Waverley House Hotel a three star, located in the West of London. Having 108 rooms the hotel is experiencing a decline in its business (Waverley House Hotel). It was observed that the Waverley House Hotel has lost 25% of volume since 2000 and approximately 5 points of decline in market share. Initially the Waverley House Hotel believed in premium pricing and established that if it keeps prices above its competition it will create a premium image and will thereby able to reap profits accordingly. This backfired the competitors’ low pricing strategy resulted in all the traffic being shifted to the competitors.
Ever since 2004 the hotel’s current strategy has been based on DARE. Its components are widespread into various areas of commercial strategy formation.
Therefore the strategic aims have been to improve service for Waverley House Hotel’s regular customers thereby building loyalty and reputation for the brand. Secondly load factors have to be improved and lastly the aim was to follow a consistent pricing policy. This was translated into a set of actions, which are detailed as follows.
First, the customers who give volume forecasts annually are to be having access to priority services. Second, capacity was aligned with the forecasts. Third, the prices were set according to this volume forecasts.
Coming to passenger shuttles the Waverley House Hotel worked on a strategy to restore declining margins. Certain actions were undertaken to bring the strategy into practice was to adjust capacity to meet demand in target segments and the fixing of prices according to date of reservation and the load factor. It also included a communication strategy based on value additional of Waverley House Hotel shuttles and on the price and ability to provide a service suited to the needs of the customer. The idea was to basically build an illustrative image in the eyes of the consumer hence strengthening the brand and creating a product offering that was superior to the competition not only in terms of functions but also in terms of emotional associations.
Another focus is on the control and reduction of costs. This is to be primarily done through the reduction of costs associated with over capacity in the hotel. A review of suppliers and contractors was undertaken with the objective of systematic need challenging, greater use of standard products and other measures.
One of them includes best practice with suppliers surpassing industry standards. This was intended to be achieved at every step of the procurement chain. Another strategy was to achieve a more structured relationship with the suppliers; eliminating adhocism and establishing well defined and agreed upon procedures in dealing with third parties.
Hence, overall the strategy has been to become a partner for regional development. Being a partner for regional development means collaborating with the regional network on various projects, some of which have already been achieved, the rest are to be followed according to the timelines. Expansion is therefore a key target for the Waverley House Hotel management.