Development a Golf Resort and Health Spa by Rosehill Enterprises - Case Study Example

BUSINESS STRATEGIC REPORT FOR ROSEHILL ENTERPRISES ON THE PROPOSED HOTEL & GOLF RESORT/HEALTH SPA IN CROATIA PRESENTED TO ANN SHAW, OWNER & CEO ROSEHILL ENTERPRISE FOR THE PERIOD STARTING AUGUST 2012 PRESENTED BY JOHN TEMPLEMANN, GM THE BANNOCK HOTEL Executive summary This paper offers an insight into the different underlying elements, which may influence the feasibility of the proposed golf resort and health spa to be built by Rosehill Enterprises in Croatia. Under the current volatile economy, the company faces numerous strategic challenges. In spite of these challenges, this document asserts that opportunities abound for Rosehill Enterprises and the construction of the proposed golf resort is one among many in the midst of the crisis. This report makes the following recommendations to Rosehill Enterprises. 1. Property configuration is a significant element when trying to attain various key aims such as ease of operations, attracting multinational customers, and ultimately, providing acceptable returns on investments. 2. The process of the development of the properties ought to follow the sequential steps of concept formulation, project planning, property construction, operations and asset management. 3. Once the process is complete and operational, periodic review of product and business efficiency need continuous review to ensure the actualization of planned performance (Ransley and Ingram, 2004). Due to the rapidly changing business environment and industry conditions, this study is only valid as of August 2012. John Templemann looks forward to providing ongoing assistance to Rosehill Enterprises and trusts that this study proposes the best strategy for Rosehill Enterprises at this point. Introduction This strategic report reviews the proposal to develop a golf resort and health spa by Rosehill Enterprises. This study assesses the overall view of the hotel industry within which the company operates. The study also examines the product development strategies, marketing and highlights the challenges of the development of the property and facilities. The recommendations of the study are given according to the findings. The analysis provided by this report includes all the factors, both external and internal, likely to influence the construction of the proposed golf resort and health spa. These include the culture in Croatia, opportunities from tourism, project capacity and design. This report also summarizes the product development strategy, differentiation from other existing products in the Dalmatian coast, market opportunities available for Rosehill Enterprises, and the challenges likely to be faced by both the company and the proposed project. Purpose of the report The aim of this strategic report is to provide recommendations to Rosehill Enterprises regarding the feasibility of the proposed golf resort and health spa at the Dalmatian Coast in Croatia. Hospitality industry in Croatia The hospitality industry contributes a lot towards the economy of Croatia. Efforts by the government to brand the country as a quality tourist destination have paid off with increasing numbers of people travelling to the country, each year. Although, there are few tourism destinations, compared to other countries, the cultures are diverse and the country has a lot to offer. The government has also ensured the modernization of resorts, as well as improved tourism infrastructure. Product development strategy According to Waller (1996), product development constitutes the assessment of products and services to recognize opportunities for better service delivery, client satisfaction, profits and overall improvements. This study recommends that Rosehill Enterprises adopt a strategy that fits its company mission and vision in the development of its hospitality facilities. The aim is to maximize on the various opportunities available, which guide the strategy in use by Rosehill Enterprises. The following represent the sequential steps proposed by the report as a strategy for developing the proposed golf resort and health spa. 1. Concept formulation This represents the inaugural task in the process of development. It involves envisioning, in abstract terms, how the product will look, and what need it seeks to address. The company will develop a conceptual design of the hotel, golf course and the health spa including the facilities to be housed at the property. The concept of the golf resort and health spa should be elaborate. 2. Planning This represents the process of planning for the concept and costing, in order, to ensure that the project is completed within a budget, time and accepted standard. This will mainly touch on the financial and legal issues of the project. What is the company’s budget constraint is the key question here. 3. Construction This step comes into place when the process of building or renovation occurs. This is the actual development of the project, which involves various experts including architects, quantity surveyors and builders specialized in the proposed areas of development for the company. This will apply especially when the company decides to construct new buildings. 4. Operations This stage comes after the construction process. It involves the installation equipment and furniture that are essential in ensuring the facility is operating as a hospitality unit. Rosehill enterprises will plan for the operation of the hotel, like conferencing and the golf resort/health spa. 5. Asset management This represents the end of the process of development, concerned with the management of assets. This stage involves unit operations, such as maintenance and repair of facilities essential in ensuring adherence to laws and regulations and keeping the property in excellent order. It is a continuous process, which will involve regular review of the performance and the emerging opportunities in the market (Ransley and Ingram, 2004). This is the core area of the strategy development for Rosehill Enterprises. Product development constitutes the assessment of products and services in order to identify opportunities for better service delivery, client satisfaction, profits and overall improvements (Waller, 1996). The main aims of product development specific to this study will be as follows. I. Review of the company’s existing products and services with regard to cost, revenue, and profits. II. Focus attention and resources towards high yielding products and services to attain comparative advantage over competitors. III. Identify strategies to ensure achievement of an improved trading position through advantage over competitors with the proposed ventures. IV. Justify the costing and pricing strategies and maximize the potential of the operation by manipulating costs, prices, and/or sales mix. Product development within the hotel business often involves replicating or offering clients similar products to those of the competition. More often than not, large corporations with enough funds to expand the product quickly have bought out individual entrepreneurs in this industry, who have established themselves within the market. These entrepreneurs have introduced various innovations within the market place. The advent of asset management, which has given rise to individual property performance being under constant review, can challenge this. This is an exceedingly smart strategy for Rosehill enterprises to adopt (Ransley and Ingram, 2004). Asset management services have increased the speed at which existing, or old products are refreshed or rebranded, and their capacity increased. Likewise, other facilities are, under refurbishment, to reposition them into a new market sector. The company should focus more on identifying the needs and tastes of its customers and producing products or services that appeal to them and address changes in their lifestyles, or respond to changing demographics or other trends (Ransley and Ingram, 2004). Examples include e-commerce, lifestyle products, healthy foods and products catering to the aging population. Rosehill Enterprises can incorporate these strategies in their plans for the resort to gain an edge over their competitors. The proposal, therefore, should be pursued keenly according to this report. Product Differentiation Hospitality concepts normally consist of a service delivered in a purposely-designed property, whose value, ambience, form of service and content, are backed up by a determined activity and direction within a definite location, set price and product definition (Ransley and Ingram, 2004). The company, therefore, should gear towards the development of a purposely-designed building with modern equipments and facilities for a health spa, in an excellent location and with a first-class management team. According to Nightingale (1985), a hotel is made up of various interactions and activities, which have both emotional and physical content. This report highlights the value of merging a hotel and golf resort/health spa in a single venture as a recommendable strategy. This is so because modern clients have a higher interest in a one stop-shop thus increasing revenues from the traffic. The principal hotel products are accommodation, restaurants, bars, conference, and banqueting (Williams, 2002). Rosehill’s strategy should be to offer physical and emotional fulfilment through both tangible and intangible components as a product differentiation strategy. The inclusion of both the golf resort and the health spa in the product range offering offers one way of achieving this strategy (Williams, 2002). Aside from the short-term recommendations listed above, this report emphasizes that Rosehill Enterprises continue to prepare and execute longer-term growth strategies. The viability and survival of the company relies on its ability distinguish itself from other businesses at the Dalmatian coast, through affordable price and quality (Ransley and Ingram, 2004). The report asserts that the new opportunities currently under pursuit by the company are sound and practical strategies, but risky nonetheless. Primarily, the report notes the fact that the projects are capital intensive and implementation may take a long time. Marketing Opportunities In light of market research, the target market of Rosehill enterprises is travellers who value luxury, between 25 and 55 years of age, married and with average to high income. Most of these travellers ensure their accommodations are already booked before they embark on travelling, and often stay for at least two nights in order to escape from either of the two nearby urban centres. In addition to this, there is enormous potential to be exploited in this industry for business travellers, in addition to, small conferences (Waller, 2002). The golf resort and health spa is a strong attraction for the high-end luxury customers. Corporate organizations may be interested team building facilities and host golf tournaments that will market the business of Rosehill enterprises. Components of the market include quality, operations, price atmosphere, management, location, product, and service (Lundberg and walker, 1993). Branding represents a key component of the whole strategy. This report recommends that one of the attributes of a global brand is the ability to create a strong relationship with different consumers in different countries. Set rules state that an international brand necessitates the establishment of strong relationships across different ranges of audiences. In addition to this, Rosehill enterprises should create a brand that takes identifies with various cultural tastes and differences (Ransley and Ingram, 2004). Challenges of the development The development approach will face several challenges. One of the effects of the three development methods of refresh, reposition or refurbish is the implications of not adapting the hospitality product. As the building of the property forms, the fundamental physical component of the hospitality product varying the facility or the product profile is a vital and costly undertaking. Good operators know that the process of development is one that is exceedingly costly, inconvenient, time-consuming, and, more often than not, downright messy. On the contrary, the capital costs associated with refurbishing facilities are often lower than those involved in the repositioning exercise (Ransley and Ingram, 2004). Capital investments needed for repositioning is greater, not counting the additional costs and risks associated with launching the product in new market segments. These costs include product sales and marketing, staffing and operational systems. Different countries are at different stages of development, reflecting such elements as regional economies, cultures and local and foreign markets. Conclusion Rosehill needs to consider various elements before creating a design strategy fit for the global market lace. In spite of the various challenges, leading brands need to tap into basic human needs and aspirations. There exist no strong brand than one that speak directly to customers and improves their lives – no matter how small or incremental that improvement (Walker, 1996). The following strategic recommendations are designed with a view of addressing the feasibility of a proposed golf resort and health spa for the company. The configuration of the property is essential if Rosehill is keen on attaining several of its key objectives such as attracting multinational customers, ease of operations and providing an acceptable return on investments. In hospitality, adherence to set steps in the development cycle is necessary especially in the process of changing an idea into a physical entity. The report analysis leads to the following principal conclusions. The process of the development of the properties ought to follow the sequential steps of concept formulation, project planning, property construction, operations and asset management (Ransley and Ingram, 2004). Once the process is complete and operational, periodic review of product and business efficiency need continuous review to ensure the actualization of planned performance. The proposed development of a golf resort and health spa will not be void of hurdles (Ransley and Ingram, 2004). The report notes that Rosehill Enterprises faces three distinct challenges: 1. The capital-intensive projects. 2. The need to adopt new strategies to counter the ever changing business environment. 3. The constant change in the development stage and economy of Croatia with respect to other neighbouring countries. Reference Lundberg, D.E., and Walker, J.R., 1993. The restaurant from concept to operation. New York: Wiley. Ransley, J. and Ingram, H., 2004. Developing Hospitality Properties and Facilities. 2nd ed. Oxford: Elsevier Butterworth-Heinemann, Jordan Hill. Nightingale, M., 1985. The Hospitality Industry: Defining Quality for a Quality Assurance Programme – Study of Perceptions. Services industry journal, Vol. 5, no. 1 Waller, K., 1996. Improving Food and Beverage Performance. Oxford: Butterworth-Heinemann. Williams, A., 2002. Understanding the Hospitality Consumer. Oxford: Butterworth-Heinemann. Read More