Ritz carlton weaknesses

23

Executive Summary

In this report, we will be addressing the issue faced by the Ritz Carlton Philadelphia in the value that is being delivered to customers. We have found through research and reviews that the clients are dissatisfied with their experiences when staying at the Ritz Carlton and most agree that it does not live up to the Ritz Carlton brand.

By utilizing market research and evaluating employees’ and customers’ perceptions, we will be able to pinpoint where the issues lie in delivering the service expected by guests. By reevaluating the internal marketing strategies currently in place at the Ritz Carlton Philadelphia we believe we can solve any domestic issues the company is facing that is keeping customers from being satisfied with their service. We can ensure employees are being recruited and trained properly and are delivering the high-quality service associated with the Ritz-Carlton name. Through communicating the current condition of the Ritz and the current renovations being undertaken, guests will not be surprised when they see the construction and will be less upset when they are affected by it because they were made aware previously.

We want to ensure this hotel is delivering service consistent with the rest of the brand and that even though the hotel is currently under construction- guests still receive an excellent stay and want to come back when the renovations are complete.

Table of Content

1.0 Introduction..............................................................................................................................3

2.0 Situational Analysis………………………………………………………………………….3

2.1 Internal analysis…………….…………………………………………….…………...3

2.1.1 Organization Overview………………………………………………...…4

2.1.2 SWOT…………….……………………………………………………….5

2.1.3 Customer’s Profile……………………………………………………….12

2.2 External Analysis…………………………………………………………………….13

2.2.1 Environmental Analysis………………………………………………….13

2.2.2 Industry Analysis………………………………………………………...17

2.2.3 Competitor Analysis……………………………………………………..19

2.2.4 Target Market Analysis………………………………………………….22

2.3 Summary of Situational Analysis……………………………………………………24

3.0 Marketing Problem…………………………………………………………………………25

4.0 Marketing Strategies……………………………………………………………………….26

4.1 Research……………………………………………………………………….…..…26

4.2 Internal Marketing………………………………………………………….………..28

4.3 Communication………………………………………………………………………29

5.0 Conclusion…………………………………………………………………………………..30

Appendix………………………………………………………………………………………..31

References……………………………………………………………………………………….39

1.0 Introduction

The Ritz-Carlton is a chain within the Marriott brand. Marriott International is a hotel company that operates, licenses, and franchises hotels and timeshares throughout the world. Marriott International is a leading lodging company with more than 4,400 properties in 87 countries and territories. Founded by J. Willard and Alice Marriott and guided by Marriott family leadership for nearly 90 years, the company is headquartered in Bethesda, Maryland, USA. At Marriott, the search is never-ending for inventive ways to serve the customers, provide opportunities for their associates, and grow the business. The company that began as a nine-seat A&W root beer stand is recognized today as a top employer. With its superior business operations, it conducts them based on five core values: putting people first, pursuing excellence, embracing change, acting with integrity, and serving the world.

2.0 Situational Analysis-

Situational analysis is a collection and analyzation of internal and or external forces that may influence the Ritz Carlton’s performance and choice of strategies. This report also assesses the Ritz Carlton’s current strengths, weakness, opportunities and threats (Web Finance, Inc. 2016). It also assesses the external forces like political, economic, social-cultural, technology and environmental. This reports looks at both internal and external factors that could or will affect the Ritz Carlton

2.1 Internal Analysis

Internal Analysis is the process of identifying and analyzing the internal characteristics of the Ritz Carlton. This analysis explains internal factors and features that differentiate and distinguish the Ritz Carlton. (Trinity WW, LLC 2015).

2.1.1 Organization Overview

Ritz-Carlton is a luxury hotel chain under the Marriott Brand. The Philadelphia location is a century-old historic landmark building in Center City Philadelphia located at 10 Avenue of the Arts. It has 299 rooms and 18 meeting rooms. There is a 10 Arts Bistro and 10 Arts Lounge located in the lobby. The hotel has a fitness center and spa. It offers a Ritz Kids program to teach kids about the environment and encourage sustainability. The building was originally a bank built in 1907. It became the Ritz-Carlton in 1931. It's only steps away from City Hall and the Subway, with unique food and dining options all around. Next to the hotel is the Residences at the Ritz-Carlton, which is an extended-stay hotel for guests seeking accommodations for a longer stay with full service and amenities available (The Ritz-Carlton LLC, 2016).

The Ritz-Carlton brand as a whole prides itself on empowering its employees and establishing pride in their title as "ladies and gentlemen serving ladies and gentlemen" (The Ritz-Carlton LLC, 2016). Ritz-Carlton is known worldwide for their outstanding customer service (The Ritz-Carlton LLC, 2016). They hold themselves to a unique gold standard and stress a "6th Diamond" (even though the AAA diamond ratings only range from 1-5) to express their level of service to the guests- the sixth is for their mystique, emotional engagement, and functionality (The Ritz-Carlton LLC, 2016). As opposed to an official mission statement, the Ritz-Carlton operates and is guided by this credo (The Ritz-Carlton LLC, 2016).

The Credo

The Ritz-Carlton Hotel is a place where the genuine care and comfort of our guests is our highest mission. We pledge to provide the finest personal service and facilities for our guests who will always enjoy a warm, relaxed, yet refined ambiance. The Ritz-Carlton experience enlivens the senses, instills well-being, and fulfills even the unexpressed wishes and needs of our guests." (The Ritz-Carlton LLC, 2016)

2.1.2 SWOT Analysis

A SWOT analysis takes an in-depth look at a company's internal environment by evaluating its strengths and weaknesses, as well as assessing the company's external environment by looking at potential opportunities and threats to the business (Kotler, 2014). Appendix 1 is an example of a SWOT diagram; this shows the strengths, weakness, opportunities and threats that the Ritz-Carlton is currently facing.

Strengths

Architecture

The hotel was originally a bank called Girard Trust Exchange Bank that was designed and created to resemble the Pantheon in Rome. The aesthetics of the building make it an attractive tourist spot. (The Ritz-Carlton LLC, 2016)

Location

The hotel is right in the heart of the city. The Ritz Carlton is very easy to get to by using public transportation making it convenient for the business traveler. The building is located across the street from the City Hall subway station and regional rail; this makes it easily accessible by public transportation. The location of the hotel in Center City is also a high point because research shows that consumers staying in luxury hotels are more likely to seek out other luxury activities like dining out (Rogers 2014). Due to the central location of the hotel, there are luxury activities such as shopping and dining out available everywhere which can help the hotel appeal to higher income consumers. There are also plenty of luxury leisure activities available within the hotel like the fine dining or the spa services available to guests. (Rogers, 2014). Rewards Points Program

Marriott already has a well-known presence in the reward program realm. Now as Marriott purchases Starwood, who also has their compensation program Starwood Preferred Guest, this will make the program even bigger. It increases Marriott's reach for customers. When Marriott Rewards and Starwood Preferred Guest combine, Marriott will be the largest loyalty program in the hospitality business (Clampet, 2016). Arne Sorenson, the CEO of Marriott told CNBC that “they wanted to create a combined plan that offered everything a guest could want: ‘Something that is even more powerful for our customers so they’ll say ‘Why should I get a card with anyone else?’”(Clampet 2016). This program would change the hospitality industry by raising the standards of loyalty programs, and Marriott would have a large client base. As you see in Appendix 2 and 3 we see how Reward programs influence customers buying patterns and their decisions. (Harland, 2015) In Appendix 2 and 3, the graph explains that loyalty programs can impact customer’s shopping behaviors, influence the frequency of the client of visits and increase in customers spending habits due to the advantages of the programs benefits. The reward program can increase repeat guests because of the brand loyalty. More than half of all Americans are enrolled in a travel award program. (Macke, 2015a). Travelers that are active members in hotel reward programs are typically more experienced travelers and, therefore, are more likely to stay at midscale, upscale, and upper upscale/luxury hotels. (O'Donnell, 2015). Parent Company

Being under the Marriott umbrella not only assures more brand loyalty because of the reward programs throughout all of the hotels, but it gives you access to the title Marriott has, and that is being the “largest hotel company in the world”. When consumers are searching online for a place to stay in the area, the Ritz-Carlton will have a greater presence in a typical search engine because of the power that Marriott has in the market. One-third of travelers says that they try to stay in a hotel within the same family (O'Donnell, 2015). Consumers prefer to stay with a brand that has previously worked for them. A good brand promotes familiarity and trust to potential buyers.

Ritz Kids

The Ritz-Carlton Philadelphia also encourages children to grow and learn about sustainability efforts during their stay. They get the chance to explore the hotel and how it works as well as other fun activities like crafting. Appealing to children is a key advantage because 9 out of 10 parents ask their children's opinions when it comes to choosing leisure activities. Higher household income also correlates with the likelihood of taking children's ideas into consideration when planning trips or vacations (O’Donnell, 2014). Promoting this sustainability and responsibility is precious in today's society as health, wellness, and taking care of the environment becomes increasingly important to consumers (O'Donnell, 2014). The Ritz Kids program is useful for parents who need alone time. Not many other properties offer this type of program for families (The Ritz-Carlton LLC, 2016).

Mobile Application

The Ritz-Carlton has a mobile app for its rewards members that provides a variety of options such as checking in and checking out via the app, as well as submitting a service request, and the ability to keep track of your bill and charges during your stay. The app is important because most business travelers are seeking efficiency and want to save time- especially younger millennial travelers. But even so, among all generations the convenience provided by the Ritz-Carlton app is agreed upon (Macke, 2015c).

Lobby

The lobby of the Ritz is also a strength because studies show that 35% of business travelers especially millennials- are interested in meeting new people on business trips (Macke, 2015c). The lobby of the Ritz has the 10 Arts Bistro and Lounge which provides the perfect space to mingle and can attract business travelers. It’s setting within the historic building and unique all grand marble lobby is what sets it apart from other full-service hotels. It is open to the public. Therefore, even people who aren't staying at the Ritz can come in and enjoy the lobby space- perhaps increasing the share of mind of business and leisure travelers in Philadelphia (Macke, 2015c).

The Residences

The Residences at the Ritz-Carlton Philadelphia is additionally a great asset for business travelers who might need a longer stay. Millennial travelers are most likely to extend a business trip for leisure so having the option of extending a stay there or scheduling for lengthier stay can appeal to consumers who might typically look elsewhere for a longer stay. With the possibility of the Residences adjacent to the hotel, travelers don't have to give up the full-service experience when staying in a condominium (The Ritz-Carlton LLC, 2016).

Weakness

Employees not Meeting Standards

The Ritz-Carlton is known for their high standards of service. The credo is in place to empower the employees to make the guest stay nothing, but the best. The employees are not just working for the Ritz Carlton; they are representing what the Ritz-Carlton stands for, and that's excellence. Currently, the Ritz Carlton in Philadelphia has not been meeting these high standards of service. The customers on TripAdvisor and Ritz Carlton’s Facebook page have been giving bad reviews because of the service, some calling this Ritz Carlton the worst one they ever been to (TripAdvisor 2016). This Ritz Carlton is not performing at the standards and not standing by what they are representing.

Renovations

Currently, the Ritz Carlton is doing renovations to their property. Customers who are staying at the hotel are influenced negatively about the renewal of the hotel. The Ritz-Carlton name is getting tarnished due to the renovations. We see this in a lot of the reviews on TripAdvisor.

"The front lobby is cordoned off as a new restaurant is being put in. Various renovations are going on. Our room had been updated, but plaster had been spilled on the door handle and various other places. The room was comfortable and the location central, but it is not necessarily worth it until the renovation is completed."(Pcg123. "Still under Renovation")

Opportunities

Philadelphia Named No. 1 Destination

Philadelphia was recently named the number one travel destination by Lonely Planet (DiFilippo, 2016). Historically other destinations have seen increases in tourism after being named by Lonely Planet (DiFilippo, 2016). With this potential increase in visits to Philadelphia, the Ritz-Carlton can attract more guests than in years past.

Growing Business Markets

The growth of businesses and business travel presents a great opportunity for the Ritz because independent business travelers are the drivers of the hospitality market. When they visit, they typically spend more money than an average traveler would. Usually, when spending money, if consumers are spending someone else's money on themselves they are less likely to economize but will attempt to seek out the highest value (Hayes, 2011). Since the Ritz-Carlton already serves business travelers, their revenues have a potential to grow as corporate expenditures for business travel grow. Business markets have a projected growth of 18% by 2020, resulting in a corporate expenditure growth of about 3-4% each year (Macke, 2015c). Democratic National Convention

The Democratic National Convention from 2012 created an economic impact of $163.6 million to Charlotte, North Carolina (Spanberg, 2013). The amount of money that will be brought into the city of Philadelphia because of this convention is going to be even more significant than the economic impact of the Pope. (Spanberg, 2013). If Philadelphia does well with this size and status of a convention, it will bring in more events like this to Philadelphia meaning more convention revenues.

Copa America Centenario

For the first time playing outside of South America, Copa America Centenario tournament will be coming to Philadelphia's Lincoln Financial Field as they host some of the world's best soccer teams in this 100-year anniversary of the historic tournament. (DiscoverPHL, 2016). This tournament will bring in a lot of international business from all around the world to Philadelphia.