Hotel Ipsum Marketing Strategy

Marketing Strategy Hotel Ipsum

Santiago Merizalde Ortiz

Market Analysis:

During 2013, there was an increase on the use of hotels and thanks to technological development, consumers used frequently the internet as a tool to select hotels and purchase services through the hotels website or through online travel agencies.

Bogotá is the capital of Colombia so it is the economic and social centerpoint of the country. It accounts for 25% of the total GDP and has a growth of 10% annually in the hotel sector.

Foreigner´s arrivals to Colombia have been constantly increasing between 7% and 18% annually, specially tourists from the USA and people travelling for business purposes. Due to these, there has been a huge increase in hotels present in Bogotá.

Rafael identified Ipsum´s main competitors in terms of location (located geographically near Ipsum) and in terms of customer target segment (business and sporadic travellers). Also it was used the category the competitors were playing (médium-high level) with fees between 140USD to 280 USD.

The main competitors that where identified are: “Hotel Estelar Calle 93”, Part of a Colombian chain, opened 5 months ago with 140 suites, it is a 5 stars business hotel, well locate, decorated with a mix between modernity and rustic including an spa with a gym, sauna and open-air swimming pool in the 9th floor. The second competitor is “Cité Hotel”, a modern five star hotel with spacious rooms and a swimming pool and terrace in the roof. It belongs to the local hotel chain Cosmos. The third competitor is Hotel Pavillon Royal, A well-established five start hotel that is part of the Hotel Royal chain that also runs Radisson hotels in Colombia. The fourth competitor is “Hotel BH Parque 93”, part of a Colombian hotel chain called Business Hotels with more than 40 years experience in the industry.

Some of the key attributes of Hotel Ipsum are location, high-level gastronomy offer, minimalist decor concept, simplicity, comfort, low number of rooms and overall personalized customer service. The customer base was mainly international customers, representing 61% of its customer base while the national customers were 39% of the total customers. Countries of origin of the international guests of Hotel Ipsum were mainly USA, Spain and Mexico.The average occupancy rate is of almost 60% which is not enough for a hotel to keep a high leve lof revenue. Its main opportunity is during weekends where they have only a 20% occupancy rate.

Marketing Strategy:

Financial Objectives:

- It is important that Rafael aims to have a positive ROI (Return on Investment) through optimizing resources and implementing a structured financial plan to observe how the US$ 14.400.000 investment the owners of the hotel did will change and improve the market share the hotel curretly has in Bogotá. Also, the profit objective is to receive a return on their investment of 6%, US$864,000 annually.

- Additionally it is important to have a coherent and realistic profit and loss account in ordr for Rafael to identify where the main opportunities are and he is able to provide a quick solution.

Non-financial Objectives:

- In order for Rafael to increase occupancy rates and average daily rates, he will be in the need to implement some non-financial objectives like to increase the recognition customers have towards the hotel brand and its strengths compared with the competitors. If the customers associate the hotel brand with the main core values they want to transmit, tourists travellers and business travellers will lean towards choosing Ipsum Hotel over other options.

- Another non-financial objective is to increase the purchase intention. In order to achieve this objective it is important to perform a Purchase intent study and evaluate through a survey the willingness of the customer to buy the services the hotel offers.

- Lastly, increase Brand awareness mease the online marketing metric to increase social media reach and engagement like the click-through rate, Unique Website visitors metric, abandonment rate or the followers and interactions through social media.

Customer objectives:

There are two main customer objectives for Rafael in regard to Hotel Ipsum:

- Retaining existing customers through measuring the customer satisfaction index by asking them to rate their level of satisfaction of their experience with the company that will show us their intentions of using again Hotel Ipsums services which will transform in retaining those customers by identifying what they liked and what they don´t so it can be improved.

- Attracting new customers would be the other objective Rafael should consider since they need new customers constantly to continue growing. This can bemeasured through the Net Promotes Score which will show us the willingness of a customer to recommend a company product or service to others which will increase the voice to voice marketing strategy method and also increase the amount of positive critics in social media and travell vlogs which travellers constantly check to stay in the best hotels.

Also, the Brand objective is to improve weekly occupancy. Currently it is in 20%, in the weekends it is 8,320 per night, eooms occupied are 1664 with an average room rate of $168. In order to reach the target of weekend revenue of $449,552 it would mean to have a target % occuoancy rateo f 35,2%.

Strategic objective:

Target: Business travellers that are seeking a great place to sleep during their business travel as well as good spaces to work and have meetings. Also, tourism travellers that are looking for a well positioned hotel that will provide easy access to the most luxurious spaces in Bogota and that is not as expensive as the other premium hotels in the city.

Positioning: It is how custoers perceive the brand in the market. In this case, it is perceived as a affordable high class hotel for business or tourism travellers seeking for an excellent location within the city and a great experience inside it.

Marketing Mix:

Product:

- Hotel Ipsum is a modern 5-star luxury hotel with 80 fully equipped rooms, located in the heart of Bogotá, with a strategic location within the Colombian capital, one of the most dynamic business cities in Latin America. Built in June 2011 and designed with a relaxing minimalist décor, it is one of the most highly regarded hotels in the business world.