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Executive Innes
Forte Hotels, a prominent European hotel chain, is creating a new hotel brand in the United States called Forte Executive Innes. This chain aims to blend the atmosphere of European hotels with American practicality and ease. Forte’s decision to invest in this project is driven in part by the growing volume of European business travelers heading to the United States.
Company Background
Forte Hotels, the largest hotel chain in the United Kingdom, encompasses various hotel brands like Le Meridien, Forte Crest, Forte Posthouse, Forte Agip, and Forte TraveLodge. Additionally, Forte Hotels manages a collection of 80 high-end international hotels including notable establishments like Watergate Hotel in Washington D.C., Hyde Park Hotel in London, and King Edward Hotel in Toronto. Recently, Sir Rocco Forte, the chairman of the company, has revealed his intention to sell the TraveLodge chain in the United States. As a replacement, Forte Hotels will launch a new chain specifically catering to European and American business travelers called Forte Executive Inne.
Forte has a two-pronged strategy for creating the new chain: 1) European business travelers visiting the United States will be familiar with and connect the Forte name; 2) To obtain copies or seek permission to reproduce materials, please visit www.decisionpro.biz. It is strictly prohibited to reproduce, store in a retrieval system, use in a spreadsheet, or transmit any part of this publication in any form (electronic, mechanical, photocopying, recording or otherwise) without the permission of DecisionPro, Inc.
Executives at Forte anticipate that the new chain will provide both comfort and service for American business travelers. They hope that customers will associate the brand with luxury and pampering, which is often absent in mid-priced hotel chains. At the same time, they expect guests to recognize that the hotel offers all the practical features found in American hotel chains. While the hotels will exude a European atmosphere, the facilities and services will be on par with established hotel chains like Hilton, Sheraton, and Courtyard by Marriott.
Preliminary Evaluation
According to a recent survey, the main factors influencing hotel choices for business travelers are price, location, and brand name. Forte Executive Innes, priced at around $100 per night, is positioned as a mid-priced option. The company is currently securing prime locations near suburban commercial centers across the United States. Additionally, the new chain will be named leveraging the Forte brand name. The next challenge for Forte is to refine the hotel’s specific features in order to attract both American and European business travelers.
The preferences of business travelers were examined using business databases. It was found that price, location, and convenience are top reasons why men (60 percent of business travelers in the United States) might try a new hotel. On the other hand, women travelers prioritize safety and cleanliness. These factors, along with the brand’s overall image, play a crucial role in generating trial visits. However, it is the hotel’s unique attributes that encourage repeat visits. Recent surveys have also identified several amenities that interest at least 30 percent of business travelers.
These include in-room computer facilities; on-site conference facilities; rooms with well-lit work areas with large desks and swivel chairs; and telecommunication facilities, such as speakerphones and data ports. A survey conducted by a prominent credit card company indicates that approximately 50% of European business travelers to the United States seek hotels that prioritize their care and provide an atmosphere conducive to relaxation. The remaining travelers typically seek hotels that enable them to efficiently complete their business tasks. Armed with these initial findings, Forte recognized the importance of gaining a comprehensive understanding of the preferences of their target market in order to successfully establish a new hotel chain.
Conjoint Analysis
(Matching Hotel Attributes to Customer Preferences)
As an initial move, the company opted to investigate customer preferences for five main attributes that distinguish Forte Executive Innes: room type, business amenities, leisure facilities, conveniences and extras, and restaurants and dining. Under each attribute, multiple options were identified, excluding features that are standard across all existing and planned hotels. Therefore, for the purpose of comparison, hotel room types with similar square footage and rooms equipped with data-ports and other amenities were taken into account.
Forte faced the task of selecting the optimal combination of attribute options in Exhibit 1 to cater to its target audience. The management team has given you permission to employ conjoint analysis to achieve this in a scientifically rigorous manner. A total of 300 business travelers have been recruited to take part in the conjoint analysis study. In this exercise, we will utilize the data collected from 40 of these respondents.
