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Business management startegy report. Case study Travelodge
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Business management strategy report. Case study Travelodge.
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Report-Business Management Strategy.
By
Student no:
CHTM27 - Hospitality Management Studies (2020/1
- London - JL9 - TRM2)
Course: MSc Tourism and Hospitality. Faculty of
Business and Law. University of Sunderland in
London.
Tutor:
Total word limit:
, CHTM27 - Hospitality Management Studies (2020/1
- London - JL9 - TRM2)
Table of Contents
CHTM27 - Hospitality Management Studies (2020/1 - London - JL9 - TRM2)....................................0
CHTM27 - Hospitality Management Studies (2020/1 - London - JL9 - TRM2)...................................1
Hospitality Management Strategy.........................................................................................................4
Introduction...........................................................................................................................................4
This report provides various hospitality management strategies for the success of the hotel business.
Throughout the text, the author will analyse, argue and debate core strategies adopted by the
Travelodge ending with substantial indicative recommendations for every hospitality business.
Furthermore, the text extends to managerial tactics to improve workers retention and optimise the
production of the service and product, which is subsequently appreciated more by guests’ improving
their experience during their stay at Travelodge chain hotel................................................................4
1.The Nature of hospitality....................................................................................................................4
3. Core operations strategy...................................................................................................................5
3.1 Travelodge affiliation...................................................................................................................5
The Travelodge has a vertical integration with tour operators and travel agencies running
online. However, this strategy is significant for the organisation because it makes the business
more visible to potential customers and helps with the rooms selling (Holiday your way, with
flight + hotel and Train+ hotel, 2021); Travelodge loses money on paying fees for these agencies
and rooms’ allotment at low cost. In contrast to the above statement, likely, Travelodge seems
to receive many direct bookings through its official website, validating the recognition of brand
reputation......................................................................................................................................7
3.4 Configuration..........................................................................................................................7
3.5 Organisation................................................................................................................................7
The Travelodge adopted an organisational change strategy to save cost; eighty cluster and area
managers became redundant, saving the company £ 3 m. outlined by Manson (2006). The
organisation rewards district managers the average sum of £4,356 bonus for the optimisation
result in production and deliverance of the service and product (Travelodge Hotels (UK) District
Managers Salaries, n. d.). Although many organisations might acquire such a strategy with success,
the personal writer’s view of this report contrasts the idea that the organisation might stress the
19 UK district managers with the extenuating workload. Thus, repercussion to discontentment for
customers due to lack of sufficient supervision and coordination for regional managers and
consumer branch managers..............................................................................................................8
3.6 Implementation...........................................................................................................................8
Due to the organisational change implications, The Travelodge makes management the
disposition of advanced methods and technologies. The organisation monitors financial
performance and customer satisfaction using the RevPAR. Using the concept of ‘beta’, Travelodge
can measure how the price of a stock fluctuates compared to the market index. According to
Wood (2013), hotels examine their respective capital asset pricing model with the weighted
1
, CHTM27 - Hospitality Management Studies (2020/1
- London - JL9 - TRM2)
average cost of capital to identify risks or advantages for investment decisions. A recent study
conducted by Marino-Romeo et al. (2020) discovered that clients satisfaction measurement
monitoring RevPAR linked to marketing variables in correlation to corporate social responsibility
could increase the revenue for hotels. Since the author could not find Travelodge’s marketing
variable linked to corporate social responsibility, it would be advisable for the organisation to
initiate such a practice to increase its revenue..................................................................................8
3.7 Adaptation and yield management.............................................................................................9
The hospitality sector is a challenging business with a short product lifestyle. Many factors can
induce sudden changes for the organisation. For example, across those couple years, the Travelodge,
the same as myriad other business, encountered a significant challenging time due to the Brexit
regulations and the pandemic Covid-19. Due to the aspect of the new market challenging in this
period, the organisation implemented a new price strategy during the lockdown restriction for
travellers. According to the yield management strategy where demand went at the lower stage
during this period, the company decided to drastically reduce rooms’ price at £ 25 for a family room,
meaning each person of the family of four pays only the amount of £6.25 provided by McGuinness
(2020). Despite critics for reducing the rooms’ cost dramatically during March low season, such a
strategy helped the organisation pay workers covering expenses debt (Travelodge, 2004).................9
4. The core operations unit level...........................................................................................................9
4.1 Carrying capacity and overbooking..............................................................................................9
Similarly, to Travelodge, many customers complained about this issue, referring to the company
sending them to a different location due to the firm’s overbooking stated by Boyce (2015). This
behaviour can profoundly damage the brand image of the organisation, losing many loyal and new
customers. Travelodge should find a proper solution for this issue because many customers are
commenting about this unpleasant experience through online forums website, which grievously
damages the company’s brand image.................................................................................................10
4.2 Green practices.........................................................................................................................10
Travelodge removed the use of plastic bottles, toiletries, and plastic cups for reducing pollution
issues. Also, the company adopted other measurements within the hotel for reducing
environmental impact found from Travelodge (n.d.). Unfortunately, due to insufficient
information about green practices, various clients described their experience negatively linked to
the lack of knowledge about essential basic items missing by the Travelodge management
(Travelodge Birmingham Central Broadway,2021). Therefore, practising green practices without
ensuring clients informed about green practices can cause misunderstanding resulting in negative
reviews and word-of-mouth damaging the brand image and reputation of the hotel chain.
Informing customers by placing a sign holder which explains the missing item and environmental
benefits about the decision would clarify and remind clients about the hotel participation in green
practices, which customers might appreciate. ................................................................................10
4.3 HR practices..............................................................................................................................10
5.3 Design of the Travelodge product- “rooms”...............................................................................12
6. Developing management.................................................................................................................13
The “Business process management system” has a significant impact on hotel management
which focuses on developing, documenting and implementing a new business model to meet
2
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