One World Hotel is a five star luxury hotel perfect for leisure and business travelers located in Petaling Jaya, Selangor. It has 438 rooms and 20 storeys. This hotel is adjoined to the 1 Utama Shopping Centre, which is one of the famous shopping mall in Malaysia equipped with more than 600 retail outlets, 2 cinemas and 26 lane bowling centre. The 438 rooms consist of 96 superior rooms, 144 deluxe rooms, 128 executive deluxe rooms, 52 junior suites, 14 premier suites and 4 executive suites. The guestrooms features are 24-hour in-room dining, satellite/cable television with in-house movie channels, 4-feature bathroom with rain shower, 3 telephones including an IP phone in suites, 32″ LCD TVs in all rooms plus 42″ LCD TVs in every suite, IDD telephone and voice mail, wired internet access, full size executive desk, fully stoked mini bar, tea and coffee making facilities, iron and ironing board, bathrobes and slippers, dedicated bedside reading lamps, hair dryer, weighing scale, personalized coffee machine in Premier Suite and Executive Suite, massage chair in Executive Suite and added luxury of a kitchenette and living room in executive suite
One world hotel is a member of WORLDHOTELS under the deluxe collection category. WORLDHOTEL is the longest established Europe-based global hotel group for independent hotels and regional brands worldwide. Under the banner “Unique Hotels for Unique People”, it has almost 500 affiliate properties in more than 300 destinations and 70 countries worldwide.
The service provided by One World Hotel is called ‘ONE Service’. Hotel guess can simply push the special ‘ONE Service’ button through guess room telephone to request for any service. The services include housekeeping, maintenance, concierge service and food & beverage. Before arrival, the hotel’s concierge team connects guests to a dedicated Web Site that provides insider information about Malaysia, for example where locals eat, where guests can pick up local products and suggested activities. Guests can also send personal emails to the Concierge team to help tailor an itinerary ahead of the visit. Full access transportation is available through the Concierge, which includes transportation to and from the Kuala Lumpur International Airport. The hotel also provides free shuttle service to interesting places in Kuala Lumpur, which includes the nearest Light Rail Transit (LRT) station in Kelana Jaya, Sunway Lagoon Theme Park, KL Sentral Station and Petronas Twin Towels. Other services include babysitting/childcare service, limousine and taxi service, laundry and valet service and foreign currency exchange.
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There are multiple facilities available in One World Hotel. For wellness and recreation, it has fully equipped fitness centre with professional coach and complete with sauna and steam rooms for both male and female, outdoor swimming pool, spa and massage, 2 floodlight hard tennis court and 2 artificial grass tennis court. For conferences, theme parties, business meetings and weddings, One World hotel has a business centre, more than 5000 square meters of meeting space, pillar-less Imperial Ballroom which covers 3100 square meters which is partition-able into three separate ballrooms and can accommodate up to 2000 people for banquets and 3500 persons theatre-style, an extensive foyer for pre-function facility complements the Imperial Ballroom which also has its dedicated entrance from the lobby level of the hotel, 15 versatile function rooms suitable for groups of 20 to 350 people for meetings, private dinners and weddings, 3 individual holdings rooms for dignitaries and a secretariat room are also available. Other facilities include up to 1000 basement parking lots for the convenience of hotel guests, non-smoking rooms and wheel-chair accessible rooms,
Besides services and facilities, there are seven innovative restaurants in One World Hotel. Cinnamon Coffee House is a restaurant of vibrant taste, sight and sound, embodying locan and international cuisine experiences in a single venue, Zuan Yuan Chinese Restaurant specializes in authentic Cantonese cuisine, Kura Japanese Restaurant reflects the genius of Japanese cuisine with an exquisite mix of rare treasured delicacies, The Sphere Lounge is the perfect place for business or social gatherings with its sleek, modern design, yet cosy atmosphere, Poolbar and Grill is best for the hotel guess who like to soak in the sun enjoy exciting thirst quenching beverage, snacks, light meals or wellness cuisine, Long Bar is a place for nights of fun and entertainment in a trendy atmosphere and Havana Club is a special place for cigar lovers.
The nearby attractions of One World Hotel include 1 Utama Shopping Centre, Sunway Lagoon Theme Park, Petronas Twin Towers, National Science Centre, Lake Gardens, Kuala Lumpur Bird Park, Bukit Utama Golf Club, National Monument, Orchid farm, Batu Caves, Central Market, Chinatown, Suria KLCC and Genting Theme Park.
Industry Analysis (LH)
Current Situation and Trend
Hotel business has been particularly badly affected by the global economic crisis in year 2008. This is because during the economic downturn, most corporate companies will introduce cost saving measure, especially ban on travel and stop on meetings, conferences and training sessions which mostly take place in hotel. Furthermore, leisure business is also affected as families do not want to spend extra on holidays due to jobs insecurity.
The economic downturn caused serious effect on choice of hotel, those budget hotels will win in the competition with luxury hotels during tough economic times. Corporate will make fewer, shorter and cheaper business trips, business travelers will care less on luxury instead they are concentrate on whether the hotel deliver the basics, such as good Wi-Fi access, an efficient check-in and a quiet room, rather than lavish facilities such as superior class restaurants, gym or spa.
It is a time of real opportunity for budget hotels to expand on market share. However budget hotels still need to compete on more than price, this is because despite the downturn, travelers still expect to have a good service. In other world, offering a highly customized services that generate a positive impact on guests makes them return and establishing a solid long-lasting ties.
Performance Review
One World Hotel has prevailed and successfully established its name within the increasingly competitive hotel market. However, like most of the hotel, One World Hotel was hit by the global economic downturn. Its revenue declined by 15 percent from RM 64 million posted in 2008. (Business Times, 2010) Despite the economic downturn, One World is facing competition from nearby 5-star hotels such as Armada Hotel, Saujana Hotel, Eastin Hotel and budget hotel such as Tune Hotel.
Due to time consuming, our team assessed the existing service performance of One World Hotel based on consumers’ independent hotel reviews and comments shared by a few website such as trip advisor and agoda website. In order to have a more accurate and actual data, the hotel is highly recommended to conduct a market analysis survey to evaluate what is the reason behind the business decline. From the assessment, they can find out the percentage of which category suffer more losses due to economic downturn, whether it is business traveler or leisure traveler and their preference and trend.
In this proposal, our team assumes that due to economic downturn, the losses of business traveler are equal to the losses of leisure traveler.
Key Issues (SWOT Analysis)
In order to fully recover from economic downturn and thrive in the coming years, One World Hotel must assess its overall strengths and weaknesses as it moves forward through the new millennium. The following SWOT Analysis shows some of the strengths and weaknesses of One World Hotel and also some opportunities and threats that await the hotel.
Strength
One World Hotel is a well established hotel with great architecture and facilities. The room is very comfortable and spacious, the hotel is well kept and clean. One World is in a great shopping location adjoining a huge and great shopping mall with everything you need, One Utama. One World also has seven innovative restaurants to cater the customers’ need.
Weaknesses
From the customer review, the front desk service is rather poor and the check-in process is quite slow, customer service staffs may need some training. One World also lack of after sale service. One World has a high room rate with an average room rate of RM310 which may become a problem when price is a concern. One World is not convenient if hotel guest need to go anywhere in Kuala Lumpur because the hotel is not in the city centre, an hour is needed to get to the KL Central and there is no light rail transit (LRT) within walking distance. Although the hotel provides free shuttle service, the endless traffic is also a problem.
Threat
Global economic crisis in year 2008 was a major blow to the hotel industry, a similar situation may occur again and could result in another downturn. Competition from other luxury and budget hotels also poses a threat to One World
Opportunity
One World Hotel should turn the impact of last two years into opportunity. One World should find a new market strategy instead of competing in the red ocean. An economic downturn may be an opportune time if One World provides value those customers expect and where possible, exceeds their expectation. New products and services can be developed by One World.
BLUE OCEAN STRATEGY
Reconstruct Market Boundaries (SP)
As sales declined by 15%from $64 million posted in 2008, a mix of desk research, qualitative and quantitative research is strongly recommended in order to understand the underlying trends. Problem happens whenever ideal state is differs from actual state. Typically, a proper plan research answers most of the questions and leads to conclusion, recommendations and decision that solve the problem and identify the market opportunity. Of cause, One World Hotel management should allocate some resources for this survey prior to reveal actions. However, our team members would like to diagnose this scenario base on some customer post purchase evaluation shared in website. No doubt, it is subject to data distortion and difficult to interpret due to small number of sample size, but it is a practical approach providing at least some information when resources are limited.
Given that there are more than 50 hotels (range from budget to 5 stars) serving business and leisure traveler in this area, a value curve of Petaling Jaya Hotel Industry in year 2008 is drawn in order to understand the current state of play and develop a strategy canvas. Customer- perceives performances in most of the service attribute are counted and measured scaled relative to competitors. For instance, price, convenience, facility, hygiene…..There for, it shows us the competitiveness across entire market. Both luxury hotel and budget hotel serve the same objective are charted in the value curve. In this case, luxury hotel is interpreted as a hotel that is upscale and costs more than the average accommodation RM180 per night. Those below RM180 are categorized as budget hotel.
Fig 1: Value curve of Petaling Jaya Hotel Industry in year 2008.
From Fig 1, there are luxury hotels that offer a list of “Stars” quality services including lavishly decorated room and most modern facilities in order to provide extraordinary experiences that exceed customer expectations. Even those, this hospitality industry is not selling rooms or beds but customers’ satisfaction, the overall services provided by those luxury hotels in Petaling Jaya are barely meeting customers’ expectation despite of it is a key factor for these hotel to success.
Figure 1: One of the comment shared in internet. Source: http://www.tripadvisor.ca/ShowUserReviews-g298313-d656672-r74554228-One_World_HotelPetaling_Jaya_Selangor.html#CHECK_RATES_CONT, 25th September 2010
Consider the budget hotels, they offer lower score quality services. Their beds are less comfortable but located in city center areas which are a few minutes’ walk from bus stop, bus station or MRT station. Their target market is more constrain in “price” and they have less expectation for hotel. For them, hotel is only “a place to sleep”. Obviously luxury hotel and budget hotel are targeting at two different market segments.
Fig 2: Value curve of luxury hotel in Petaling Jaya indicating the One World hotel relative performance across hotel’s industry competition factors.
What is the strategic group from the perspective of One World Hotel? We identify 3 luxury hotels located in Petaling Jaya area namely Eastin Hotel, Hotel Armada Petaling Jaya and The Saujana Kuala Lumpur hotel. Obviously, One World Hotel which is widely accepted as luxury hotel is offering typically product attributes as compare to their competitors hence difficult to stand apart from the market place. Drawing a strategy canvas is not an easy job; however the management should reconstruct the competitiveness position in order to outcompete from other luxury hotels. But, the question is “How?”
Visualizing Strategy (TANG)
To win the future, One World required a switch from existing approach of competing with their rivals like Eastin, Armada and Saujana Hotel. Instead of looking at current strategic position in this market position and caught up by operation detail, we shift our attention on the big picture. Like most of the business environment, One World is exposed to heterogeneous market. Looking at the location and business activities around the area and analyses the needs why customer tend to stay around that area, we priorities the target market for One World to be business trip customer. Due to the heavy traffic at surrounding, it is less likely that customer will choose this area for vacation. It is not convenient to go in and out of this area frequently and One World chooses to remain this factor. Same goes for Bed and Room size to minimize cost. The exclusive characteristic here is well-off for shopping and surrounded by variety of food. Temptation for the business trip customer to stay within and opt for shopping and eating after work is obviously there and that can be good reason why customer chooses this area during their business trip.
From our survey and after our group argue and debate over the competitive factors, we point out those attributes which required to raise, reduce, eliminate and create.
For this market segment on consumer needs and want, commonly they aim for comfortable and convenient. They will not have ample of time to do their personal activities like shopping during their business trip. Therefore, it will be helpful if information to shopping center or food is simple, clear and easily accessible. To provide the added benefit, One World will increase their services as information provider through internet. Kiosk and on-line station must be widely available at convenient area like lobby and alley within the hotel. For those customers who are not vice verse or dislike this gadget may approach the help desk, where the customer service may provides walking map and instruction. One World shall also prepare special butler upon request for this service at small fees to bring their customer around. This group of service staff shall be updated with the latest information for all the retail outlets as it is part of unique task to carry out. Customer satisfaction in this area of service shall be their performance measure.
By targeting to raise the attribute of convenient of shopping and customize service, existing facilities on restaurant shall reduce. With this reduction, it will provide benefit of space for kitchen, cashier and storage which apparently help in cost reduction. Leaving only one restaurant in One World, this restaurant shall equip with special service where dine in customer are able to order food from outside restaurant. The idea is to enable the customer to have variety of food and having it on the same table. Customer can order their food through special menu including Japanese, Indian, Korean, Mexican and more food from the restaurant nearby and delivery service will be provided right to the table. This service is only limited to hotel guest who will entitle for the same price as if they have it in the original restaurant. With this, food from One World itself is less but the hotel guest is exposed to more choices. Profit from food can be from the alliance restaurants, plus saving and new gain from the additional space.
There will be elimination of facilities like gym and tennis court as to build One World into more focus hotel. All this elimination as well as reduction in facilities that carry out at One World will obviously cause the current status of 5 stars drop. However, this shall not be the limiting factor for them to pursue their new opportunity of Blue Ocean. One World shall disregard the common stars standard to customize their service so as to provide their customer on the benefit that they are looking for. In other word, One World is look up for a different standard of 5 stars hotel with only 3 stars price!
Area of focus which One World had to raise is on training and some investment in database system. Every customer is precious and they shall return with ‘known identity’. Customer’s name, preferences on food, interests on shop etc can be captured as database. All these information may help the customer service to prepare for appropriate information when the return guest places their booking before they arrive. It is important to equip the staff in providing ‘personalized’ service. In addition, the service trope must be well outfitted with appropriate social skill in providing their very personal service.
All the changes as describe above must be communicated to all levels of staff and ensure all the aligned with the same target. System like incentive or reward system and suitable performance measure must be in place when come to operation and management. On top of this, continues training and motivation are important to raise these attributes and sustain at the highest standard.
Reach Beyond Existing Demand (Ann)
Oneworld previous niche marketing strategies that focuses on price exclusivity had created a very small target market. In times of recession, this group of people has become smaller. Moreover, some of them might reduce some unnecessary expenses. Besides maintaining current market, Oneworld has to reach beyond the existing demand. In doing so, the new Oneworld has to understand the needs and reach out to the three tiers of Noncustomers.
We found some key commonalities across the three tiers of noncustomers and existing customers. They are price, convenience, facility, food, leisure, room size, hygiene, shopping facility and other services such as receptionist, after sales service and personalized service.
Oneworld can reach out to the expatriate market, the third tier of noncustomers. Often, these expatriates come alone and were given a huge budget as housing allowances. They may be seeking for a place with a good and convenience location as they are not familiar with the place. As their appointment may only be as long as a year or two, they are not too particular in searching for some real house.
This offers opportunities to Oneworld. Oneworld can offer the same product as a landlord or land lady can offers. A place called home. Adequate room size with good hygiene and perfect quality bed is exactly what these expatriate are looking for. Instead of renting a big condominium for a single person, and having to clean the house themselves, these expatriate can opt to have it all under the roof of Oneworld. These expatriate can have the same satisfaction from renting a house when staying in Oneworld.
Moreover, Oneworld strategic location that connects to the shopping centre and food outlets offers convenience to the expatriates. With Oneworld connections to the various outlets in One Utama shopping centre, the expatriates can spend their leisure time using the sports facilities and gym in the shopping complex.
By entering to tenancy contracts with the expatriate, Oneworld can be sure of their room occupancy and this guarantees some fixed income for the hotel. Oneworld can allocate some 20-50 rooms with various for this long term occupancy.
Oneworld sales team to approach the multinational company. This is an untapped market in the hotel industry.
Blue Ocean – Get The Sequence Right. (Gen yi)
One World hotel will provide upmost customer focus service – makes customer feels like home at an affordable price. The concept of feeling at home at hotel at an attractive price will compel customers to choose One World hotel as their first choice. One World hotel should strive on customer productivity, simplicity and convenience to attract mass customer. One World hotel new concept focused on the “personalized” service of customer. Every customer visited One World hotel will have the anticipation of returning with a “known identity”. Customer’s name and contact is common information which hotel may store. One World hotel shall go one more step further by storing not only customer name but also customer request such as need to have iron and ironing board on each trip, additional pillow, special design of pillow, or even the need to have a room with window facing east for Feng Shui purpose. All the previous information will be utilized during the next visit whereby the hotel can have pre understanding on customer and prepare the required service.
One World hotel can strive to be different from other hotel by simply changing the way customer is usually treated. Providing good customer service is a norm in hotel industry but One World Hotel can provide service and care like family.
For example, it is a general practice that when a customer does not check in after 6pm and do not left an instruction that he or she will be checking late and provide credit card information to secure the room, the room reservation will be cancelled automatically. One World hotel can provide a service whereby all room reservation will be treated in such a way if a customer do not check in after 6pm, the hotel staff will contact the customer to obtain information regarding the customer arrival in order to ensure the customer will have a room upon arrival.
The kiosk or on-line station to facilitate customer’s shopping shall be user friendly whereby customer can learn to use in less than 5 minutes. This will encourage customer to utilize the technology to enable them to have a comfortable stay in the hotel.
One World hotel shall aim for strategic price lower than luxury hotel and comparable with budget hotel. By eliminating facilities mostly unused by mass customers, One World can maintain a low cost operation. By reducing facilities example gym and tennis court, One World can provide an economical price to customer and maintain a low cost to run its business. Investment in training of service troupe (intangible) shall be much lower than upgrading or maintaining facilities which are not the main focus of customer.
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Adoption hurdles on execution of the new concept of treating customer like family members and providing “personalized” service while eliminating facilities such as gym and tennis court is the risk of having customer which required gym and tennis court. Thereby, One World will provide gym facilities by providing transportation for customer to nearest gym and sports recreation. Since the percentage of customer which required such facilities is less, thereby this will reduce the cost of purchasing gym equipments and the maintenance fees. One World hotel new goal is to aim for value innovation rather than facilities innovation.
Overcome Key Organizational Hurdle (Chee Howe)
Build executive into strategy (Ann)
Oneworld previous niche marketing strategies that focuses on price exclusivity had created a very small target market. In times of recession, this group of people has become smaller. Moreover, some of them might reduce some unnecessary expenses. Besides maintaining current market, Oneworld has to reach beyond the existing demand. In doing so, the new Oneworld has to understand the needs and reach out to the three tiers of Noncustomers.
The first tier of noncustomers, are hotel patrons that are usually in search for packages that are value for their money. These people are ready and prepared to migrate whenever there are better offers. They will stay in Oneworld if it is value for their money and are more than willing to switch to nearby hotels such as Eastin Hotel if they have more to offer.
The second tier of noncustomers are people who will usually use hotel service but chose not to visit Oneworld. They may be environment travelers who like to be close to nature. Hence, these group of people will select hotels that are close to nature. Until and when Oneworld has something that fit their criteria that is close to nature, Oneworld could not reach out to these groups.
The third tier of noncustomers, are those who never thought of Oneworld market offerings. They are the house tenants especially among the expatriates in Malaysia. The expatriates are in search of a warm and homey place to stay. Oneworld definitely has something that can be tailored to suit their needs.
Hence, we searched for some commonalities and found some key commonalities across the three tiers of noncustomers and existing customers. They are price, convenience, facility, food, leisure, room size, hygiene, shopping facility and other services such as receptionist, after sales service and personalized service.
Oneworld can reach out to the expatriate market, the third tier of noncustomers. Often, these expatriates come alone and were given a huge budget as housing allowances. They may be seeking for a place with a good and convenience location as they are not familiar with the place. As their appointment may only be as long as a year or two, they are not too particular in searching for some real house.
This offers opportunities to Oneworld. Oneworld can offer the same product as a landlord or land lady can offers. A place called home. Adequate room size with good hygiene and perfect quality bed is exactly what these expatriate are looking for. Instead of renting a big condominium for a single person, and having to clean the house themselves, these expatriate can opt to have it all under the roof of Oneworld. These expatriate can have the same satisfaction from renting a house when staying in Oneworld.
Moreover, Oneworld strategic location that connects to the shopping centre and food outlets offers convenience to the expatriates. With Oneworld connections to the various outlets in One Utama shopping centre, the expatriates can spend their leisure time using the sports facilities and gym in the shopping complex.
By entering to tenancy contracts with the expatriate, Oneworld can be sure of their room occupancy and this guarantees some fixed income for the hotel. Oneworld can allocate some rooms with various types for this long term occupancy. Oneworld sales team can approach the multinational company to sell the concept ‘everything you need in one place’.
First
Tier
Oneworld
Market
Second
Tier
Expatriate
Tenants
Third
Tier
Figure 1: The Three Tiers of Noncustomers
Part II (three E principles of the fair process)
The front line staffs of Oneworld are being complained for being inefficient, slow and not likeable. ‘Front office staffs are not likeable, very slow and need to show they welcome guests.’
One common reasons of the poor service among the employees is due to the lack of trust.
Often it is not easy to built trust. Trust comes from communication and engagements. Oneworld can use the 3E principles of fair process to guide them in building trust among employees at all levels.
The first principle is engagement. Oneworld should involve their staffs in the strategic decision making. Staff ideas should be consulted when Oneworld makes strategic decisions that will affect them. This can motivate the staffs as it makes the staffs feel that they are respected for their input. Moreover, collective wisdoms can bring in more ideas that will contribute to the organizational success.
The second principle is explanation. Each and every employee should be made to understand the reasons behind the strategic decision. Once they understand the idea behind the decision, they began to accept and trust the manager’s intention. This principle is very important as it can also serve as a feedback loop that enhances learning.
In making decisions on service improvements, Oneworld should engage all staffs in bringing in ideas. Front liners, can provide more constructive ideas as they deal mostly with the customers whilst, middle management can make plans to execute the strategy through the inputs. Top management can participate by providing support and constructive comments for quality improvements. The final decision of the strategy is then communicated and cascade to every levels so that everyone is clear of their role in Oneworld.
The third and last principle is expectation clarity. This is where Oneworld sets the rule of the game. Employees should know how they will be judged and what are their rewards and punishments. When staffs know clearly what is expected from them, they can have a clear direction. They can set their own personal goals and objectives to achieve the organizational objectives. Therefore, the strategy can be executed rapidly.
The 3E principles of fair process will affect staffs’ attitude and behaviors. They are more voluntarily to go beyond the call of duty hence performing above expectations.
1http://www.tripadvisor.ca/ShowUserReviews-g298313-d656672-r74554228-One_World_HotelPetaling_Jaya_Selangor.html#CHECK_RATES_CONT, 25th September 2010
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