1.1 Background of Hotel 81The two main aspects of Hotel 81 include accessibility and affordability. Hotel 81 are a chain of value catering to different market segments, such as the leisure and business travellers. Hotel 81 has a total of 24 hotels located around the eastern, north-eastern and central part of Singapore. The different categories of Hotel 81 include City Centre, Geylang (Best Value), Joo Chiat (idyllic surrounding), Changi and Kovan(suburb) and Lavender/Rochor/ Balestier (Central Area). It allows the travellers to travel around the city within 15 minutes through the use of affordable public transportation. There are many shopping malls and tourist attractions located near to some of Hotel 81’s branches, such as Gardens by the Bay and Suntec City Mall. All 24 hotels under the name of Hotel 81 are accessible to a wide variety of eateries and public transportation such as the Mass Rapid Transit (MRT). Hotel 81 ensures that both comfort and value is provided for cost-conscious travellers to ensure repeated patronage. All the guestrooms are provided with the basic amenities such as air-conditioner with attached bathroom, cabled TV and hot-beverage making machine with complimentary drinks. Hotel guest are entitled free high-speed Wi-Fi.Every staff are adequately trained to ensure that the individual needs of each hotel guest are well catered to. The receptionists at the front desk will always be available to provide any form of assistance to the guest at all times. 1.2 Hotel servicesThey provide front desk services such as baggage storage, ticket service, tour desk, currency exchange, express check-in/check-out and 24-hour front desk. They also provide cleaning services such as daily housekeeping, dry cleaning and laundry services at an additional charge. Business services such as fax or photocopying are also provided at an additional cost. Convenience store and gift shop are also available on-site for the guests to purchase goods.1.3 Room categories / typesThe room categories of Hotel 81 include standard room, superior room, superior plus, superior twin, superior double, twin room, twin plus and family room. Standard room is a room with a queen mattress but no windows. Superior room consists of a queen mattress. Superior plus room is a room with large window and is comfortable for 3 adults. It has a queen mattress and single sofa bed. Superior twin room has 2 single mattresses with a large window. Superior double room has a queen mattress with a large window. Twin room and twin plus consists of 2 single mattresses. Family room consists of a queen and super single mattress.1.4 Market segment1.4.1 Cost-conscious travellersFirstly, the hotel is targeting cost-conscious travellers. Since they are searching for cut-price hotels, they are being targeted by budget hotels. Hotel 81 is a big budget hotel chain which assures the cleanliness of rooms, quality of housekeeping and provides free Wi-Fi. They have more than 50 hotels located islandwide and costs less than S$100 per room per night. It is considered a valued for money hotel for cost-conscious travellers since they are trying to save any amount possible. Hence, they are being targeted as they are looking for lower costs.1.4.2 Leisure travellersSecondly, the hotel is targeting leisure travellers. Leisure travellers consider factors such as price, location, hotel facilities and service and friendliness when choosing a hotel. Since Hotel 81 can offer a cheap place to stay over and it is located near MRT stations, eateries and convenience stores, they can attract leisure travellers. Moreover, it has facilities such as rooftop swimming pool, free Wi-FI and gift shop which are quite rare for budget hotels. It also provides 24-hour front desk service. Hence, they are being targeted as Hotel 81 can fulfill most criterias required by leisure travellers despite being a budget hotel. 1.4.3 Business travellersLastly, the hotel is targeting business travellers. Business travellers consider factors such as price, location, reliable, comfortable and clean product and quick and efficient check-in/check-out when choosing a hotel. Hotel 81 offers cheap room rates and it is located near Changi Airport as well which is convenient for them. Since they have quality cleaning services, the business travellers can trust that the hotel’s products are clean and comfortable. The hotel also provides express check-in/check-out services. Since Hotel 81 can also fulfill most of the requirements by business travellers, they are being targeted.1.5 Ways in which hotel reach out to the different segments1.5.1 The business travelerThey are always on the move, business travelers are constantly jet setting to meet with clients and closing deals on the go. Hotels must be able to ensure that business traveler can do what he needs to do, a great business.A personalized stay for the business traveler might start with the pre-arrival email, alerting the guest to the hotel’s own mobile app, which offers all hotel services at the guest’s fingertips such as the hotel’s business center locations and offering upgraded Wi-Fi options. Hence, before the business traveler even arrives, he’s put at ease knowing that if he needs a printer or any equipment for work even at the last minute or a reliable Internet connection to upload an important presentation, the hotel’s got him covered.During his stay, the business traveler gets another email from the hotel asking, “Do you need dry cleaning services for any of your suits?” and offers the hotel’s own pickup dry-cleaning service. It is followed up by another email about a list of the highest-rated restaurants in the area where the business traveler can take his clients to.1.6 Channels of distributionA term that refers to Distribution Channels and that describes the different platforms in which bookings for a hotel are made. A Channel can be a hotel’s booking engine, a direct phone reservation or a specific stream of revenue such as a 3rd party website, an OTA, etc.A direct channel of distribution allows the hotel to sell its hotel rooms and facilities directly to the customers without the need of middlemen. It is the shortest and simplest form of distribution channel and has been increasingly prevalent due to the advancement of modern communication network, such as the Internet. This includes face-to-face sales, direct phone reservations and hotel’s booking engine, where only the hotel is involved.An indirect channel where hotels receive their bookings would be online travel agencies(OTA). Hotels seek such channels to expand their branding locally and globally for interface with international tourists.1.6.1 AdvantagesDirect channels:It allows the hotel to directly interface with the systems iDirect channels can provide 4 advantages for Hotel 81. They are targeting of ideal customers, marketing on a budget, increase sales to current and lapsed customers and improve customer loyalty. For the targeting of ideal customers, Using direct marketing allows them to target specific groups of customers with tailored messages. By taking the time to research and identify the customers who are most likely to need or want their products and services, they can focus their marketing efforts where they have the highest chance of achieving results. A well-targeted direct marketing campaign will be able to provide them with an accurate understanding of how their customers are responding to their product and service offers. For the marketing on a budget, direct marketing that is targeted to a specific audience can help you set realistic sales goals and improve sales results on a tight marketing budget. Businesses can run effective and purposeful direct marketing campaigns at a fraction of the cost of broadcast advertising. For the increase sales to current and lapsed customers, most customers welcome contact from familiar business people who make an effort to understand their needs and build a personal relationship. Hotel 81 can increase sales to their existing customers by maintaining reliable customer records and choosing simple, well-planned promotional tactics. They can also use direct marketing tactics to re-establish relationships with customers who haven’t returned to their business in a while. Approaching lapsed customers is an opportunity to rekindle sales, keep customer records accurate, and find out why their customers had move on. For the improving of customer loyalty, direct marketing helps Hotel 81 build direct relationships with its customers. They can personalise promotions, letters and offers to create an immediate link with their customer and increase their personal connection to their business. Many businesses combine both direct marketing and customer loyalty strategies in order to keep and build stronger customer relationships (e.g. giving discount offers, invites to upcoming sales).Indirect channels:With indirect distribution, Hotel 81 will gain a significant competitive advantage. They will gain access to an increased consumer base without the challenge of getting the customer through the door. This grants them more time to focus mainly on their product, their customer base and increasing the range of their targeted consumer base. The startup cost will be lower, and the relationship generally makes the process much simpler for the distributer. Furthermore, as sales tax is only required to be paid once, selling to a third-party distributor will lead to an exemption of sales tax under the resale exemption.1.6.2 Disadvantages Direct channels:Indirect channels:There may be restrictive terms and conditions imposed by OTAs such as guest cancellation and automatic room reselling policies. Hotel 81 may need to find a way of managing room availability across a range of OTAs, their own website, front desk and telephone sales. This can be time consuming and labour intensive. Using OTAs does not reduce the need to have the hotel’s own website with booking engine. May still need to invest in a balanced multi-channel marketing strategy. Signing up with an OTA brings with it a lengthy list of terms and conditions, including heavily criticised rate parity / best price guarantees, which restrict your ability to make direct offers more attractive. Reduced profit margins: Most OTAs work on a commission basis, which can be up to 30%. If not carefully monitored and controlled, these costs can spiral out of control and erode profitability. Given the terms and conditions applied by the OTAs, particularly around rate parity, accommodation providers need to consider how they can maximise the benefits of reaching new customers through the OTAs and then convert them into more profitable visitors in the future. Hotels may succumb to alternatives such as raising the rooms rates.Technology: For many the thought of integrating systems and managing room sales across multiple channels is a real barrier to engaging with the OTAs. In reality, they have done a lot to make their systems as simple as possible to integrate seamlessly with your existing booking management system. Managing bookings across a range of OTAs, alongside direct web & phone bookings can be complex and time consuming, so hotels may need to review their technological capabilities in order to future proof the business and avoid costly mistakes. In cases where the interface between the hotel’s management systems and the OTA’s reservations, the hotel’s bookings may be incorrect or inaccurate 1.7 Ways to stand out from its competitors1.7.1 Exceptional customer serviceFirstly, the hotel can offer guests an exceptional customer service that can only be experienced in their hotel. This can be done so by listening to guests’ needs and catering to the different types of guests such as business travellers and family with kids. Listening to guests’ needs help us to understand their wants which allows us to provide them a wonderful stay at our hotel. Different types of guests have different needs and we have to cater to each of them. For example, business travellers consider the hotel’s facilities, technology and location before choosing a hotel. However, family with kids will require kid-friendly amenities and facilities. If we can cater to their needs, their overall experience staying with us will be pleasant. Hence, this will enable our hotel to have a competitive advantage.1.7.2 Gaining the guests’ trust and confidenceSecondly, the hotel can gain the guests’ trust and confidence in their hotel. We should not make the guest lose their faith in us by deceiving about our services and products. Trust represents our brand’s reputation and it is earned through efforts made and destroyed through lies made. For example, we have to share with them any negative news and not keep it from them. Trust is the foundation of a relationship between the customer and business. Without trust, the guest will not have the confidence to stay in our hotel. However, they will continue to patronise our hotel if they trust our hotel’s quality and have confidence in our services. Thus, this will allow our hotel to stand out among others.1.7.3 Create new innovationsLastly, the hotel can create new innovations which makes them a step ahead of others. Improvements can be made to our current hotel’s situation by adopting the current best technology and introducing new unique products. This products are effective in attracting attention, given the uniqueness of it in the market. Since the hotel is at an advantage with new innovative products, people are drawn to these hotels to experience these new products. Hence, this will help the hotel to stand out from the crowd as no other hotels are ahead of them with their newest technology and invention.What is Economy hotels?Economy hotels are often priced at a more reasonable rates, that is suitable for price-sensitive guest. These hotels meet the basic needs and limited amenities is provided in the room. Economy hotels provide basic accommodations and limited services is provided to the guest. Factors of consideration when staying in budget hotelThere are many factors of consideration when the travellers are choosing a budget hotel to live in for their stay. Firstly, it is essential for the hotel to be located in a safe area. People would not want to consider a budget hotel that does not provide sufficient safety aspects to them when they are staying there. The hotel should have certain safety measures in place, e.g. having emergency exit that is available to the visitors at all times and have proper security measures to ensure that the personal belongings of the visitors are kept securely. The common areas, such as the lobby, should also be provided with surveillance cameras and there is 24-hour security in the hotel.Secondly, it is essential for the hotel to provide clean and comfortable rooms. Even though the budget hotel may only provide basic facilities, cleanliness of the room is still important. The price of the room does not determine how clean the room is. A clean room is of high priority to most guests despite the rating of the hotel that they are staying in, as cleanliness is the most basic things that is expected by the guest who is staying in the hotel.Thirdly, the budget hotel is able to provide the ease of access to other places, such as tourist attraction and shopping malls. This is through the use of affordable transportation, as people who stay in budget hotel tend to be more price-sensitive. These group of people may not want to spend much money on travelling around to get to their destination. Thus, the hotel that they are staying in should be of a convenient location that allows them to be accessible to the transportation easily.Lastly, it is essential for the budget hotel to be able to provide breakfast and free internet access for the guest to use. It is difficult for the guest to be able to estimate their spending on dining exactly, thus including the cost of breakfast into the daily room rate can help to resolve the problem. Breakfast and free internet access are one of the primary consideration in the decision of booking a budget hotel.What is market segmentation?Market segmentation are used by many hoteliers in order to identify their market segment. It allows the hotels to be able to classify the large target audience into more clearly defined categories, such as demographics, country of origin and source of business. Market segmentation enhances the advertising efforts by the hotel. Benefits of market segmentation Firstly, market segmentation allows the hotel to break down the large audience. Miscommunication may easily occur when the message is delivered across a large audience and some of the people in the large audience may choose to avoid the message. Thus, the message that the hotel is trying to bring across may not serve its purpose of informing the audience. Through market segmentation, it allows people of similar characteristics and traits to be categorised together. Thus, the message can increase its efficiency by catering to the needs of each specific category, which is usually smaller in scale. Secondly, market segmentation allows the hotels to create target market. The hotels can differentiate their advertising efforts, through different channels of distribution, to reach out the different market segments that they are targeting. Through market segmentation, it allows the hotels to be able to know the suitable channels of distribution for each market segment and thus achieved the desired outcomes that they expect, such as an increase in the revenue generated by the hotel. Lastly, market segmentation can help to save unnecessary advertising efforts that are not effective and beneficial to the hotel. The advertising efforts are deemed not to be effective when the hotels are not reaching out the correct market segment that they are intending to. For example, if the market segment that the hotel is targeting is female audience, it is unnecessary for the hotel to promote itself to the male audience as they would not be interested in it. Thus, by saving unnecessary advertising efforts, it can allow more funds to be spent on advertising to the intended market segment and hence increasing its effectiveness.