01.

Situational Analysis (Marketing Audit) Light House Hotel

1.1 Company Background.
a. The Company

The Lighthouse Hotel PLC was established in 1994 and which is the member of
Jetwing family of hotels, this hotel is close to the historical city of Galle, Sri Lanka.

It bears the distinctive architecture and design one of Sri Lanka's most iconic geniuses,
Geoffrey Bawa. Jetwing Light House targets up-market leisure and business travelers.
With that they have 63 rooms including three themed suites. In addition, they have
Jetwing Kurulubedda which is a boutique hotel with two private dwellings and four
rooms plus the exclusive Jetwing Lighthouse Club with 22 rooms including two themed
suites.

Mainly Light House Hotel is targeting the travelers from Western, European, China,
Oman and Russia Similarly the second major market is South Asia. That is their main
target market for their products. As usual they also target revenue from local markets as
well, normal people, etc.

The vision of the Light House Hotel plc is to “be world class in everything we do”. In
achieving the aims of vision, its mission statement is given like this, ‘To be a family of
people and companies committed to legendary and innovative service leading to high
stakeholder satisfaction’ And also Jetwing Family bank has unique characteristics such as
Passion, Humility, Integrity and Tenacity. With those values, Light House Hotel has
unique products to their targeted customers, they have two type of available rooms. One
is Suite and another one is Deluxe.

Suite is –

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 This included with three brilliant suites, each with a unique theme, which has most
indulgent comforts and every possible amenity. The themes of the suites pay homage to
the ancient travelers from distant lands who sought the treasures of their bountiful land.

Deluxe is –

These types of rooms offer the highest standards of the luxuriousness. In Galle, Deluxe
Rooms at Jetwing Light House are the beautiful havens that will provide customers to the
maximum comforts.
They have their own uniqueness such as Light House hotel is the ultimate tropical
retreat amidst the sun, sea and sands of the southern coast and also Jetwing Light House
exudes an old-world charm of elegance and minimalism that is combined with fantastic
service, scrumptious cuisine and a wide selection of facilities and activities. The hotel
terrace is ideal for a drink and a chat while overlooking a spectacular Sri Lankan sunset.
These kinds of comfort and facilities won’t be taken by anywhere in Galle city.

When it comes to the Branding of the Jetwing Light House, they have their own brand
identity. “Often, words don’t do justice to an experience.” This is true when trying to
explain what it is about the Jetwing Lighthouse stand for, that is uniquely different from
other properties. From the choice of location, through its architecture, appointments and
culinary excellence to the human touch that lends character to their service, these are all
shaped by the Jetwing ethos of “working with rather than for”; of keeping environmental
concerns top of the mind; of deep passion and commitment to an industry; of being proud
of being uniquely Sri Lankan; of being truly a partner in the local community and a
million more facets like these. Comparing to other Hotels Light House hotel has its own
identity.

Customers can see a certain difference of Rooms, facilities comparing to other hotels.
Unique selling proposition of this brand is customers can consume real heritage value
with maximum comfort with Indian ocean sun set. This are the special feature that light
house hotel has given.

When it comes to the hospitality services, reputation or the image towards to the brand
is very important. In Jetwing Light House, they have good image in the market Since they
as a member of Jetwing family where its fundamental culture and values are concerned.

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 When it comes to the Financial side of the Hotel, they are maintaining good image to
the stakeholder and to the employees also. When look back to the finance history, last
five years’ profits were generated ethically and gradually.

b. Sales for last 5 years of Light House PLC,

REVENUE (Rs. Million)

1000

800

600

400

200

0
2012 2013 2014 2015 2016

REVENUE (Rs. Million)

(Source: Annual Report of Jetwing: Assumption: - this chart is shown only the revenue
progress)

If chart is carefully checked, it can be seen steady progress was shown during the last
five years. When it comes to their Product Life Cycle, at present Light House Hotel is in
the growth stage. These days’ Light house hotel is having a rapid growth. In year of 2016
they could earn 836 Million total revenue comparing to last year. Last financial year
(2015/2016) they had the highest growth in terms of total revenue.

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 Year Revenue Rs.’000

2012 539,192
2013 614,727
2014 681,105
2015 731,743
2016 836,072

c. Current Market Share

When it comes to the Hospitality markets, Western and Europe is one of their most
important market to the Light House Hotel plc. During the winter season, 60% to 70% of
their income is derived from customers from that particular market. And also, tourist
arrivals from India grew by 16.3%, whilst China recorded the highest growth of 136.1%.
Oman and Russia followed with 67.1% and 36.1% respectively. Light House Hotel
revenue of 60% is based on the Europeans, Due to the growth in the non-traditional
Markets, the European market share is suddenly decreased. With a new administration at
the help of affairs in Sri Lanka nontraditional markets shown a massive growth and it
contributed a big part to the whole tourism arrival. Therefore, the European market share
is decreased 33% to 31% due to the nontraditional markets increment.
With that total assumed market share for the Light House Hotel would be,
Total Revenue from tourists in 2016 – 2.2Billion and Light House Hotel revenue is 836
Million. Can be assumed Light House market share would be 38%.
Thus, improving the relationship with European countries and the affairs between the
European government and local government is more helpful to share traditional values
with each other’s. Through that these types of hotels can re-captured the market share as
previous.

As above mentioned, they have separate products for separate target groups. When it
comes to each product, they offer separate packages, such as

d. Pricing Methods

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Deluxe Rooms –

Bed and Breakfast: From LKR 24,800/-

Half Board: From LKR 27,500/-
Full Board: From LKR 29,750/-

Suite Rooms –

Bed and Breakfast: From LKR 39,800/-

Half Board: From LKR 42,500/-
Full Board: From LKR 44,750/-

So, the prices are being offered in 6 slabs like above mentioned.

e. Promotional Activities

Mainly Light House Hotel offering special offers to their customers. Such as, “Book 30
days prior to the date of arrival and enjoy 15% off! Stay period from 01st November 2015
to 31st October 2016 on all meal plans for all room types”. These types of promotional
tools help to attract customers to the hotel.

f. Current Distribution System

Mainly Light House Hotel is categorized under services provider, so they don’t have
any special distribution system. Only the way is, customers have to come and experience
the service. But customers can directly select the relevant rooms and packages by visiting
to hotel or Customers have facility to online booking through Light House Hotel website.
In online booking customer have chance to check whether the rooms are available or not
for the required period. So, their distribution is going in that way.

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 1.2 Customer Analysis

a. Target Customer
The second highest growth in terms of tourist arrivals, after the Americas, was
recorded from countries within Asia and the Pacific Rim at 5%. With regarding to
Jetwing Light House, Western Europe is one of their most important markets. During the
winter season, 60% to 70% of Light house hotel income is generated from customers
from that particular region.

 What do they buy?

Core objective which needed to be satisfied is entertainment, staying and
pies to the mind. It is based on customers to customers and purpose to
purpose. Some may live for business purpose; some may live for spend their
leisure time comfortably.
 Why do they buy?
The reason to choose Jetwing Light House is based on the strength in online
marketing and their brand positioning. These thing emphasis light house
values to their target market. Through the help of branding and marketing
activities customers are choosing Light House Hotel for spend their time in
leisurely. Not only that, but also they are providing value added services to the
customer such as Foreign exchange, IDD Facilities, Facsimile, E-Mail and
Internet services (Free Wi-Fi), Doctor on call, Laundry/Dry cleaning, Car
Rental, Etc. The important aspect is that they have All rooms with a private
terrace or balcony with a clear view of the Indian Ocean. This facility may not
available in any other hotels all time. In light house, all rooms are located
facing to Indian ocean with a balcony.

 How do they buy?

Through the online marketing or promoting website people get to know
Light House Hotel. Through web site customers can do bookings or customer
can call to hotline number of the light house or by direct visit to the hotel
 When to buy?
People don’t appoint a specific time to spend their leisure time with their
family or with their lovers but the period between the December season

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 Jetwing Light House Hotel is the best place for experiencing the piece to the
mind.

When it comes to the buying behavior process of the customers, they are mainly go
through the need recognition. Which means customers should identify their need. In
relevant to the Hospitality industry may be spend the vacation, came to Sri Lanka for
business purpose & living for short term, tourism purpose or etc.

Whatever the need arises these customers searching information to fulfill their needs.
They search information mostly through the internet. So, Light house hotel has online
website which consists of all the information which relevant to the information seekers. If
the customer has gathered enough information, they are going to the third stage.
In the third level, they are going to evaluate what they have found. Considering
heritage value and Light House unique facilities, it’s easier to evaluate this Hotel. After
picking up the Light House Hotel, customers can simply do the bookings and other
payments through their website. Customers can view the available rooms with the
required dates. All the arrangement, facilities are available in the Light House website
itself.

1.3 PESTEEL for Light House Hotel

Economic

 Risk arising due to the volatility in foreign currency exchange rates - Impact on
profitability.

 Global international tourist arrivals (overnight visitors) increased by 4.4%.

 VAT 11% - 15% and it was implemented mid of 2016. It was directly affected to
the cost of the sale and hotel revenue.

Political

 Whilst the winter peak was affected by the uncertainty surrounding the
elections.

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  During the year 2015 / 2016 local politicians suggest decision to increase VAT.

Technological

 There is not a much influence from this environment. But if Light house
has a strong IT system they can provide a better service to clients. E.g.; -
smart rooms.

1.4 Market Analyze for Light House Hotel

When it comes to the Hospitality industry, there is a massive growth have been shown
during the last five years.

(Source: Jetwing Light House Annual report)

According to the World Travel and Tourism Council, travel and tourism contribution to
world Gross Domestic Product (GDP) grew for the sixth consecutive year in 2016. And
also, there is a forecasted growth of 4% in travel and tourism industry for another ten
years ahead. The tourism industry ended the year 2015 on a high with an 17.8% growth in
tourist arrivals over the preceding year. It seems there is a trend in the market of
improving tourist arrival growth. So, this is good opportunity to the hospitality industry.

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 1.5 Competitor Analysis for Light House Hotel

a. Primary Competitors

When it comes to the Hospitality industries, there are number of companies operating
in the market. The main competitor hotel where operating in the Galle is Galle fort hotel.
They are the direct competitor for the Light House Hotel. When considering Colombo,
there are many number of hotels being operated such as Cinnamon Grand Colombo,
Hilton, Etc. The competition is high when it takes the country as whole. In the Galle
district or regional wise Galle Fort Hotel is the main competitor for the Light House.

b. Secondary Competitors

There are number of hotels operating in the Galle district which stand for giving
separate values. Among that Mango House, Thambili House, Cocobay Unawatuna, is
competing as secondary competitor.

 Galle Fort Hotel

When it comes to the Gall Fort Hotel, in 2007 they won UNESCO awarded the hotel in
the Asia Pacific Heritage Award of Distinction, calling it “a masterpiece of cultural
heritage and conservation”. today, the however the Light House Hotel is the one of the
best historic hotels in Galle. The thing is many foreigners would like to live in heritage
environment. So, these all facilities will be provided by these two hotels.
Not like Light House Hotel, to give maximum competition even Galle Fort Hotel is more
focusing to the heritage look to their products. When it is considered rooms, those are
look heritage value, the wood, Buildings, etc. They have separate facilitate rooms such as
Garden Rooms, Loft Suite, porcelain Suite, Admiral Cheng ho Suite, Library suite and
grand apartment suite. So, customer can choose whatever type of product in relevant to
the requirement.

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When it comes to the pricing,
Garden Rooms – 152/- USD
Loft Suite – 183/- USD
Porcelain Suite – 190/- USD
Admiral Cheng ho Suite – 197/- USD
Grand apartment – 226/- USD

When it comes to the distribution part, Same as other hospitality industries, Customers
can directly visit to the hotel or customer can arrange the rooms and can do booking and
make the payment through the hotel websites.

2. SWOT Analysis for Light House Hotel

Strengths:

 Being a member of Jetwing Hotels.

 Having a strong director board including well experienced professionals.
 Enthusiastic and well-disciplined customer oriented staff.
 Light House Hotel is awarded the ISO 15001 Energy Management
Certification.
 Capability of giving special discounts for regular guests.

Weaknesses:

 Not enough activities to establish the brand equity.

 Less habit to Continuing CSR activities.
 Not enough corporate image.

Opportunities:

 With the growth of the tourism arrival in Sri Lanka, more revenue can be
generated.
 With the growth of the European tourists, Light house can give additional
values to them for future business and can be retain them. It will help to
control market share without losing like previous. So, the growth of the
Europeans is good opportunity to Light House Hotel.

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Threats:

 Tourists have a trend of living in some apartments who come for business
purpose. They skip hotels and other facilities. Due to rapidly growth of
short term rental apartments.
 Taxes imposed by the government.
 Cost of sale is high due to inflation.

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