This is an example of company analysis in Marketing at a basic level.
Fairmont was founded in 1886 and used to be called Canadian Pacific Ltd until changing its name to Fairmont Hotels and Resorts Inc. in 2001. Fairmont now is the largest luxury hotel company in North America. The company provides variety of services, such as: travel packages, President’s club, Willow Stream Spas, Golf and Skiing, etc. (Fairmont, aboutus)
Fairmont Hotels and Resorts Inc., a Canadian owner, is owned by FRHI Hotels and Resorts. The French chain Accor has just acquired FRHI with their 3 famous brands of Fairmont Hotels and Resorts, Raffles Hotels & Resorts, and Swissôtels & Resorts. (Fairmont, Articles, 2015). This will merge Fairmont with a large group in the worldwide travel industry.
Figure 1 shows Fairmont hotels and resorts Inc.’s performance in the period 2012 – 2014. The company has 21 outlets in Canada, with average 504.9 rooms/outlet. Sales per outlet had been continuously increased from 2012 to 2014, reaching CAD$ 41.3 million in 2014. (Euromonitor, Key Performance Indicators, 2014)
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Fairmont Hotels and Resorts Inc. (Canada)
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2012
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2013
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2014
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Outlets
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21
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21
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21
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Rooms (‘000)
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10.6
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10.6
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10.6
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Rooms per outlet
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504.9
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504.9
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504.9
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Sales per room (CAD$)
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76.8
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79.6
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81.8
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Sales per room (US$)
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76.8
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77.3
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74
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Sales per outlet (million CAD$)
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38.8
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40.2
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41.3
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Sales per outlet (million US$)
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38.8
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39
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37.4
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Table 1: Fairmont Hotels and Resorts Inc. (Canada)’s Key Performance Indicator 2009-2014 (Euromonitor, Key Performance Indicators, 2014)
Fairmont’s market share has been staying at the 1st rank in Canada during the last recent years. It gained 5.9% in 2014. (Euromonitor, Brand shares, 2014) The Company continues to expand its business, ie. Fairmont La Marina Rabat-Sale in Morocco with 200 rooms in 2019, Faimont Abuja in Nigeria with 270 rooms (Bloomberg, 2016)
Two segments for Fairmont are as stated in the below segmentation chart:
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Categories
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Business travellers
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Family travelers
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Geographic
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- Both domestic and foreign guests
- Urban
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- Both domestic and foreign guests
- Urban and suburban
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Demographics
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- Age: 25 – 45
- Male or female
- Single or married
- White collar, professional
- High level of education
- High income
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- Age: 30 – 50
- Male or female
- Married (or equivalent), have young children
- Working
- Medium to high level of education
- Medium to high income
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Psychographics
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- Being social, judgmental, disciplined, and confident
- Requiring qualified food and environment.
- Being familiar, comfortable and connected with technology: laptop, PC, smartphone.
- Frequently using variety of media: Internet, TV, newspaper, radio
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- Being caring and sharing
- Being interested in entertaining, gaming, arts.
- Requiring qualified food and environment.
- Being comfortable with technology:
- Being familiar with variety of media: TV, newspaper, radio, out-of-home, internet
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Behaviouristics
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- Travel for business
- Want high speed internet for professional purposes
- Want modern conveniences.
- Loyalty: medium
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- Travel at leisure, for family entertainment.
- Want to relax, enjoy the trip
- Loyalty: medium to strong.
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The business people segment requires the premium quality of service as their stay is for business purposes. Professional and convenience is a must for these guests. They may not utilize many facilities that serve for entertainment, but demand the standard technology to facilitate their work.
The family travelers segment are seniors having young children. They looks for enjoyable and comfortable vacation for the family. Hotel facilities, ie. Specific services for children entertaining are great advantage.
Fairmont’s guest rooms consists of 4 types:
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Room type
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Room size (sq.ft./sq.m)
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Bed type
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Facility
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Fairmont Luxury Room
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250/23
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King, Queen, Double/Double
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- Common amenities
- Wired and wireless high speed internet access; work desk; ergonomic chair; Keurig coffee machine; bedside charging hub and reading lamp; bathtub & shower (double-bed room); shower cubicle (single-bed room)
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Fairmont Room
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250/23
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One King, One Queen, or two Double beds
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Common amenities
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Deluxe Room
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500/46
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One King, One Queen, or two Double beds
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- Common amenities
- Sitting and sleeping area (ideal for family)
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Signature Room
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500/46
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One King bed or two Double beds
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- Common amenities
- Sleek new furnishings and seating area; upgraded sleep experience
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Table 2: Fairmont Guest Rooms (Fairmont Royal York, Accommodations)
Besides those luxuriously and elegantly decorated accommodation, Fairmont hotels and resorts offer particular services for different types of customers, for instance:
- Business Services: printing technology, fax and copy, computers, conference call boardroom, graphic design (Fairmont Royal York, Business services)
- Family travel: cribs and rollaway beds, babysitting, indoor lap pool and children’s wading pool, children menu
Fairmont is a 4-star hotel brand, so the price is quite higher than the market average. Room rates vary for room types, service package as well as hotel location. Generally, the average price is in the range of $200 CAD – $400 CAD, the most luxurious rate is over 1,000 CAD/night. The below table refers room rates of Fairmont Royal York hotel, which locates in Toronto:
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Room Type
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Price
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Fairmont King NS
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From $171 CAD/NIGHT
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Fairmont Queen NS
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From $171 CAD/NIGHT
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Fairmont Luxury King Room
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From $216 CAD/NIGHT
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Fairmont Luxury Queen
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From $216 CAD/NIGHT
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Fairmont Luxury Double Room
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From $216 CAD/NIGHT
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Deluxe King NS
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From $216 CAD/NIGHT
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Deluxe Two Doubles NS
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From $216 CAD/NIGHT
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Deluxe Queen NS
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From $216 CAD/NIGHT
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Signature King NS
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From $261 CAD/NIGHT
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Signature Two Doubles NS
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From $261 CAD/NIGHT
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Fairmont Gold King NS
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From $284 CAD/NIGHT
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Fairmont Gold Jr. Suite King NS
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From $359 CAD/NIGHT
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Junior Suite
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From $434 CAD/NIGHT
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King Bedroom Suite
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From $509 CAD/NIGHT
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Luxury King Bedroom Suite
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From $584 CAD/NIGHT
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Fairmont Gold One Bedroom Suite King NS
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From $659 CAD/NIGHT
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Executive Suite
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From $1029 CAD/NIGHT
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Luxury Executive Suite
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From $1124 CAD/NIGHT
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Table 3: Fairmont Royal York room rate based on room type (Fairmont, 2016)
· Fairmont has 82 outlets in 26 countries in North America, Europe, Africa, Middle East, and Asia Pacific. In Canada, Fairmont has its 19 outlets in 5 provinces: British Columbia, Alberta, Quebec, Ontario, Manitoba (Fairmont, Destinations)
· Fairmont is expanding to North Africa, Middle East and India region, that contributes to
· Fairmont can take advantage of FRHI’s worldwide channel as it is a subsidiary of FRHI, who operates over 130 and experienced in the worldwide hospitality industry. (Fairmont, aboutus)
· Fairmont also cooperates with the agents to enhance their distribution channel. (FRHI, 2012)
- Fairmont uses various advertising on media: print, web, Smartphone, Tablet to approach different customers. (Postmedia, 2014)
- The company extensively interacts with customers via social media networks, including: Twitter, Facebook, Youtube, Rss, Pinterest, Instagram. (Fairmont, Fairmont.com Home)
- Fairmont takes full advantage of its website to provide customers with their strategic messages and advertising programs, for example: Family, Fairmont Moments, Fairmont Gold, Celebration, Discovery, Food and Wine, Gift Shop, etc. (Fairmont, Fairmont.com Home)
- Fairmont Magazine, which is exclusively published by the group, is a vehicle for company communication. “ Fairmont magazine is the in-room publication at more than 70 luxury hotels and resorts around the globe, reaching an audience of 2.7 million people every issue” (Spafax Canada, 2015, p. 5)
- The company also creates exclusive offers for customers to promote their sales through the cooperation with well-known partners, such as: Air Canada (for Air passes, Air Canada Corporate Reward), BMW (for road transportation), MasterCard and HSBC (for financial solutions), Abbey Road Studio (for exclusive events), etc. (Fairmont, Programs and Partners).
- Fairmont consolidates its brand name by the Corporate Affairs. Fairmont Sustainability Partnership Program is the way that Fairmont follow the key priorities in building a responsible business ( complying with ethic code, governance), in ecosystem (enhancing the well-being of local communities, applying immediate operations toward larger ecosystem in building construction, procurement), in environment and in engagement to support all stakeholders (suppliers, guests, community and employees)
- Being born in 1907, Fairmont started their business with famous customers, for instance: British Royal family, Claude Monet, Yousuf Karsh, Winston Churchill, Franklin D. Roosevelt, William Lyon Mackenzie, John Lennon, Yoko Ono, Tony Bennett, etc. It became an iconic hotel since very first days of opening. Therefore, Fairmont is strongly experienced in providing exclusive services to ultrahigh-class segment (Fairmont, aboutus)
- All of Fairmont Hotels and Resorts are located in great and favorable positions, some of them are in “some of the most breathtaking and pristine areas in the world”. (Fairmont, aboutus) For examples: Fairmont Chateau Lake Louise is located in Alberta’s Banff National Park, which is a UNESCO World Heritage Site; Fairmont Le Chateau Frontenac is located inside the Old Quebec, which is also designate a UNESCO World Heritage Site, together with the view of the St. Lawrence River. (Fairmont, Destinations)
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STRENGTHS
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WEEKNESSES
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- Fairmont is a long life brand (since 1907) (Fairmont, aboutus)
- Being merged with Accorhotels group (ie. Novotel, Sofitel, Ibis, etc.), that will share with each other a global management system and diversity, Fairmont will enhance its competitiveness in the luxury hotel segment. (CBCnews, 2015)
- Unique architecture and design, as well as great location attract clients. (Fairmont, aboutus, n.d.)
- Environmental policy, such as: waste management, recycling, energy saving, etc. promote Fairmont image.
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- Price is rather high (Fairmont, 2016)
- Fairmont has not been much successful in Europe. (Geerts, 2015)
- Fairmont does not have as many of Michelin Star classified restaurants as other competitors. only Haerlin Restaurant of Fairmont Hotel Vier Jahreszeiten (Germany) attains 2 Michelin Stars, while Ritz Carlton has 6 and Hilton has more than 2. (Fairmont, Fairmont Hotel Vier Jahreszeiten), (www.ritzcalton.com, 2015), (www3.hilton.com), (Eater.com, 2015)
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OPPORTUNITIES
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THREATS
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- Immigration has been increased, and international migration accounts for 69.4% of Canada’s population growth in 2015’s 3rd quarter. (Statistics Canada, 2015). This trend strengthen Canada’s diversification, which attracts more visitors to international tourists.
- Canada’s festivals and events, which represent the specific cultures of different cities/provinces/territories across Canada, attracts a large number of visitors and tourists when they occur. (Parliament of Canada, 2014)
- Lower gas price reduces fuel cost, accordingly leads to lower airfare. (Arnold, 2016) This may increase travel demand.
- Travel apps on smartphones become a trend in young travellers (http://webreports.mergent.com, 2015, p. 16). Youngsters, who tend to spend more, can use this technology for booking hotels.
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- While other markets ( ie. US, Australia), are investing more in marketing campaigns to attract Chinese travellers (ie. who are a significantly lucrative segment for the travel industry), Canada, in turn, has reduced its budget for marketing. (http://webreports.mergent.com, 2015, p. 21)
- Asian emerging markets are considerable competitors. (Passport, 2015, pp. 44-47)
- Many hotels with similar services have better prices (www.trivago.ca, 2016)
- Climate change causes negative impact on hospitality industry (www.nrcan.gc.ca, 2016)
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- Emphasize the long-life brand by creating activities/events reminding those celebrities who used to stay at Fairmont in the history (eg: John Lennon of the Beatles). Plus, there should be special luxury rooms named those stars with the exclusive decoration that relevant to them.
- Take advantage of being a member of the Europe’s largest hotel operator, French Chain Accor, to increase the company’s competitiveness.
- Improving brand awareness in Europe by specifying marketing mix strategies for this market. A co-branding event series with some haute couture fashion brands could be an example of this branding activity (ie. Louis Vuitton/Hermes/Chanel… Fashion shows)
- Investing more on restaurants by improving and diversify the menu and dining activities, such as an equivalent Master Chef contest, fine dining award festival, events with Canada Winery Association,…
More marketing activities on Asian market (especially for China, Japan and Korean consumers) with tailored marketing strategies built on Asian tradition features (for example : brand image with Dragon symbolizing for highest level of luxury in China).
Strengthening the strategic partnership with Airlines to get the most benefit from low fuel price trend, by constructing more appealing co-promotion program, typically for customer coming Asian and European market.
Enhancing the digital power for Fairmont Magazine by optimizing it to fit well with travel applications, that serve to attract the youth segmentation.
REFERENCES
Arnold, C. (2016, 1 22). As Oil Plummets, Cheap Jet Fuel Means Better Travel Deals. Retrieved from npr: http://www.npr.org/2016/01/20/463724352/as-oil-plummets-cheap-jet-fuel-means-better-travel-deals
Bloomberg. (2016, 3 13). Hotels, Restaurants and Leisure. Retrieved from Bloomberg Business: http://www.bloomberg.com/research/stocks/private/snapshot.asp?privcapid=976038
CBCnews. (2015, 12 9). Business. Retrieved from CBC : (http://www.cbc.ca/news/business/accor-fairmont-raffles-swissotel-sale-1.3357634 )
Eater.com. (2015, 12 7). Eater. Retrieved from Eater: http://www.eater.com/2015/12/7/9864632/michelin-the-netherlands-2016-guide
Euromonitor. (2014). Brand shares (Global-Historical Owner). Retrieved from Euromonitor International - Statistics: http://www.portal.euromonitor.com.library.sheridanc.on.ca/portal/statistics/changemeasure
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Fairmont. (2015, December 09). Articles. Retrieved from Fairmont: http://www.fairmont.com/press-room/articles/frhi-accor-hotels-merger/
Fairmont. (2016). Select a room-Room type. Retrieved from Fairmont Hotels and Resorts: http://www.fairmont.com/reservations/select-room/
Fairmont. (n.d.). aboutus. Retrieved from Fairmont Hotels and Resorts: http://www.fairmont.com/about-us/
Fairmont. (n.d.). Destinations. Retrieved from Fairmont Hotels and Resorts: http://www.fairmont.com/destinations/
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Fairmont. (n.d.). Fairmont.com Home. Retrieved from Luxury Hotels & Resorts - Fairmont Hotels: www.fairmont.com
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Fairmont. (n.d.). Programs and Partners. Retrieved from Fairmont Hotels and Resorts: http://www.fairmont.com/about-us/programs-partners/global-partners
Fairmont Royal York. (n.d.). Accommodations. Retrieved from Fairmont Royal York - Toronto: http://www.fairmont.com/royal-york-toronto/accommodations/guest-rooms/
Fairmont Royal York. (n.d.). Business services. Retrieved from Fairmont.com: http://www.fairmont.com/royal-york-toronto/activities-services/business-services/
FRHI. (2012, 7). Travel Agents and Famous Agents Rates. Retrieved from FRHI Famous Agents: http://www.frhi.com/famousfiles/Famous_Agents_Member_Rate_Sheet_-_V2_-_English.pdf
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Parliament of Canada. (2014, 8 1). Retrieved from Parliament of Canada: http://www.parl.gc.ca/Content/HOC/Committee/412/FINA/WebDoc/WD6615327/412_FINA_PBC2014_Briefs/FestivalsAndMajorEventsCanada-e.pdf
Passport, E. (2015, 11). Passport-Global Trend Report. Retrieved from Euromonitor International Analysis: http://www.portal.euromonitor.com.library.sheridanc.on.ca/portal/analysis/permalink?PermalinkId=47284#
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Spafax Canada. (2015). Luxury brands media kit. Retrieved from www.spafax.com: http://www.spafax.com/download/media-kits/luxury-brands-media-kit.pdf
Statistics Canada. (2015). Quarterly Demographic Estimates. Retrieved from Statistics Canada: http://www.statcan.gc.ca/pub/91-002-x/2015003/part-partie1-eng.htm
Wikipedia. (n.d.). Fairmont Hotels and Resorts. Retrieved from Wikipedia: https://en.wikipedia.org/wiki/Fairmont_Hotels_and_Resorts#Canadian_properties
www.nrcan.gc.ca. (2016, 02 15). Climate Sensitivities, Impacts and Vulnerability: Subregional Perspective. Retrieved from Natural Resource Canada: http://www.nrcan.gc.ca/environment/resources/publications/impacts-adaptation/reports/assessments/2008/ch6/10363
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www.trivago.ca. (2016). Fairmont Royal York Canada. Retrieved from Trivago: http://www.trivago.ca/?iPathId=44252&iGeoDistanceItem=44351&aDateRange%5Barr%5D=2016-04-04&aDateRange%5Bdep%5D=2016-04-05&iRoomType=7&cpt=4435102&iViewType=0&bIsSeoPage=false&bIsSitemap=false&
www3.hilton.com. (n.d.). Dining. Retrieved from Hilton Hotels and Resorts: http://www3.hilton.com/en/hotels/united-kingdom/london-hilton-on-park-lane-LONHITW/dining/index.html
