Throughout this text, an analysis of The Student Hotels will be conducted in specific regard to its direct and indirect competitors, current market attractiveness and competitiveness and its competitive strategy. Evidently in the growth period, the hotel must understand its current position in the market notably in comparison to competitors and identify future opportunities and threats. Continuous improvement made to the competitive strategy of the hotel should consequently improve its overall popularity and profitability.
Direct and indirect Competition
The Student Hotel provides both stylish boutique accommodation for guests in general and extended stay options for students to cater to a large target market. Additionally, the properties present in-house services such as restaurants and bars, conference room bookings and bike rentals. Ultimately, the hotel-chain aims to create a stimulating environment for guests in a luxurious setting and instil a sense of excitement in the global community.
As TSH is a collection of related location-based businesses around major cities in Europe this analysis specifically targets the property headquarters, located in Amsterdam.
|Direct Competition||Indirect Competition|
|Boutique Hotel||Boutique Hotels all over Amsterdam city Luxury Hotels all over Amsterdam city CASA: online booking platform providing rentals, meeting and event rooms for students and hotel guests.||Hotels in general Hostels Airbnb House-boat rentals Private Homes Restaurants and Bars in the Area|
|Student Accommodation||Jansen: provider of short-stay hotels for students, graduates, and young professionals CASA: online booking platform providing rentals, meeting and event rooms for students and hotel guests.||Rooms offered by Universities Student Housing Corporation Rentals: Airbnb Private Homes Conference Rooms rentals KamersAmsterdam Several search engines providing rental listings from housing corporations and real estate developers (Karmel.nl, Housing Anywhere, Students for Students, Pararius, Funda, ASVA Student Union)|
Looking at their competition with a customer-centered perspective, direct competition can be narrowed down to hotels providing short and long-stay accommodation for students, boutique and luxury hotels.
Porter Five Force’s Model
Considering the existing broad market, the threat of new entrants is relatively low. Hotel chains have the relative advantage of an already existing brand image.
Additionally, a restriction of the construction of hotels in specific areas in Amsterdam has been given by the government in 2015 and therefore reduces the chances of new hotels arising in the center of Amsterdam.
The power of suppliers is relatively low, taking into account their abundance.
TSH mainly source their food and beverage supplies locally and responsibly and values a close relationship with their suppliers having implemented their own Code of Conduct.
As the concentration of buyers is exceeding the market players, the buyers are subjected to have a high bargain power. This performs pressure to be able to differentiate from other hotels and have a competitive price.
Usually, the threat of substitutes is considered relatively low. Reflecting on the current recession in the hospitality industry caused by COVID-19-Pandemie the threat of substitute services rises. Various potential guest will have canceled their reservation and will consider staying at home.
Differentiation Focus as Competitive Strategy
The competitive strategy The Students Hotel chose to apply is the differentiation focus. TSH differentiates itself from youth hotels by raising the standards to a higher quality hotel for students as well as for people who want to stay in a hotel where they can find a studying or work environment prone to creativity and productivity. This hotel focuses its efforts on serving customers who don’t only travel for the purpose of study or work but also share common values and trends such as sustainability.
Red or Blue Ocean?
By raising the standards and reacting to the demand TSH comes across the class leader on the industry. Coming from the idea of a Youth Hostel where travelers stop by to meet other people, The Students Hotel wants to bound the people who meet between their walls to form a community. These are the main steps that have been made from a Youth Hotel to The Students Hotel which leads to this blue ocean strategy:
The standards have been raised. You won’t step into a cheap and dirty hotel as some of the Youth Hotels you may find in diverse countries. Therefore, the price will rise but so will the quality.
The purpose of the hotel changes in the way that targeted customers aim to stay in a hotel where a study/work environment is available.
If you want to connect people you have to focus on their shared values and expectations. An example here would be THS’ focus on sustainability.
“But we have a greater purpose – to use our spaces and our operations to inspire our customers to go and consciously change their behaviour for the better.“
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