Marketing Angelina Lu Presentation Antoine Sfeir Agenda Shangrila

Marketing Angelina Lu Presentation Antoine Sfeir

Agenda: Shangri-la Presentation w World Industry Overview Com Ove pany rvie w Analysis: business model, competitors s, u c s fo ve e c i ti v Ser para & why la com ges angri nta er Sh a v ad pref nts clie ide China hotel market Chin high a hote -end l ma rket Shangri-la From the 4 Ps to 7 Ps Marketing strategies for a service brand The service differentiation

Agenda: Shangri-la Presentation w World Industry Overview Com Ove pany rvie w Analysis: business model, competitors s, u c s fo ve e c i ti v Ser para & why com ges er nta s pref a v ad lient ri la c ng Sha ide China hotel market Chin high a hote -end l ma rket Shangri-la From the 4 Ps to 7 Ps Marketing strategies for a service brand The service differentiation

Industry Overview: World Travel &Tourism Industry Development of International Hospitality Industry Development of World Travel & Tourism 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.

Industry Overview: World Travel &Tourism Industry 2009 2003 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 Hospitality Industry Annual Percent Change in Value Per Room: 2001 -2014 E Source: http: //www. hvs. com/staticcontent/file/Trends. In. The. Internation al. Hospitality. Industry. pdf Asian region shows both quick recovery and steady growth in Value Per Room after the economic crisis.

Industry Overview: World Hospitality Industry Regional Breakdown Source: http: //www. hotelanalyst. co. uk/sit es/default/files/imce 2/ghp%20 sa mple%202. pdf 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 Main Players in the field (The 2012 Rank by total rooms) RANK HOTEL GROUP HEADQUARTER TOTAL ROOMS TOTAL HOTELS 1 Inter. Continental (洲� ) Denham, UK 675, 982 4602 2 Marriott International (万豪) Maryland, US 660, 394 3800 3 Hilton (希尔� ) Virginia, US 652, 957 3966 4 Wyndham (温德姆) New Jersey, US 627, 437 7432 5 Choice Hotels (精�国� ) 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 (�江国� ) Shanghai, China 214, 796 1401 10 Home Inns & Hotels Management ( 如家) Shanghai, China 214, 070 1772 36 Shangri La (香格里拉) Hong Kong, China 33, 553 78

Agenda: Shangri-la Presentation w World Industry Overview Com Ove pany rvie w Analysis: business model, competitors us, c o f es tive c i v Ser para & why i com ges hangr nta fer S a v ad s pre la nt clie ide China hotel market Chin high a hote -end l ma rket Shangri-la From the 4 Ps to 7 Ps Marketing strategies for a service brand The service differentiation

Industry Overview: Hospitality Industry in China • Market size • The Chinese hotels that use starring system received 212. 37 billion RMB in terms of revenue in 201 • 1. 7 million rooms in total The graph is based on the following sources: Xiaoan Wei, Zhiming Le, Development and Innovation of China Hotel, Beijing: Tourism Education Press, 2011 The 2011 Almanac of Chinese Tourism

Industry Overview: China’s hotel market Internet Call Center Mobile Phone App 2008 -2014 Revenue of the Hotel Industry in China from E-business Channel

Industry Overview: Hospitality Industry in China Rev. PAR: 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 hotel demand slows

Agenda: Shangri-la Presentation w World Industry Overview Com Ove pany rvie w Analysis: business model, competitors s, u c s fo ve e c i ti v Ser para & why com ges er nta s pref a v ad lient ri la c ng Sha ide China hotel market Chin high a hote -end l ma rket Shangri-la From the 4 Ps to 7 Ps Marketing strategies for a service brand The service differentiation

Industry Overview: Chinese High-end Hotel Market e. g. Westin – 5 star Chinese High-end hotel? ? Hotels in China classified into star -rated hotels (星�酒店 ), boutique accommodation (精品 店), service apartment, comfort inn, Chinese courtyard and hostels. e. g. Andaz (安达仕) – boutique but not luxury

Industry Overview: Chinese High-end Hotel Market e. g. comfort inn Chinese High-end hotel? ? Hotels in China classified into star -rated hotels (星�酒店 ), boutique accommodation (精品 店), service apartment, comfort inn, Chinese courtyard and hostels. e. g. Chinese courtyard

Industry Overview: Chinese High-end Hotel Market Chinese High-end hotel • Should be at least 4 -stars (Rev. PAR 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 w World Industry Overview Com Ove pany rvie w Analysis: business model, competitors s, u c s fo ve e c i ti v Ser para & why com ges er nta s pref a v ad lient ri la c ng Sha ide China hotel market Chin high a hote -end l ma rket Shangri-la From the 4 Ps to 7 Ps Marketing strategies for a service brand The service differentiation

Shangri-la: Company’s overview Main Milestones: 1971 • Shangri-La Hotel, Singapore, opened under the management of Western International Hotels 1982 • Shangri-La International Hotel Management Ltd. is founded 1984 1993 2010 • First hotel in China opened in Hangzhou • Shangri-La Asia Limited went public • 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

Shangri-la: Company’s Overview Shangri-la’s financial figure of the last five years: • 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: Company’s overview • Main Awards • Most Popular International Hotel Brand in China, The 10 th 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 w World Industry Overview Com Ove pany rvie w Analysis: business model, competitors us, c o es f tive c i v Ser para & why com ges er nta s pref a v ad lient ri la c ng Sha ide China hotel market Chin high a hote -end l ma rket Shangri-la From the 4 Ps to 7 Ps Marketing strategies for a service brand 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 Model Key Activity & Revenue Source Sales and segment information 2012 US$'000 Hotel operation: Room rentals Food & beverage sales Rendering of ancillary services Hotel management & related service fees Property rentals Total 980, 877 848, 134 115, 099 45, 744 67, 395 2, 057, 249 Source: Annual Report 2012

Shangri-la’s Business Model Key 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 Model Key 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 Model Key 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 Model Key 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 Model Positioning 4 or 5 star, luxurious hotels Shangri-La Hotels Traders hotel Shangri-La Resorts Kerry Hotels

Shangri-la’s Business Model Consumer Segment • Both tourists & businessman • Both arriving at cities & at tourist attractions • Both arriving at 1 st tier cities (Beijing, Shanghai, Tianjin, Shenzhen, Guangzhou) and at 2 nd and even 3 rd cities such as Shaoxing (绍兴) and Tangshan (唐山)

Shangri-la’s Business Model Customer Relation Slogan: “There's no greater act of hospitality than to embrace a stranger as one's own. ” –stemming from Asian culture Core Service Values: 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

Shangri-la’s Business Model Channels Direct selling – official website AD- sponsoring special events Distributors –travel agencies

Shangri-la’s Business Model Key Resources • 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 Model Key Partners • 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 Model Cost Structure Sales cost Gross profit rate EBIT rate 2012 US$'000 2, 057, 249 -881, 325 1, 175, 924 57. 16% 484, 157 23. 53%

Competition Analysis for Shangri-la “The overall Rev. PAR 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-la Peninsula (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 1920 s

Competition Analysis for Shangri-la Starwood (喜达屋)

Competition Analysis for Shangri-la Four Seasons (四季) • 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-la Locations Peninsula Four Seasons Starwood -Sheraton Starwood -Westin Starwood -St. Regis (瑞吉) Starwood -The Luxury Collection Hong Kong, Beijing, Shanghai, Guangzhou, Shenzhen, Hangzhou, Macao All over China Beijing, Shanghai, Tianjin, Guangzhou, Zhuhai, Chengdu, Changsha, Sanya, Haikou, Nanjing, Tibet, Shanghai, Tianjin, Sanya, and others

Agenda: Shangri-la Presentation w World Industry Overview Com Ove pany rvie w Analysis: business model, competitors s, u c s fo ve e c i ti v Ser para & why com ges er nta s pref a v ad lient ri la c ng Sha ide China hotel market Chin high a hote -end l ma rket Shangri-la From the 4 Ps to 7 Ps Marketing strategies for a service brand 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_XNTc 3 Nz. Ey. Mz. Iw. 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 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 w World Industry Overview Com Ove pany rvie w Analysis: business model, competitors s, u c s fo ve e c i ti v Ser para & why i com ges hangr nta fer S a v ad s pre la nt clie ide China hotel market Chin high a hote -end l ma rket Shangri-la From the 4 Ps to 7 Ps Marketing strategies for a service brand The service differentiation

Marketing strategies for a service brand : From the 4 Ps to the 7 Ps • 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: 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 w World Industry Overview Com Ove pany rvie w Analysis: business model, competitors us, c o s f ve e c i ti v Ser para & why i com ges hangr a ant efer S v d a s pr la t n clie ide China hotel market Chin high a hote -end l ma rket Shangri-la From the 4 Ps to 7 Ps Marketing strategies for a service brand The service differentiation

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 • Differentiating Your Service: Delivery – Sometimes service hard to differentiate: – Dentist example: Price ? Image Offer Service Quality

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 higherquality 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-strategies-service-businesses http: //www. hoovers. com/company-information/cs/revenue-financial. Shangri. La_Asia_Limited. 728 f 67437917 b 780. html