Critical article review

Executive summary

Examination of wide number of Asian hotel companies in identifying and providing

recommendations in order to expand internationally.

Abstract

Introduction.
The article brings up insights regarding hotel massive growth towards hotel industry in Asia
and particularity emphasis on China. The development of hotels in emerging markets are
similar to other industries, therefore hotel industries no longer the main domain of
European and American companies. The purpose of this paper reflects the significance
whereby dominated by multinational companies from developed countries’ start to share
the economy with Asian local companies that are growing faster than their multinational
counterparts. The author brings statistical evidence from the Asian hotel brands that appear
ranking of the top 300 hotel companies in the world, whereby two China based companies
appear in top ten list. Hence, Author of the paper reviews articles that analyze Asian hotel
groups development process based on the content analysis of existing publications creating
a conceptual nature of research. A number of theoretical and practical implications identify
and summaries major issues.

Literature review
The contribution to research involves articulated claims from different variety of sources
explaining Asian hotels building the showcase of the best that Asia had to offer and catered
to international long travelers coming to do business or leisure activities. Those brands
representatives build up tremendous brand equity and loyalty towards customers from
years. Furthermore, this paper has adequately positioned within the context of what have
been done before by examining Economical conditions of Asian market to the adequacy of
the literature review. The following statements from the author indicated that many Asian
brands are facing strategic choice as to or not expand beyond their home territories to
manage hotels in non-asian destination in order to archive greater growth.
Author highlights some of the implication from the economical view that support the
theoretical foundation of the research including internalization pressure whereby its very
important to obtain organizational growth for market penetration and therefore market
development and product development or diversification. Hence Asia was able to achieve
between 7 and 8 per cent (World Tourism Organization, 2012). While chains in extensive
domestic markets that can bolster more development may not want to extend abroad at
this time, chains in littler residential markets that are near immersion are feeling the strain
to look facilitate an initiative for development openings. Thus, at some point or another,
most lodging organizations will confront the subject of how, what and where to develop, in
their home-base as well as abroad and to non-Asian destinations. Therefore, the pressure
for growth will come from sides and different stakeholders. Management owners and
shareholders looking forwards for potential growth fro the investments by adding more
hotels and expanding horizontally. Labour looking for career advancement opportunities
and the expansion of network could passible provide more career mobility to the market.
The paper also indicates customer perception from on which puts pressure on the hotel
companies to stay competitive by expanding to destinations the they frequently travel. This
brings to the understanding and contribution of those brands having more properties in
more major location to offer a stronger loyalty proposition to the market. Unlike other
organizations in the like manufacturing could face greater issues in expansion due to
securing the supplies and lowering average cost of production.

This paper therefore reflects into theoretical foundation of the competition based on
globalization drivers whereby through achievement of growth hotel companies can build
competitive advantages and strength to attract their customers by creating barriers to fence
from global competition in the lodging market whereby competing with International
brands.

Methodology

The author of this study creates conceptual paper from building blocks of the knowledge to
structure a theoretical framework in order to develop the research paper. In his concept
analysis of the philosophical inquiry was used based on intellectual analysis. Traditionally
speaking no empirical either qualitative nor quantitative investigation was used in order to
clarify the meaning of concepts. Therefore, the research paper has conceptual outcome
whereby the author describes the available literature based on interpretation of knowledge
from different resources available. Moreover, the paper can be improved by starting
empirical analysis based on examination of Asian lodging environment by conducting
qualitative study to determine perception of owner’s and shareholder regarding the current
economical condition and competitive advantages of expansion. Consequently, the research
outcome can possible develop hypothesis and determine relationship between variables of
expansion and international exposure of Asian lodging properties.

Findings and significance

Author highlights the importance on strategic development choice of Asian lodging
management since little literature has been done. The researcher paper reveals lack of
Asian based theories that are generic strategic based on theories and despite the western
modern theories and not always applicable in Asian market environment. Faced limitation
from literature available on the history and development path of Asian companies has
focused on non-hospitality businesses and conglomerates. While many Asian hotel
companies do share similar strategic development conditions and heritage as other Asian-
based multinational enterprises, there have been few attempts to better understand the
growth of this sector. Research can create more prospects towards development of special
or exclusive models/theories that are especially applicable to Asian hotel companies,
can explaining and exploring therefore observing the phenomena, capture business
investment decision frameworks and predict future corporate behaviour. Therefore,
case-study driven methodological approaches based on one specific organization
would bring more insights on strategic management and advancement. Moreover,
investigation perception and corporate behaviour towards expansion and further
challenges in basing lodging properties in non Asian destinations. Author of this paper
provides a high level of guidance for what Asian hotel groups need to do to expand
their business internationally outside of Asia or their traditional markets. Non-Asian
hotel groups would also learn from this Asian wave of hotel development.

Contribution to the study and evidence from Malaysia and China

China

With global economic fluctuations and the rising costs of labour and raw materials,
demand for hotels was generally weak. Due to fierce competition from short-term
rentals and other new styles of accommodation, hotels were adversely affected and
posted a decrease in the average daily room rate, which was despite a slight rise in the
occupancy rate. International hotel groups merged with a number of high-end Chinese
hotels, resulting in a severe squeeze on national brands. There were increasing efforts
from national brands in terms of cooperation and integrating resources. Budget hotels
recorded declining growth in current value terms over the forecast period. Upgrades to
purchases brought great potential for development within mid-market hotels, which
also stimulated the transformation of budget hotels in order to meet consumer
demand. Many players within budget hotels launched mid-priced brands and also
upgraded their existing brands to achieve higher positioning, such as Homeinns and
HanTing. There was a slowdown in the previously fast expansion of hotels in terms of
outlets, returning to more-rational investment. As a result, mid-market hotels posted
the strongest current value growth in 2017. China Lodging Group led hotels with a
value share of 5% in 2017, followed by Beijing Tourism Group with a 4% share The
intention of this merger is to improve profitability by lowering costs and operational
efficiency. Shanghai Jinjiang Holdings Co bought an 80% share of Vienna Hotels
Group, aiming to complete its brand coverage of low-, medium- and high-end markets
and expand its business to the southern regions of China .Large budget hotel groups
such as China Lodging Group continued to launch mid-priced brands, seeking to
increase their share of the rising area of high-end hotels. China Lodging Group
planned to restart its previous brand – Manxin – in 2017, which focuses on premium
positioning and personalised city hotels, with a total of 50 new outlets planned to be
open by 2019. Hotels in China are seeking to provide more-convenient services with
smart devices to meet the customer need for personalisation. HanTing Youjia set up a
self check-in and check-out service, through which customers only need to scan their
personal ID and pay the bill. Considering business customers, HanTing Youjia also
established 24-hour free luggage deposit closets, laundry self-service and boarding
pass printing. Customers will pay more attention to safety and personalisation within
lodging, and as a result, the category will be further segmented into different areas,
such as the launch of more themed lodging designed for females, families or seniors.
In addition, the competition in terms of pricing will intensify. The industry will
continue with the integration of resources through mergers and acquisitions. In
addition, the number of business tourists is likely to increase strongly due to players
within lodging paying more attention to providing services and products catering to
business travellers. Therefore, developing lodging properties in china are moving
towards horizontal integration strategies. On of the main driven factors of increasing
over firm’s competitor and developing ownerships.

Malaysia

Hotels registered slightly lower retail value growth in 2017 than in 2016, with mid-
market hotels leading growth. Consumers increasingly favoured mid-market hotels
over luxury hotels as they sought to save money for other aspects of their travel, such
as shopping, food and local experiences. Unrated hotels were the only category to
suffer a retail value decline in 2017, as consumers also did not wish to compromise on
safety and cleanliness when choosing their hotels.S hort-term rentals recorded
outstanding retail value growth in 2017, due to the rapid growth in popularity of
platforms such as Airbnb. These platforms invested strongly in marketing campaigns
at the end of the review period, which helped build travellers’ awareness of the
benefits of these platforms. Therefore, lodging properties in Malaysia have to be
aware of the potential risk of losing market share and reconsider their long term
objectives in order to remain competitive. Travellers are increasing favoured short-
term rentals for the ability to mingle with locals, not to mention the more affordable
rates than hotels. Genting maintains its 3% retail value share to lead hotels amidst the
fragmented competitive environment. The player’s leadership was due to the strong
position of its Resort World Genting at the popular tourist destination in Genting
Highlands in Malaysia. In 2016, the player opened a new hotel tower, a shopping
centre and a cable car line for its Resort World Genting as a part of the 10-year
Genting Integrated Tourism Plan, while the Twentieth Century Fox theme park will be
opened in phases in 2018 amongst other attractions over the next few years. Overall
hotels are expecting to record slower retail value growth over the forecast period when
compared to 2017 at constant 2017 prices. Mid-market hotels are set to continue to
lead constant value growth, as travellers open for a comfortable yet affordable stay so
that they can utilise their budget on other aspects such as shopping and food.