Luxury Hotels Embracing Executive Lounges Multiple Chapters

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executive lounges of luxury hotel in London

Promotion of Executive Lounge

Overview of the UK hotel industry

Executive lounge market research and trends

Advantages and disadvantages from the hotel perspective

Tourism data

SERVQUAL theory

Methodology and previous research

Research strategy and tools

Sample selection

Reliability and validity

Executive lounges are sections set aside by hotels to cater for guest or customers who are would not mind paying more in order to receive a premium or preferential services (Nguyen, 2015). Just as in the airline industry, the hotel industry has recognized the need to have special services for clients who have huge demands, especially business travelers. The major benefits of executive lounges are the services or amenities offered. Most executive lounges allow guest to have an early check-in and late checkout, business center, allowing guest to take a shower before their rooms are available, private meeting areas, and free meals. The number of executive lounges has been increasing, and it is projected that almost all luxury hotels will have these lounges in the next three to five years. Executive lounges are mostly found in luxury hotels, and their main target is the business traveler, who spends most of his/her time away from family. In order to maintain room occupancy, luxury hotels have been forced to renovate the club lounges. Club lounges have been around for decades and they were mainly used by a select few, but now the hotels have realized there is a growing need for premium services and the hotels can leverage on this especially considering that the economic slowdown. A hotel that intends to capture and retain existing clients has to look for innovative ways of reinforcing their brand, creating the ambiance within the hotel, and offering comfort and convenience (Wernick and Von Glinow, 2012). Initially, executive lounges were a preserve for the weary business traveler, but they have caught on with leisure and family travelers. Normal hotel lounges are crowded and stuffy, but the executive lounges offer a serene environment where one can relax and enjoy luxury services. Executive lounges are not accessible to all hotel guest, but rather to only a select few who are willing to spend an extra thirty to forty percent in order to enjoy the services (Sutthijakra, 2011). Many hotels will offer the lounges to a guest who book certain rooms within the hotel.

In addition, executive lounges also discourage guests from leaving the lounge area by the amenities. By doing so hotels can be assured that most of their guests would also request for other additional services since they prefer to stay within the lounges and not visit other location in London. Consequently, this would result in additional profits since the visitor would not receive all their services free. Executive lounges enhance the probability of attracting business traveller. As most business traveller prefer staying in hotels, where they can hold meetings and meet with clients in a quiet location. The executive lounge provide this business traveller the amenities and space to do so. Thereby, business travellers are more incline to stay in a hotel that has an executive lounge.

Promotion of Executive Lounge

The travel trade is an important channel for the promotion of UK tourism, and in a number of markets it is the key to increasing visits. For example, up to 75% of travel bookings in China are over 70% in Australia. More strategic engagement with the leading operators and travel agent groups and associations in key trade markets could ensure the greater prominence of Britain product in brochures, and increase the range of product on offer to potential visitors. In addition, it is important to increase the range of Britain product, which is packaged together, and put on offer in overseas markets, particularly from beyond London.

Work with the travel trade in key markets in order to get Britain on the shelf, in brochures and sold by the travel trade. Package and promote more areas of the UK to the trade and hence to increase the number of overseas visitors, which would help to increase the number of visitors to the executive lounges. VisitBritain to deliver a product and distribution strategy, which will allow Britain to work with the travel trade both in the UK and overseas to exploit fully the tactical advertising campaigns. Support the promotion of business visits and events in the UK in order to have more business travelers and corporations holding conferences in London.

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The travel trade is key to increasing visits from a number of markets. For example, up to 75% of travel bookings in China are still made via the trade.

Overview of the UK hotel industry

We have analysed that hotels are set to enjoy a strong performance in the coming years due to an upward momentum of the tourism industry in the UK. Our report has shown a number of positive trends of the hotel industry in UK especially London. We believe that it is important to capitalise on the current opportunities within the hotel and tourism industry given over the current prospects and statistics.

The indication has shown an increasing international and domestic tourism in UK. It is estimated that the number of overseas visitors to the UK will rise by 600,000 this year to 32.6 million, the highest since 2008 (Visit Britain, 2013). The value of inbound tourism is forecast to grow from over £21bn in 2013 to £57bn by 2025, with the UK seeing an international tourism balance of payments surplus in 2023, almost forty years since the UK last reported a surplus. In 2013, the UK ranked eighth in the UNWTO international tourist arrivals league, a position held for a number of years, behind France, USA, Spain, China, Italy, Turkey and Germany. The UK accounted for 2.8% of global arrivals in 2013. The UK accounted for 3.4% of international tourism receipts in 2013. In 2014 France, Germany and the U.S.A. were the top three markets in terms of number of visits to the UK accounting for nearly one-in-three visits. The top three markets measured in terms of visitor spend were USA, Germany and France, accounting for a little over one-quarter of all overseas visitor spend. In addition, UK population will experience an increased perception of wealth due to a rise in house prices together with a stronger labour market, which could prove positive for internal tourism.

A record breaking 2014 in terms of both visitor spend is also expected. Spending by international visitors is forecasted to grow by over 6% a year in comparison with domestic spending by UK residents at just over 3%. The record 34.4 million overseas visitors who came to the UK in 2014 spent a record £21.8 billion. These figures represent a 5% increase in volume and 3% (nominal) increase in value compared with 2013. With London accounting for 54% of all inbound visitor spend, the hotel industry is expected to see a significant growth.

Forecast

In 2015, Visit Britain (August 2013) predicts 2.5% growth in volume, and 4.5% growth in value for inbound tourism. These forecasts suggest that there will be 35.1 million visits in 2015 generating visitor spending of £22.2 billion. The forecast envelope for our volume forecast is -0.5% to +5.5% while for visitor spending it is +1.5% to +7.5%.

London

The hotel sector has been experiencing the highest levels of average daily rates, occupancy and revenues per available room since 2008. In London, occupancy/RevPAR have increased from 80.4%/£116.79 in 2012 to 82.05%/£118.42 in 2013. According to Hotstats, it is reported that London continues to outperform the regions and gross operating profit per available room (GOP PAR) in January to December 2013 was almost three times higher in London, at £75.85, in comparison to the regions' rate of £26.56. Occupancy is over 10 percentage points higher in London than the regions with the capital benefitting from strong demand from overseas visitors. Nevertheless, 2013 was variable for London overall, suffering a slow start and tough Olympic comparisons over the summer but recovering well (see Figure 2). London's GOP PAR declined by 1.5% overall compared with 2012 and ARR also fell slightly.

Sustainable economic growth in London make the capital's Hotel Sector as a safe positive investment in the future. London recognition as a world city strives the demand of international visits. The capital has long been a 'Gateway' to the UK. Many tourist visit London prior to travelling to other parts of UK. It is noted that the capital enjoys excellent global connectivity, with well over 100 countries having direct air connections to the UK in 2014. In addition, it is also recorded that 72% of overseas visitors arriving via one of London airport. As such with more visitor are spending time in the capital, hotel industry in London will continue to perform well in the future.

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