with

physical goods • Boon and Bitner define 3 more Ps for services:

Marketing strategies for a service brand : From the 4 Ps to the 7 Ps

People Physical Process

Marketing strategies for a service brand : From the 4 Ps to the 7 Ps

• People:– Employees’ selection, training and motivation are

decisive-Employees: competent, caring, responsive, problem solving abilities

Marketing strategies for a service brand : From the 4 Ps to the 7 Ps

• Physical evidence:– Demonstration of quality!

– Demonstration of own style!

Marketing strategies for a service brand : From the 4 Ps to the 7 Ps

• Process:– Different delivering process– Example: Restaurants internal and external

differences

Agenda: Shangri-la Presentation

Industry Overview

Worldwide

China hotel market

China high-end hotel market

Shangri-la

Marketing strategies for a service brand

From the 4 Ps to 7 Ps

Services focus,

comparative

advantages & why

clients prefer Shangri

la

CompanyOverview

Analysis: business model,

competitors

The service differentiation

• Differentiating Your Service: – Sometimes service hard to differentiate:– Dentist example: Price ?

Marketing strategies for a service brand : The service differenciation

• Differentiating Your Service: – Sometimes service hard to differentiate:– Dentist example: Price ?

Marketing strategies for a service brand : The service differenciation

OfferImage

Service Quality

Delivery

Marketing strategies for a service brand : The service differenciation

• Offer:• Innovative features:

From primary service package to secondary service feature• Example: Coffee shop

Marketing strategies for a service brand : The service differenciation

• Delivery:• Better people • More attractive physical environment • Quicklier delivery process.

Marketing strategies for a service brand : The service differenciation

• Image:• Through symbols and

branding• When reputable and valued

service a good logo help customers associate high quality to your services

Marketing strategies for a service brand : The service differenciation

• Service quality:• Win over the competition with higher-quality

services and exceeding customer expectations

• Expectations formed by past experiences, word of mouth, and advertising

• Examples:

Thank you !

Xiexie guanshang Merci d’avoir écouté

Sources:

• 十大酒店集团• 中 国 旅 游 网• （ http://www.cnta.com ）、中国饭店协会网（ http://

www.chinahotel.org.cn ）、迈点• 网（ http://www.meadin.com ）等，另外还有喜达屋酒店与度假村国际酒店集团• （ http://www.starwoodhotels.com.cn ）、洲际（ http://cn.ihg.com/ihg ）等

10 大酒• 店集团官方网站。同时包括同时还包括中国期刊全文数据库和维普资讯网、博硕士论文• 资讯网、 EBSCO 全文数据库、 Springer Link 电子期刊等。• http://www.shangri-la.com/• http://helpsme.com/articles/marketing/marketing-strategies-service-businesses• http://www.hoovers.com/company-information/cs/revenue-financial.Shangri-La

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