Title: Marketing Analysis of Travelodge UK

Summary:

Travelodge is a successful hotel chain in the UK which serves millions of

customers annually. The company provides effective training to its employees so

that they can serve their customers well. The company has gained a competitive

edge of low priced but high quality services to its customers and this strategy has

been quite successful for over the years. One of the most effective marketing tools

practiced by Travelodge is the use of digital marketing and advertising. It was the

first hotel to launch an effective advertising campaign. Moreover, the company has

positioned itself well among its business and leisure class customers. For the

detailed market analysis of this company, qualitative research methods were used.

Primary research analysis was conducted with the help of interviews and

questionnaires. The secondary research analysis was done through various analysis

tools like PESTLE, SWOT analysis. It is the need of hour to target international

customers as well with the use of marketing tools so that the company can compete

well with its competitors.

Organization Overview:

Travelodge is one of the biggest hotel chains in the United Kkingdom having more

than 40,000plus rooms and 560hotels in England, Spain and Ireland. Travel lodge

was built in 1985 with more 11,000 staff working in its different chains. The company

has effective career support and different types of training for its employees. One of

their key marketing strategies is providing its customers with accommodations that

are competitively priced. Travelodge has strong growth plans of opening around 150

new hotels in the next eight years. It will also be investing over £100 million in

renovating their infrastructure (Rutakirwa, 2018). Travelodge’s United kingdom

generated revenues of around 284m £ in 2020. There was a decline of

approximately 61% because of theimpact of coronavirus pandemic on the hospitality

sector of the world (Lock, 2021).

Travelodge has adopted a number of digital marketing tools especially social

media tools to build awareness among its customers regarding their products and

services. Direct marketing is also one of the tools adopted by this company. Public

relations is also considered as a crucial factor for the promotion of its brand. It has

also devised many marketing campaigns for the advertisements of its products and

services. In 2010, Travelodge adopted a new marketing strategy named as ‘’Sleep

Tight” for ensuring a good night’s sleep. Advertisements were designed for this

campaign. The main idea behind the launch of this campaign was to not only allow

the customers to have a comfortable place to stay, but also let them have a great

experience by having sound sleep at night. This marketing strategy was quite

successful, as around 5500 employees were trained and customers’ experience of

staying at the hotel was made more satisfactory. Such unique changes in marketing

strategy allowed Travelodge to become successful (Johnson, 2010).

The marketing strategy of Travelodge requires proper positioning of the

company in the hospitality market sector. There must be a suitable positioning of the

performance of Travleodge within its customers. Positioning helps in creating a

positive image in the minds of the customers and Travelodge is doing so by

providing high quality accommodation and services to business class and leisure

class customers. This has helped the company in achieving success and remaining

on top of their competitors. For its intended target audience, Travelodge uses

different digital mediums like Facebook, Twitter and Internet related marketing

(Sengupta, 2005). According to EU27 Hotel Brand Rankings 2011, Travelodge brand
has shown the maximum growth among other hotels like Premier Inn, Best Western

and Ibis. Travelodge has remained among the top ten hotels by showing a growth of

11% in the room supply development (Hospitality On, 2011).

Literature Review:

Marketing has long been used by organisations and businesses as a means of

business management to communicate to the target audience about their product or

service offering. Over the years, companies around the world have been using

different marketing strategies through multiple platforms, with an underlying aim to

achieve competitive advantage. In current times, companies are increasingly

realising the significance and critical need for digital marketing, and continue to

employ both traditional and contemporary/digital marketing in their overall marketing

strategy (Herhausen et al. 2020).

With the rise of digital technologies, companies are able to leverage on new

business opportunities (Kannan & Li, 2017), as well as shift from a brand focused

approach to a customer focused approach, which has allowed them to gain a

competitive advantage (Mithas, Krishnan and Fornell, 2005). Where traditional

marketing entails traditional marketing approaches, such as print and electronic

media marketing, digital marketing entails contemporary or technology-based

marketing approaches, including social media marketing or web-based marketing,

for example through search engine optimization (Palmer, Lindgreen & Vanhamme,

2004). While digital marketing is more cost-effective and has a deeper market

penetration as compared to traditional marketing, Guven (2020) argues that with

more and more companies entering the digital world, the market has become denser

and more competitive over time.

The transition from traditional to digital marketing took place when the

demand of the products increased and as a result of it, the production also

increased. With the advancement of technology and introduction of TV into the lives

of customers, the world got a new perspective about marketing. Advertising became

stronger. Competition increased and as a result of it, the choice of customers also

got varied due to a variety of products available in the market. This all led to the rise

of digital marketing. Companies started putting the interests of their customers on

the front instead of making profits. For this purpose, company used electronic tools

to advertise their products and hence, digital marketing gained importance. (Durmaz,

2016).

Where the term brand refers to a product or service differentiated by its

positioning relative to their competitors (Keller, 2001), brand identity is essentially

how a certain brand is itself identified, with its unique features like vision, culture,

personality, positioning, relationships and values etc. (Mindrut, Manolica & Roman,

2015). According to McCabe (2009), in the hotel industry there is often little

differentiation between the primary service offers of competitors. This is why hotels

aim to seek key points of differentiation, and communicate these unique features

using a strong brand identity. For this, McCabe (2009) proposes an integrated

marketing communications approach to ensure that all stakeholders are aware of the

strategic aims, vision, and values of the brand. This implies that hotels should

integrate both traditional and digital marketing for their marketing communications.
 Of the key communication strategies, brand positioning is the next essential

concept that academicians discuss most in literature. According to Rutakirwa (2018),

brand positioning refers to how a product or service is differentiated from that of the

competitor in the consumers’ minds. This could be identified in reference to the

target audience, the platforms through which the brand/s reach them, their core

product/service offering, their competitors, and their unique selling point (USP)

(Entrepreneur Europe, 2018). Positioning could be done based on product pricing

approach or product quality approach. In product pricing approach, the brand

associates itself with competitive pricing, whereas in the product quality approach,

the brand associates itself with the quality aspect of the product or service. In the

latter, the brand may even charge more price to cover the increased cost of

producing high quality products or services (Rutakirwa, 2018).

According to Kotler, Armstrong & Opresnik (2018), positioning is key as it

allows Travelodge to determine the market niche it should fill. In the past, Travelodge

has followed the product pricing approach by offering competitive prices of £5 per

room across Ireland and the UK (Travelodge, 2004). Rutakirwa (2018) suggests that

Travelodge should employ the product quality approach. With £100 million recently

allocated to the modernisation programme, Travelodge can easily use the availability

of these financial resources to create segments for the five-star hotel industry.

Moreover, Travelodge has developed a strong positioning in the market over the

years. Being the largest independent hotel brand in the UK, with over 560 hotels and

40,000 rooms in Ireland and the UK, it is likely that consumers along with the market

itself can welcome a premium products category like Travelodge Pro (Rutakirwa,

2018).
Market Research Approach :

A qualitative market research is adopted for understanding the marketing strategy of

Travelodge. For this purpose, the qualitative research will adopt various ways like

observations where survey of the company will be conducted to observe the current

marketing strategies of Travelodge. Gaps in marketing techniques will be identified.

Employees will be asked different questions on the marketing strategies of the

company. These questions will be asked based on one-on-one conversations.

Different discussions will also be held in focus groups and analysis of these

discussions will be carried out. Different surveys will also be conducted distributing

questionnaires with open-ended questions.

Newspapers, annual reports, marketing research reports, government reports and

other already published reports related to the hospitality industry will be used for

secondary sources of research.

The probability sampling technique will be used for conducting the survey.

The benefit of choosing probability sampling is that it provides bias-free

samples.Because it is simple random sampling. Each participant of the sample

population has an equal chance of selection in such sampling. It is the most suitable

type of sampling for data collected through surveys (Horton, 2019). The data

collected for this research involves the analysis obtained from literature review

regarding the traditional and digital marketing approaches, different marketing

analysis tools such as SWOT analysis, PESTLE analysis, targeting and

segmentation, positioning etc. along with the analysis of primary research obtained

from questionnaires and interviews.

 The literature obtained from extensive research from books, internet, research

articles and newspapers suggest that Travelodge has been successful in creating a

brand image throughout the years by adopting different marketing techniques that

have been used in different eras. Travelodge was founded in 1985 when hospitality

marketing was going under revenue management and brand development. Revenue

management involved the use of new data resources where expert market analysts

having the detailed knowledge about this sector were needed. They also had the

knowledge of computing systems. At that time, many large and luxurious hotels

started hiring revenue managers which helped the hotels in maximizing their

revenues. This was one of the most successful tools of that era which is still

considered quite important. Along with revenue managers, visionary leaders were

also needed who led their hotels towards new and extended boundaries of brand

development and brand management. Brand development and brand management

involve the communication of vision, mission, goals and strategies of the company

with its stakeholders and customers. It is quite crucial to involve customers in the

brand awareness process as customers are the key to success of the organization.

Without seeking the approval and involvement of customers, no brand can progress

and work well among its competitors. Travelodge, right from the start of its business,

realized the importance of branding, promotion and communication with customers

and that is the reason; it maintained a good reputation from the beginning (Dev,

Buschman and Bowen, 2010).

Findings

Primary Research Analysis :

 The primary research analysis was conducted after the careful analysis of the

data obtained from primary research such as questionnaires and interviews. The

questionnaires and interviews discussed the effective marketing strategies adopted

by Travelodge management. It revealed that Travelodge has always gained a

competitive edge with the help of its cheap and affordable pricing techniques. It is

regarded as one of the cheapest hotel chains that offers high value for money.

Another successful marketing tool adopted by the company is customer convenience

as it has always focused on providing cost effective and high quality services to its

customers. Travelodge has also used digital tools like an online booking system

which has led to the ease of the customers.

Secondary Research Analysis :

The secondary research data was obtained from PESTLE analysis of

Travelodge. PESTLE analysis is a detailed marketing analysis of any company

which involves six factors Political, Economic, Social, Technological, Legal and

Environmental analysis. It is a significant business analytics tool (PESTLE analysis,

2021). The PESTLE analysis of Travelodge revealed that the Digital Economy Act

(2010) created problems for the company as the company needed to decide whether

it would charge the internet connectivity facility from its customers. Travelodge

provides its customers with high quality services at low prices thus, maintaining an

economic success for the company. The social factors involved the changes in

traditional ways of manually booking the rooms to an online booking system which

provided an ease to the customers. The company has also made many successful

technological advancements like use of digital technology, internet facilities etc.

Legal and environmental factors include complying with different laws of the country
for the hospitality sector and preserving the environment using eco-friendly ways and

products.

Competition:

The following table shows the list of the competitors of Travelodge and

revenue generated by them.

Sr. No. Competitors Revenue Generated

1. Travelodge $859.5M

2. EasyHotel.com $14.3M

3. Premier Inn $7.9M

4. Millennium Hotels and Resorts $1.3B

This is the latest data collected about the competitors of Travelodge along with the

most recent revenue generated by them. It shows that Travelodge is among the top

hotels in England. However, it has a strong competition with Millennium Hotels and

Resorts as they produce revenue in billions rather than millions. That is why;

Travelodge needs to work hard further for generating greater revenue (Owler,

2021).

SWOT analysis

Strengths :
 The key strength of this company is targeting middle end consumers. It offers

all kinds of services to its business class and leisure class customers. It is

considered the first hotel who used an advertising campaign to create brand

awareness among its customers (Sengupta, 2005).

Weaknesses:

The company only serves middle and lower income group travellers rather

than serving high end customers. It also fails to target global customers as most of

its branches are located in the UK only.

Opportunities:

It needs to grab the opportunity of having increased marketing share in the

industry. Moreover, if it targets the environmental friendly services like producing and

using eco-friendly products, it will be quite successful.

Threats :

The major threat faced by Travelodge is the huge competition it faces from its

competitors in growth and development of premium class accommodation (Lamb,

Hair and McDaniel, 2011). The overall marketing analysis of Travelodge is explained

with the help of following chart:

STP Framework :

Segmentation:

The segmentation tool for marketing is quite essential as it gives the

information about which market to be served. As Travelodge provides

accommodation and restaurant services, its market is segmented between the

business class and leisure class customers. Business class customers are those

who usually stay in hotels for attending business meetings and conferences. The

leisure class usually stays in hotels for vacationing purposes.

Targeting :

The targeting tool for the market is crucial as it provides an opportunity to the

business to target its intended audience which is business class and leisure class in

case of Travelodge. It also provides low cost and high quality services to its middle

class customers. It also needs to target international customers through digital

marketing tools (Aeker, 2000).

Positioning :

Travelodge’s marketing strategy requires its performance to be positioned

among its customers. Positioning will create a brand image in the minds of the

people. It needs to position itself as a high quality accommodation and service

provider in the eyes of its local as well as international customers.

The Mix:

Marketing mix is “a set of marketing tools that the firm uses to pursue its marketing

objectives in the market” (Kotler, 2000). With Travelodge being a service company,

7Ps of the mix will apply namely, price, product, process, physical environment,

place, promotion, and people. In products and services, Travelodge specialises in

offering accommodation and hospitality to travellers and/or those on business trips,

including luxuriously furnished rooms fully equipped with all necessary amenities etc.

They offer these services at competitive prices. Their process entails the booking,

making reservations and payments both online or at the location. They now have
mobile apps that conveniently support online bookings. Their hotels are accessible in

major physical locations and places like London, Madrid, Barcelona, Manchester,

Belfast etc. and Britain’s larger towns, seaside locations, and roadside stops as well

(Travelodge, 2018).

Conclusions and Recommendations :

Travelodge is regarded as one of the most successful hotel chains in the UK.

The reason behind its success is the high quality provision of services to its

customers at low and affordable prices. The company has managed to maintain its

brand name among top brands of the hospitality sector by the use of different

marketing strategies and adopting advanced marketing tools such as the use of

digital marketing and advertising. The company needs to target its international

customers as it is the only way through which it will make a mark among its

international customers. This can be done with the help of effective digital marketing

tools like the internet and the use of social media. The company should open its

franchises in different parts of the world so that it can gain the attention of

international customers. Moreover, the company needs to find better ways to explain

its vision and mission statements through its services. The company should also find

ways to become more cost-effective which can become its competitive advantage.
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Appendix 1. Reflective Statement

This reflective statement has been written using the Gibbs Reflective Cycle having 6
stages: description, feelings, evaluation, analysis, conclusion, and action plan
(Gibbs, 1988).

Description :
I choose Travel Lodge the leading hotel chain for my Imarketing research report
based and I tries to complete it in the given timeframe of 3 months. While completing
my report, to analyze marketing strategies of Travel Lodge and competitors I used
both primary and secondary data sets. I analysed its current situations and
problems, studies the previous researches, and analysed the marketing mixes. My
final recommendations and conclusion are based on the study of above-mentioned
marketing mixes and research.

Feelings :
It was long and tough journey, which was very stressful, but I got confidence when I
understood the concepts. It was complet a new task for me. Some of the things were
quite challenging for me: firstly, finding appropriate, accurate and relevant academic
literature and secondly how to link that with my case. However, I was successful due
to the guidance of my teacher, suing the learning materials provided by blackboard
and of course availing library facilities.

Evaluation :
Firstly, I have completed the difficult task of literature review, Then I moved to
collecting the data through online questionnaire in form of surveys. At last, I worked
on marketing mix, of the Travelodge with the help of seven P’s. I know I had to do a
lot of work but couldn’t do that because of the workload of other courses and also the
time restrains. I tried to give the best of my ability under the tutorship of my
professors and lecturers taught in the class.

Analysis :
It was a positive experience for me to know about how to write a research report,
how to conduct, and interpret data, I learnt how a company can run their business
with marketing strategies. Both traditional and digital strategy is helpful for a
business but in the present pandemic context, I think digital strategy is more
convenient.

Conclusion:

I have tried to do the work within the structure and deadline given. I learned that to
success both strategy and competition is essential, but the former is more important
to achieve the goal than the later. Because without a comprehensive strategy it is
impossible to achieve goals and objectives. Furthermore, with right strategies and
plans we can help to defeat our competitors as well.

Action Plan:

This assignment gave me some marketing knowledge which will, no doubt, be useful

for my future career. I will try to use this experience in my workplace. This module

and completing the whole project will help me in my practical life. I can use this

learning in my future practical life. I am planning to start career in marketing

especially the digital marketing. This module will give me an edge over others.

Because this module taught me how to research on target customers, companies,

your competition, setting goals and objectives and how to achieve them. How to

control a setback, come up with a contingency plan and in the case of failure how to

learn the lesson and avoid them in future. Overall, I am satisfied with the learning

outcomes of this module and hopeful that it will be immensely beneficial in the future.