Business
Whitbread had a proportion of 4.60 in 2006 in Hotel Industry in the UK, which was about 2% less than Hilton Hotels Corp which had highest percentage. Moreover, Premier Travel Inn, which is the brand of Whitbread, had 38% share, 32,600 rooms, in budget hotels. The second largest, Travelodge, has increased its capacity by over 4,500 rooms since 2005 and has almost double the amount of third in line, Holiday Inn Express, which has a 12% market share. The remaining 28% of market share contribute to amongst a number of small operators.
Top two operators, Premier Travel Inn and Travelodge, control 60% of the budget hotel market. The UK budget hotel market currently has 1,171 hotels in 96,000 rooms.
(Mintel)
Total UK market has 708,000 rooms and 414,000 of them are unbranded hotels, 294,000 are branded, 96,000 are UK Branded Budget hotels. Branded hotels share of the UK market between 2002-2007 changed significantly for budget hotels which increased 6.9% and it was only 1.1% and 1.0% increase for upper scale and deluxe hotels respectively. There was 3.2% decrease for midscale accommodation between these years. (TRI & BDRC)
The growth in budget hotels share was again with Premier Inn which rose by 14% in seven years from 2000, followed by Ibis 13%, Travelodge 10% and Holiday Inn 9%. Increase in the number of budget hotels has been substantial since 2001, but the growth rate has slowed slightly in recent years. (BDRC)
Porter’s 5 Forces
• Power of Suppliers
1. The suppliers of the hotels could be cleaning, food, beverage, furniture, energy & utility and staff suppliers.
2. Most suppliers are from highly fragmented industries and they do not have significant differentiations.
3. It is not difficult for the hotels, choosing the lowest cost supplier
4. The bargaining power of suppliers is lower than customers, because they are mass suppliers,...
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