Attractiveness Of The Hotel In The Industry Tourism Analysis

Table of Content

The procedure of carry oning research on the concern environment within which the organisation operates and on the organisation itself, in order to explicate and execution of scheme for future concern operations can be mentioned as Strategic analysis of cordial reception organisation. To make the appraisal can utilize figure of tools to procedure of strategic analysis, including PEST ( sometimes PESTLE ) for analyze external environment and, SWOT analysis usage for the internal environmental scanning, and Michael Porter ‘s five forces theoretical account usage to aids to understand the competitory forces, the attraction and current place in the industry.

An effectual manner to cognize the past, present and future potencies sing the industry development is analysing the industry background as the portion of strategic analysis. The External analysis can measure the factors impacting the industry to be existed including political, economical, societal, technological, legal and environmental which have great impacts to run the concern and usage PESTLE analysis.

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In any industry which it is domestic or international, whether associating to merchandises or services, the regulations of competition are personified in five competitory forces of entry of new rivals, menace of replacements, dickering power of purchasers, dickering power of providers, and competition among the bing rivals. Harmonizing to Porter, one of the important determiners of house profitableness is industrial attraction.

In this assignment, a strategic analysis of the Galadhari hotel which is in cordial reception industry has been done through the combination of both theoretical and practical facts sing this belongings including organisational background and industry background of this cordial reception sector in Sri Lanka, an appraisal of the forces impacting the external environment ( the usage of PESTLE analysis ) and an appraisal of the attraction of this industry ( the usage of Porter ‘s 5 forces ) sing the hereafter strategic action to catch more cordial reception market portion.

Background of the industry and about Organization

By refering about the Sri Lankan market of touristry there can be seen growing in the tourer market. All this euphory gives rise to the uncertainty about whether Sri Lanka Tourism is good on the manner to recovery and growing or non. For the last seven months that ended July this twelvemonth ( 2010 ) , reachings are up about 50 % year-on-year ( YOY ) ( 341,991 ) , with income besides maintaining gait at 69 % growing ( Quarter 2 ; US $ 244.5 million ) . The hotel and travel Colombo Stock Exchange ( CSE ) index has been increased by about 200 % for 2009. Today touristry is running on everyone ‘s heads, and it is hard to open a local newspaper without seeing at least one written article on touristry.

The ground for the dramatic betterment in Sri Lanka ‘s touristry informations is the triumph of war in May 2009. This would be a singular consequence when compared with other regional touristry finishs. Another ground for this betterment was the leader of the terrorist has killed and there is ground for cautious optimism that the societal state of affairs in Sri Lanka can better quickly. We can trust the company can take advantage of the ‘peace dividend ‘ by increasing the figure of finishs the air hose serves.

Hotel Galadhari is one of the taking five leading luxury hotels in the Sri Lanka. The narrative of the Galadari Hotel, Colombo which opened its doors in 1984, is a glorious narrative of continual betterment of merchandise and highest criterion of quality in cordial reception over the past 25 old ages.

The vision & A ; beliefs of the hotel is steadfastly grounded in widening a true individualized service to all our invitees, laced with an unforgettable luxury hotel experience with the finest traditions of international hotel-keeping.

The Galadari Hotel, Colombo, punctilious about keeping the privateness of its invitees has drawn in many an elect personality from around the universe such as caputs of authorities, premier curates of taking states, royalty, good known athleticss & A ; music personalities over the past two and half decennaries.

Situated in Colombo metropolis with many a historical edifice within walking distance and a bird’s-eye position of the brilliant Indian ocean, the Galadari Hotel offers a rich blend ofA service and quality in five leading luxury populating with 450 room ace luxury hotel in Sri Lanka that overlooks the Indian Ocean and is next to the Presidential Secretariat, Banks and the World Trade Center, with easy entree to the shopping countries in Colombo. In hotel they are so many installations are available, java store anteroom saloon, chine ‘s eating house, Scheherazade Arabic eating house, pastry store and garden patio, karaoke, saloon and besides have wellness nine and pool, organic structure attention and massage therapy, bed-and-breakfast cordial reception belongingss are available to suit the invitees and the basic demands of their comfy stay.

Hospitality sector is a great beginning of income coevals for the new investors.For case, one-year turnover ( in2008 ) was Rs. 164 ( million ) , runing net income ( in2008 ) was Rs.13.65 ( million ) , growing in turnover ( in 2009 ) was 25 per centum, figure of suites is 450 suites, mean tenancy rate was 80 per centum and growing in local cordial reception sector is 15 per centum. Now, it is easy to understand that how much gross gaining Galadhari hotel in its sector of cordial reception.

Mission of Hotel Galadari

We are exceeding operators of modern-day 4 and 5 star hotels and make value in every brush with our proprietors, invitees and associates.


Exceptional and personalized service, transcending outlooks, and animating a connexion to our trade name in the experiences we provide.


Exceptional Service – Company understand that the value can be created with every brush and this is reflected in its superior criterion of service.

Integrity – honest and straightforward in our interactions with hotel proprietors, invitees, co-workers and the communities in which hotel operate

Respect – Hotel Galadari respect the aims of our stakeholders, the values of its invitees, and the cultural difference in the locations that it run.

Teamwork and Passion – We bring our single expertness, creativeness and passion for industry as a Hotel Galadari squad member.

Continuous Improvement – Hotel is advanced and utilizes best patterns to continually better its direction techniques, and the quality of merchandises and services.

Strengths and Weakness


Visitors from Western Europe besides prefer to remain in hotels in the southern coastal belt where the chief attractive force is the beaches. So Location of the Hotel Galadhari is strength to the organisation to heighten their concerns.

There has besides been a downswing in the reaching of Indians, who prefer Colombo hotels.

Colombo metropolis hotels have been able to keep higher tenancy degrees than hotels on the southern coastal belt because of more concern travellers, and particular visitants such as those coming for conferences. Hence Galadhari besides have more concern chances in the Colombo metropolis.

Since so the leisure sector has under-performed enormously, and Galadhari hotel has more installations to pass the twenty-four hours more at leisure.

Well expertise work group has Galadhari to give satisfied service to their clients


The location of the hotel is in the high security zone in Colombo which is Located in Galle Face Green promenade and with positions over the Indian Ocean, this belongings offers a high degree of service and security. Hence it could acquire troubles to the tourers. Situated right following to the World Trade Center and the President ‘s Residence, the hotel enjoys the most unafraid portion of the metropolis.

The distance to hotel between airdrome is really far and gets more clip to re ach hotel. It could do to the concern conferences which are held in the hotel. The chief intent of the established of Galadari Hotel is to pull the abroad seminars & A ; conferences to the Sri Lanka. Because of the distance to Airport and hotel is excessively far and acquire more clip to make to the finish. And besides the traffic on the roads is chiefly impact to the clip it takes to come to the hotel. Because of these grounds the chief intent has non been achieved.

Galadhari has merely few room installations and they have adequate land to construct new hotel suites in their ain land.

Hotels Galadhari has high geartrain, high costs to keep staff, and for renovation.

Factors impacting the external environment in cordial reception

In strategic planning, external analysis of cordial reception industry has been done with the usage of PESTLE analysis and Porter ‘s 5 ( five ) forces in specifying the scheme, doing determinations on apportioning resources to prosecute the scheme.

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PESTLE Analysis

Political Factors

In Sri Lanka it is socialist republic, province. The authorities is a mixture of the parliamentary and presidential system. Head of the province is president and current President is Mr. Mahinda Rajapaksha and he is the head of armed forces and caput of authorities.

When the companies formulate and implement the schemes the political sphere has a immense impact upon the ordinance of concerns, and the disbursement power of consumers and other concerns. We have to concern about how stable is the political environment, influence of constabularies, Torahs that regulate or revenue enhancement your concern, What is the authorities ‘s place on selling moralss, authorities ‘s policy on the economic system, authorities position on civilization and faith, authorities engagement in trading understandings.

State has chief duty to ease to the tourers and funding to the touristry merchandises development undertakings and do publicities to pull the tourers to the state. On the other manus authorities has to promote local and foreign investors to put their money to develop touristry merchandises and liberate revenue enhancements.

To growing of the touristry substructure installations are straight affect. So authorities has the chief duty to develop and keep substructure. Educated work force in international criterion is besides of import to give good and satisfactory service to the clients. Because of that authorities has make regulations and ordinances to standardise.

A alteration in authorities party is straight impact to the any industry in the state because their policies it will consequence to run the concern. When the authorities strict their security policies it extremely impact to the Galadhari hotel. Because tourer who are coming to the hotel. It leads to blow clip and may be acquiring bad image among the tourers.

. The Tourism Act No 38 of 2005 came into consequence in October 2007. With the flow of the new Tourism act, the Sri Lanka Tourist Board Act No 10 of 1966, which was in consequence for the past 41 old ages, was replaced.

In footings of the demands contained in the new act, the Tourism Development Fund was officially constituted, with 2 chief beginnings remitting fundss to the fund. By manner of 1/3 of the Airport Tax aggregations and 1 % of the Turnover of all Sri Lanka Tourist Board registered constitutions. The Act provided for the puting up of the Sri Lanka Tourism Development Authority, thereby replacing the Sri Lanka Tourist Board.

Economic factors

In Sri Lanka it has unfastened economic system and the Gross Domestic Pproduct grew at an mean one-year rate of 5.5 % in the state. In Sri Lanka service sector is strong in the economic system and it indicate 58 % , fro agribusiness its ‘ 12.8 % and from industry 29.2 % .

About everyone negotiations about Sri Lanka touristry being the engine of growing and expects it to play a polar function in the economic system and it has improved in 6 % in this twelvemonth.

Tourism give benefits to the economic system every bit good as it are the cost to the economic system. Tourism procedure besides involves economic costs, including the direct costs incurred by touristry concerns, authorities costs for substructure to better service tourers, congestion and related costs borne by persons in the community.

Economic impacts are besides become important factors in selling and direction determinations which are straight set uping. Communities hence need to understand the comparative importance of touristry to their part, province or community.

Tourism provides great chances for regional development peculiarly for regional countries undergoing structural alteration. Bing a labour intensive industry, with the right motive touristry can present great employment and preparation chances peculiarly for immature people who like to be professionals in this field.

Social Factor

Sri Lanka being a multi-religious, multiethnic state with a population of 22 million asset ‘s Lankan civilization is a rich blend of the interaction of diverse cultural forms both autochthonal and derived from, trade, faiths which are Buddhism – 69 % , Islam – 15 % , Hinduism – 8 % , Christianity – 8 % . The cultural forms of Sri Lanka today show the permanent impact of a diverse scope of cultures..

The overall civilization is mostly the consequence of the impact of the debut of Buddhism, more than 2,300 old ages ago and Hinduism the 2nd most prevailing faith in Sri Lanka. This does non wipe out the heavy influence of Hinduism, together with the lesser impact of Islam, and Christianity.

By refering about the instruction background the literacy rate of 92 % , and 83 % of the entire population holding had secondary instruction in the state. Sri Lanka has one of the most literate populations amongst developing states.

Tourists appreciate the cordial reception of Sri Lankan People. When the hotel Galadhari provide the services like cabare dance, providing cocottes are non suited to the Sri Lankan civilization.

The bad effects of the touristry can said that touristry has affected the values of our people, peculiarly our young person. It is true that some tourers engage in anti – societal Acts of the Apostless. Some of the tourers are drug nuts or deviants and pervert our young person and they spread incurable diseases such as AIDSs. But we should maintain in head that all the tourers are non black sheep.

Technological Factors

Technological factors are besides of import fact which consequence to the hotel industry in many ways which are comprises the use of the latest innovations and engineerings facilitate the concern activities which are digital telephone installations, broadband Internet connexion, Wi-Fi engineering, multimedia projector, LCD screens, on-line reserve systems, belongings direction package and online information exchange plan ( Point of Sale ) etc.

Now a twenty-four hours ‘s engineering is quickly altering in the universe twenty-four hours by twenty-four hours. As the five star hotel Galadhari should doubt to the new engineering in the market. It will assist the organisation to hold competitory advantages. Technology can used to reservation, online services like on-line engagement, do the publicities.

The rapid development of engineering is impacting the concerns in Sri Lanka and all over the universe. Changes in the engineering have changed the manner concerns operate i.e. Internet booking for tickets and vacations.

Faster altering development in engineering creates a demand to respond rapidly for different concerns in order they want to keep the competitory environment by supplying the same advanced services, which their rivals are offering. Distribution of merchandises by the usage of engineerings.

Legal Factor

When refering about the legal factors include touristry act, favoritism jurisprudence, consumer jurisprudence, employment jurisprudence and wellness and safety. These factors can impact how a hotel operates, its costs, and the demand for its merchandises in tourer industry.

The Tourism Act No 38 of 2005 came into effect in October 2007. With the flow of the new Tourism act, the Sri Lanka Tourist Board Act No 10 of 1966, which was in achieve for the yesteryear more than forty old ages, was replaced. In conditions of the supplies controlled in the new act, the Tourism Development Fund was lawfully constituted, with two chief beginnings remitting financess to the fund. By manner of 1/3 of the Airport Tax aggregations and 1 % of the net incomes of all Sri Lanka Tourist Board registered constitutions.

Attracting and publicity is handled by the Tourism Promotion Bureau. Tourism HRD maps and the Hotels School operations are undertaken by the Sri Lanka Institute of Tourism & A ; Hotel Management. The Sri Lanka Convention Bureau was besides restructured as a statutory organic structure like other Institutions to be managed by an independent Board of Management

Environmental Factor

Hotel Galadhari is situated in the Colombo and in Colombo it has n’t proper drainage disposal system and the hotel dispose its drainage to the sea. Because of that so many environmental issues occurred around that. When we promote touristry there are 1000s and 1000s of tourers unleashed yearly in the state, without proper planning, there is bound to be serious environmental and sustainability issues. Such large-scale and fast path growing has to be carefully planned and managed within specific touristry zones to forestall environmental and cultural debasement.

Individual hotel developments will non do. Such well-planned, large-scale tourer resorts can be designed to embrace sound sustainable environmental patterns ( e.g. , common self-contained sewerage disposal installations with recycling of H2O, solar lighting for resort public countries, no-build green belts within resorts, etc ) .

Such organized and well-managed, large-scale developments contained in several designated zones will assist extenuate most of the possible negative radioactive dust of the socio-cultural and environmental facets. Building and subsequent care should be under rigorous environmentally-sustainable guidelines.

Hotel industry straight affect to the environmental pollution in the state. As the five stars category hotel, Galadhari has the duty to protect our environment and besides developments in the state and have to believe about the pollution

Measuring the Attractiveness of the Hotel in the Industry

Dainty of new entity

Harmonizing to touristry move the new entrant has to stay by this ordinance to set up a hotel every bit good as charges for the services. In the concern sphere, the figure of rivals additions when any concern organisation makes good net income and has a good potency for future.

Harmonizing to current state of affairs, entry barriers are high and exit barriers are low, few new houses can come in into the industry and ill performing houses can easy go out. After the war Sri Lankan authorities has opened the market to new investors to put their money to construct new hotels as the hotel industry is now dining in the state.

In that state of affairs so many hotels are constructing in the north country and clients willing to travel in those countries. New entities are use new engineering and specializer cognition to develop their concern and it may be affect growing of the concern of Galadhari hotel.

There are factors related with the menaces of new entrants in the hotel industry in Sri Lanka which are as follows-

Easy recognition installations for new enterprisers in cordial reception industry and Legal supports from the authorities for local enterprisers

Infrastructure development

Policies for foreign investors to set up first organisation including revenue enhancement freedoms, ownership, responsibility, revenue enhancement jurisprudence and remittal,

‘National Tourism Policy and Vision ‘ to hike up the touristry and cordial reception industry,

Fewer Numberss of rivals in the current market place. ( Merely 5 five-star hotels in Sri Lanka ) .

Higher net income border

Menace of replacement merchandises

As the hotel industry specifically marks on adjustment, amusement and fooding installations, the replacements of these installations may include other nutrient industries ( fast nutrient and eating houses ) , amusement ( saloon, discos, clubs etc. ) and for adjustment installations sharing with private constitution ( sing friends and relations ) and others related with adjustment installations.

Every client looks for high perceive value in their owned merchandises. Substitute merchandises are goods and services from outside a given industry that perform similar or the same map as a merchandise that the industry produces. In this context, many organisations focus on their rivals instead than replacement merchandises and the market portion declines at the same time, therefore the market schemes should be flexible to get by with such menaces.

In the cordial reception industry, the replacements may include assorted types of invitee houses, hostel, motels, private-owned invitee houses, condominiums, little dress shop hotels, bread-and-breakfast hotels and flat hotels which might be the menaces for a specific star-category hotel like Galadhari.

In this current market place, there are many replacements of the star-category hotels in Colombo for adjustment – Jaj -Samudra, Gall face Hotel, Hilton, Mount Lavinia, . ; for nutrient – KFC, McDonalds, Pizza Hut, BFC, Pizza Corner, Dominos Pizza etc. ; for amusement – dark Clubs, many more which might deflect the clients instead than the cordial reception industry to hold the merchandises and services of a hotel.

Competitive Rivalry among bing participants

In the conventional fiscal mock-up, competition between rival companies drives net incomes to zero and is non ideal and companies are non simple inactive monetary value takers. Rather, companies struggle for a competitory benefit over their challengers. The strength of competition among houses varies across industries, and tactical analysts are paying attending in these differences.

In this current competitory period, the tough competition among concern organisations increases when figure of rivals are in the same market place based on their merchandises classs, mark markets, types of services, fiscal affordability, volume of the organisation, profitableness and potency of the market tendencies for long term concern. In this instance, monetary value price reduction, particular offers, lower net income border and turn down in the market portion are by and large happening between rivals.

In Colombo, the competition among rivals is truly high as this cordial reception is a flourishing sector in Sri Lanka and merely few rivals in the five-star class hotels in Sri Lanka to function the clients.

Furthermore, the clients are seeking to support each other through merchandises fluctuation, service quality betterment, specifying new mark markets, researching new merchandises invention and development and supplying sole installations to the invitees.

The competitory competition is go oning in cordial reception industry in the Sri Lanka and it is besides affect to the hotel like Galadhari. When the company implements their schemes they should hold Varity in their merchandises and services.

Dickering power of providers

The providers can play one of the chief functions in developing or worsening the contemplation of an organisation.When the providers are more, the bargaining power of them by and large goes down whereas fewer providers can demand more benefits from the organisation.

Suppliers are those houses or persons that provide part into the creative activity of an industry ‘s production on clip. It could be in signifiers of resources and natural stuffs, services, employment, direct merchandises and others obligatory material by the organisation.

Now a twenty-four hours most of the services have out beginning in the companies. In the hotel industry, the providers are involved in assorted sections including suites, nutrient and drinks, IT, invitee and travel engagements, security confidence, belongings direction, conveyance, guaranting concern installations etc. The providers in instance of hotel of Galadhari is including travel agents and circuit operators for invitee reserves every bit good as corporate clients, educational establishments for manpower supply, IT houses for belongings direction package and IT solutions, local importers for international nutrient and drinks supply, security agents for safety and security, local car rental for particular agreement etc.

Dickering power of clients

One of the chief parties is client in every organisation. Customers mean consumers or mediators those who buy the production of an organisation to hold or resell it to person else in the market. If there are assorted merchandises and immense competition, client bargaining power rises up and frailty versa.

The bargaining power of clients depends on some factors like demands of the clients, clip and convenience to the desired finishs and therefore, they can easy toggle into another merchandise.

By sing the hotel industry in Sri Lanka, the bargaining power of clients are really high and they have adequate options to toggle into another hotels by comparing in footings of costs, quality of service, merchandise classs and particular offers provided peculiarly for group engagements and long-run stay. Sometimes Galadhari hotel has rack rate of the hotel installations.

In the pick seasons like December, the bargaining power of the clients becomes lower and lower. When in the touristry season the hotel has intolerable clients and their bargaining power besides really high in this season.

7.0 Decision

The procedure of carry oning research on the concern environment within which the organisation operates and on the organisation itself, in order to explicate and execution of scheme for future concern operations can be mentioned as Strategic analysis of cordial reception organisation. To make the appraisal can utilize figure of tools to procedure of strategic analysis, including PEST ( sometimes PESTLE ) for analyze external environment and, SWOT analysis usage for the internal environmental scanning, and Michael Porter ‘s five forces theoretical account usage to aids to understand the competitory forces, the attraction and current place in the industry.

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