Four Seasons Resort Dubai Company Background

Four Seasons Resort Dubai Company Background

Four seasons resort Dubai at Jumeirah Beach is just one of the many hotels managed by the Four Seasons Hotels and Resorts. The institution began in 1961 in Toronto, Canada, as a designated resort and hotel meant to serve a new generation of international business travelers to the country. Isadore Sharp, the founder of the company, wanted to provide the industry and travelers with a unique experience of business travel, he created a luxury hotel with modest exterior coverings that attracted a lot of people to the resort. Internal services within the hotel were enhanced to be the best in the region; however, as much as the company was successful, Isadore was not satisfied and decided to open another branch in Britain (Four Seasons Hotel London at Park Lane). Large traditional establishments highly dominated the hospitality market at that time, and Isadore choose to use a more modern approach in the creation of the London resort. This initiated a lot of success within the company, and this was the first significant market breakthrough that the company had in a foreign market (Four Seasons Hotel Inc., 2020, P. 1).

Four seasons had found its niche, modern mid-size hotels with an exceptional quality of services differentiating the resort from all other major players in the industry. According to Four Seasons Press Room (2018, p. 1), the company introduced new hospitality services such as bath amenities, robes and hair dryers, twice-daily housekeeping, round the clock laundry, and many more. The innovations increased the number of customers willing to use the hotel at whichever price the services are offered in. The companies name and image grew globally, giving it a chance to expand their services to more countries like the US, where it has several resorts in different cities. Over the years, the company has continued increasing and improving the quality of its services and finding innovative ways of serving their customers.  A good example is when they introduced a new sleeping experience for their customers, where customers would have fully customizable mattresses that allows them to choose the firmness of their bed. In this same year the company opened up the four seasons resort in Dubai at Jumeirah beach, the city of Dubai is known for its exclusive hospitality industry and the ability of the city to provide exquisite experiences to tourists (Algethami, 2014, P. 1).

Four seasons have been in Dubai city for less than ten years and have had a lot of success. However, the level of competition is high here; the number of tourists visiting the country is enough to balance the supply-demand of critical players in the hospitality industry. Each four season branch has its own local management who help deal with issues facing the company; however, the general management of the whole company is run at the company’s headquarters in Toronto, Canada. The missions, visions, and values of the company remain the same for all branches as they all provide the same types of services; currently, the company has over 100 hotels globally. Since 2006, bill gates through cascade investments and Prince Al-Waleed bin Talal have been the majority shareholders of the company hence taking the role of chief managers of the company.

Leonardo Baiocchi is the current manager of Four seasons resort Dubai at Jumeirah beach; he was appointed in 2016 as a company’s way of creating more effective leadership in this company branch. Although the company has faced some setbacks in the previous years, the current success of Four seasons resort  Dubai creates a desirable future for the company in the region. This paper seeks to analyze different business situations and strategies the company has experienced and used to maintain and increase its relevance in the market. The paper also provides various alternatives that the company could use in Dubai to increase its market share and gain a competitive advantage in a highly competitive industry in the UAE.

Four Seasons Resort Dubai Company Mission

The concept guides the directorial mission of Four Seasons that the company chooses to specialize within the hospitality industry by offering the only experience of exceptional quality in the industry. The company also believes in recognizing a familiar face, welcoming a new one, and treating everyone equally.

Four Seasons Resort Dubai Company Vision

The companies vision is to create an impression that will stay with its customers for a lifetime and also be recognized as the company that manages the finest hotel resorts, and the resident club’s in the country.

Four Seasons Resort Dubai Company Value

Four Seasons Resort Dubai core values include honor, respect, and create a motivated workforce by rewarding them with the required amount of compensation. The company was once voted in fortune magazine as one of the top 100 companies to work for globally; each branch management is supposed to ensure that all employees are treated fairly and equally.

Company Analysis

The hospitality and hotel industry in Dubai has grown extensively, increasing the level of competition in the industry; however, the demand for first-class services has increased in the city, increasing the need for quality suppliers. The company has had a great influence on many consumers from western countries who often want to visit Dubai and have already experienced the services or heard about the four seasons hotels and resort.  Most of them would often choose to stay in a hotel they are familiar with. The level of competition in Dubai within the hospitality industry prompts existing hotels and resorts in the region to upgrade the quality of their services, increasing the effectiveness of the industry in the UAE. The four seasons Dubai has had major success in the region and has been able to attract a large number of tourists and foreign nationals visiting the country, each company manages its own departments such as the Finance, Marketing, and Human Resources. The four seasons resort Dubai’s management has created various strategies to ensure that they provide the best services to their customers and develop their operation techniques. The company has made various strides in innovation which has led them to come up with new ideas and techniques of satisfying their customer’s needs. However, the innovations are mainly suggested by the parent company other branches such as the Dubai greatly benefit from these innovations.

External Analysis

Pestel Analysis

Four Seasons Resort Industry Structure

Four seasons company is an international company, and its industrial structure is wide and involves many substructures from other branches across the globe since it is the combination of all Four Seasons branches that create the industrial structure of the company. The company’s industry structure can be analyzed both internally and externally using various business gauging methods that are meant to showcase various factors that might affect the growth and development of the company. Their competitive advantage can also determine a company’s industrial structure in the market which can be determined by the porters five force analysis, the perspectives of the five force analysis originated from Michael E. Porter from Harvard University. He came with the five forces as they are able to determine a company’s structure in the market, which helps a company come up with various strategies’ and mechanisms of gaining a competitive advantage in the market. The porter’s five force analysis looks at the threat of new entrants, the threat of substitutes, customers’ bargaining power, suppliers’ bargaining power, and competitive rivalry, which in this case will be analyzed using the industry structure of Four Seasons Resort Dubai.

Porters Five Force Analysis

The Threat of New Entrants

In an industry that is easy to operate and the demand of service continues increasing, the threat of new entrants for Four Seasons is a huge one, in Dubai, the hospitality industry is one of the most developed and diverse industries in the country. The city continues to grow, and the government of Dubai continues increasing job opportunities and tourist attraction sites; this attracts a lot of luxury hotels and companies in the region posing a huge competition issue. Just like Four Seasons joined the market in 2014, threatening the existence of other companies that same way other hospitality companies will come up and disrupt that market share of the region. The threat of new entrants might create a huge competition issue within companies that already exist in the region. The real estate industry in the country has continued losing its value due to the increasing number of hotels and rentals in the city, the increase  surpassing the demand for hoteels and restaurants.

The 2008 economic crisis in Dubai was due to the extensive creation of facilities by investors reducing the demand of the product, this left a lot of investors bankrupt and owning a lot of empty buildings that continued to lose value. The government needs to coordinate the inception of new hotels and resorts in the country, especially Dubai, as an increased supply of products or services could lead to a market crash, which could lead to the development of great losses among existing companies. However, certain factors might hinder the entry of a huge number of players in the industry such as the capital requirements of starting a new business in Dubai, the city has grown extensively, and this has increased the cost of land and construction in the region. Also, there is a fixed cost, the independent  size or cost advantage, as well as the economies of scale.

More so, product diversity and equity of brand play a part as the other factors that have effects on the threat the new entrants might have. The switching market behaviors might create an unsuitable environment for new entrants to enter the market, which in this case will be a great advantage to existing companies as the level of competition in Dubai is increasing. Four Seasons vision is to give its customers an unforgettable experience that they will want to come back, again and again, creating customer loyalty a threat to new entrants and a technique for the company to maintain its source of income.

 Threat of Substitute

The threat of substitute services in the hospitality industry is common since the type of services set to be provided by hotels and resorts is almost similar. However, most companies, such as Four Seasons has come up with its own innovative techniques of providing services and satisfying their customers. According to Cheng (2013, P. 53), substitute products and services can reduce costs and provide better quality performance and value in the industry, which often leads to technological innovation. The hotel industry is, however, not greatly threatened by the substitute for new products except when there is a recession of domestic travel, which might replace international and overseas travels.

As we have seen in many countries and the global hospitality industry, it is easier for a highly dominant market in the field to collapse due to increased competition and increased substitute for services (Gustavo, 2013, P. 13). An example, the Four Seasons resort came up with the idea of providing their guests with adjustable mattresses where they can adjust the firmness of their bed. In creating a substitute service, the Al Bandar Arjaan hotel or the Renaissance Downtown Hotel in Dubai provide their guests with multiple bedding options. As the guest book for the hotel, they are given the option of describing the type of bed they want, which gives the same type of service offered by the Four Seasons Resort. Although the threat of substitutes is a good thing for the market as it ensures the satisfaction of customers, it creates a straining survival mode for key players in the industry as they are forced to constantly adjust and improve their services for them to maintain their consumers.

Customers Bargaining Power

The bargaining power of customers is used to show the level of market output in an industry, the level of pressure enforced by the customers towards hotel services and goods to be the best creates the bargaining power of customers. In the case of Dubai, the city is known to host some of the world’s richest people and tourists around the globe; this creates demand for the best of the best quality service hotels in the country. Although there is no seven-star rating for hotels, certain hotels in the UAE, such as Burj Al Arab in Dubai, claim to be 7-star hotels due to the quality of services provided in the hotel. Most hotels in the region might not enjoy much the extensive luxury some of the hotels provide, but they can bargain with their consumers by providing high quality and satisfying services to their consumers.

Additionally, some hotels in the region target common people who are rich but not necessarily billionaires as they are high in number, and the hotel will be able to return its capital by providing them with good quality services. Four Seasons has created a certain level of loyalty with their customers as they provide them with the best services, although not the most expensive, it creates a good bargaining power among consumers. The ability to accompany to provide essential services to their customers without inflating the cost of services creates a good relationship between the hotel and the consumers creating a good platform for negotiations between the customers and the hotel.

Suppliers Bargaining Power

Hotels and resorts mostly depend on various suppliers who provide them with the necessary tools and equipment to increase their efficiency in the market; this creates a need for good communication and negotiating power on both sides. The bargaining power of suppliers deals with the market inputs when suppliers provide essential services and good to hotels; they gain a certain type of power where they can control the pricing of the products and services in a company. The presence of various substitutes of products in the market decreases the level of bargaining power among suppliers; however, the quality of the products and services provided by the suppliers increases their ability to bargain with hotels and resorts. Four Seasons Dubai has made an effort to create a good relationship with its suppliers to ensure that there is a good flow of goods and services within the establishment.

Additionally, the strength of supply and distribution channels among suppliers directly affects their bargaining power; however, the effects might spark positive outcomes for both the company and the Four Seasons Dubai resort. The suppliers have to ensure that there are fewer intermediaries as they reduce the chances of developing a direct relationship with their consumers, which in this case is the resort and hotel hence negatively affecting the supplier’s bargaining power. Government policies and regulations might affect the bargaining power of suppliers as there are policies that have been put in place to protect all businesses in the country, including employees that work in the companies. Four Seasons has maintained most of its suppliers for the longest time; this is due to a good bargaining power by the suppliers and good negotiations from the company. The suppliers differ based on the locations of their locations since Leonardo Baiocchi, the manager of Four Seasons Dubai, finds the easiest way of operating locally without seeking international supplies that might highly expensive.

Competitive Rivalry

The concept of competition in the hotel industry is rarely recognized since the demand for good services increases with each waking day. However, in the case, Dubai competition can be a great deal due to the increasing development of the region, prompting more investors to invest in world-class hotels and resorts in the region. The increase in key players in the industry increases the supply of hospitality services, which increases the level of competitive rivalry among key players in the region. Dubai has a lot of five-star hotels and resorts, and any company that wishes to invest in the region should have a lot of capital and ideas on how to provide unique, high-quality services to at least gain a certain kind of competitive advantage in the market.

Hotel operators compete based on low cost in a niche segment and also based on modern, comfortable and luxurious hotels like the Four Seasons company, the company has over time enhanced the quality of its products and innovated the creation of new types of services tilting market preference towards them. However, due to the easy practice of and services in the hospitality industry, other hotels adopt the same service comes up with a different idea that produces the same results but using a different technique. A hotel will be subject to powerful buyers if only its marketing strategies concentrate on attracting tour groups and foreign travelers, many people believe that hotels are not vulnerable to competition to the demand for their services.

Internal Analysis

SWOT Analysis

SWOT analysis is a type of an internal valuation system that helps a company determine its strengths, opportunities, threats, and weaknesses, which help the company create strategies and measures of approaching the market.

Strengths

The Four Seasons Resort is an internationally recognized company, and it is ranked among the top 50 most sought out hotel across the globe, at one time it ranked at number 4 globally in the most visited hotels across the globe. This creates the first strength of the company, Four Seasons Resort image comes with high recommendations and once the fact that its presence is well known in the market, it makes it easier for consumers to relate to the quality of the company’s services. The second strength comes from how the company relates with its employees; in 2013, the company was ranked second in companies that have the lowest turnover rates in the global hospitality industry. The companies HR department has created some of the best policies that have helped in retaining and keeping their employees motivated; this helps the company maintain the quality and type of service delivery to its customers.

The company also saves up a lot of money that would have otherwise been used in training and hiring new employees, most top management employees  have been in the company for almost 20 years a clear indication of the good employee management relationships. The company has been associated with a lot of innovations keeping the company ahead in the market and allowed it to attract a lot of consumers. Four Seasons Resort Dubai has greatly benefited from some of these strengths, such as the company’s image and brand. When the company chooses to move to Dubai; it was already recognized globally and did not have to engage in a lot of marketing advertisements (HH, 2017, P. 1).

Weaknesses

According to Zawya (2017, p. 1), the hospitality industry is highly vulnerable commerce since it is mainly optional and seen as a luxury. Hotels within the industry that operate internationally are required to maintain a high standard quality of services, which might cause the company a lot of capital in its investment. Four Seasons Resort regularly updates the types of services and tools within their institutions and keeps more than 44,000 employees around the globe who are constantly increasing due to the company’s investments in other areas. Unless the company can convince its customers to pay more for their services, the company could really have a hard time surviving, especially during economic hard times. During the current most hotels and resorts were closed to prevent any form of social gathering which initiated great losses for major companies in the hospitality industry, such vulnerability of the company presents one of the major weaknesses of Four Seasons Resort.

The level of competition in Dubai presents a major challenge in the existence of Four Seasons Resort Dubai since they are required to constantly adapt to new technology and techniques that come in with new entrants to the market to ensure that they are not left behind. The dependence of many branches of hotels governed by one headquarters might result in massive losses that might lead to the closure of most branches. An example, if Four Seasons Resort Dubai is doing great and has a lot of success in attracting customers while that of London or one in the US is flopping and unable to attract the required amount of customers.  The London company might need financial assistance to bounce back which will be provided by the parent company. The finances are probably from the profits of other branches, which might reduce the rate of development in other branches.

Opportunities

Some developing economies across the globe still remain potential market hubs for the Four Seasons Resort, in the middle the hotel is not well capitalized as there are many developing in the region. In the UAE alone, cities other than Dubai are coming up, and the rate of foreign travels and tourism to these regions has increased tremendously in the last few years, presenting great opportunities for the company to invest in the region. The company has also been involved in various hospitality innovation projects where they have come up with various unique customer service production attracting a lot of customers. Four Seasons Resort is filled with a lot of innovation opportunities, which will help the company maintain its competitive advantage in the future (HH, 2017, P. 1). Currently, a lot of hospitality companies are going through a hard time and are on the verge of collapse. When the markets fully reopen again some companies might have time starting up again and the Four Seasons Resort can use this opportunity to expand its presence in the market.

Threats

In the case of Four Seasons Resort Dubai, competition is one of the main threats that the company is facing today. Although the company has been able to gain various competitive advantages in the market, the force in which other hospitality companies in Dubai are coming is threatening. The economic crisis is another major threat to the company’s existence, evident from the current pandemic and its impact on the economic flow of Business; an economic crisis can greatly affect a company.  Tourism and international travel have been restricted in many countries, reducing the number of visitors going to hotels and restaurants, restaurants and hotels were also shut down by governments greatly affecting the overall revenues of hospitality companies globally.

TOWS Analysis

The Competitive Environment

Desai (2013) indicates that the level of competition in the hospitality industry in Dubai is massive and increasing each year, the city is developing and has become the new business hub in the middle east and a new tourist destination. In 2019, Dubai was the fourth most visited city in the world with over 15.3 million visitors, this type of tourism and foreign travels demand a sufficient supply of hotels and restaurants in the city that will cater for all these people. However, many investors have seen the many hospitality opportunities in the UAE, especially Dubai, and have chosen to invest in the region, creating a lot of competition for already existing companies. Four Seasons resort Dubai can, however, engage in certain business strategies that will help them increase their market share in the region. Four Seasons resort Dubai has to constantly come up with new ways of providing quality services to its customers, like ensuring that all their employees are properly trained.

The company has to ensure that they use all their strengths to their advantage. An example, the company’s image and brand is well known the company should participate in community projects and other international projects as they will continue creating a positive influence among potential customers. One of the reasons the company has been very successful is the internal relationship between the management and the employees, Four Seasons resort has one of the lowest turnover rates in the world, this creates a stronger workforce which helps the company produce quality service. The company needs to ensure that the interrelationship between employees and the management is strong, to do this the company has to ensure it addresses all the issues raised by employees and settle them in the most appropriate way (Social Tables, 2020, p. 1).

Four Seasons resort Dubai needs to make value-added strategies full of perks and extras, the implementation of this strategies create a competitive advantage for the company as they can study the market and come up with measures and strategies that will help it succeed in the market. Four Seasons resort Dubai already has direct online booking which makes it easier for customers to book for their stay in the hotel ahead of time, this is a game-changer in the competitive hospitality industry in the country. Four Seasons resort Dubai needs to ensure that they streamline the services too to customers on what they would want and at what time this makes it easier for the hotel to manage its production and for the customer to get all the required services in time.

References

Algethami, S. (2014). Four Seasons resort Dubai opens on Sunday. Gulf News: Latest UAE news, Dubai news, Business, travel news, Dubai Gold rate, prayer time, cinema. https://gulfnews.com/business/tourism/four-seasons-resort-dubai-opens-on-sunday-1.1412788

Cheng, D. S. (2013). Analyze the hotel industry in porter five competitive forces. Journal of         Global Business Management, 9(3), 52.         http://www.jgbm.org/page/7%20David%20S.%20Y.pdf

Desai, S. S. (2013). An Analysis of the Competitive Marketing Strategies of the Hospitality          Industry in the UAE. IUP Journal of Management Research, 12(1).             https://www.researchgate.net/publication/256055452_An_Analysis_of_the_Competitive_            Marketing_Strategies_of_the_Hospitality_Industry_in_UAE

Four Seasons Hotel Inc. (2020). Four Seasons Hotels Inc. – Company profile, information, business description, history, background information on Four Seasons Hotels Inc. Reference For Business – Encyclopedia of Small Business, Business Biographies, Business Plans, and Encyclopedia of American Industries. https://www.referenceforbusiness.com/history2/55/Four-Seasons-Hotels-Inc.html

Four Seasons Press Room. (2018, January 1). The history behind Four Seasons – Four Seasons hotels and resorts. https://press.fourseasons.com/news-releases/the-story-of-four-seasons/#:~:text=In%201961%2C%20Four%20Seasons%20Hotels,the%20stress%20of%20business%20travel

Gustavo, N. (2013). Marketing management trends in the tourism and hospitality industry: facing the 21st-century environment. International Journal of Marketing Studies, 5(3), 13.             https://files.transtutors.com/cdn/uploadassignments/771293_1_179928-international-         journal-of-marketing-studies-article.pdf

1. (2017, November 21). Four Seasons hotels and resorts business analysis. HubPages. https://hubpages.com/business/Four-Seasons-Hotels-and-Resorts-Business-Analysis

Morgan, J. (2014). Destination ambassadors: examining how hospitality companies value brand ambassadorship from front-line employees. A case study of four seasons hotels and           resorts destination ambassadors: examining how hospitality companies value brand ambassadorship. McMaster J. Commun, 11, 237-262.

Social Tables. (2020, February 20). Ten keys to a hotel competitive advantage strategy. https://www.socialtables.com/blog/hospitality/hotel-competitive-advantage-strategy/

Zawya. (2017, October 3). On a roll: UAE’s hospitality landscape gets competitive. ZAWYA – Middle East’s trusted source of Business & financial news. https://www.zawya.com/mena/en/business/story/On_a_roll_UAEs_hospitality_landscape_gets_competitive-SNG_100822900/