c



    
Rezidor hotel group business development director for Africa Andrew McLachlan said South Africa held
vast opportunities to grow the Radisson brand and Port Elizabeth, being a major location, was well
suited to the company͚s expansion plans.͞We͚ve got Cape Town on the one end of the Garden Route
and we felt the market was right and ripe for a first class Radisson hotel at the other end, in Port
Elizabeth͟. (2007, Eastern Province Herald)

Port Elizabeth is the mainstay of the Eastern Cape͛s economy. It is not only a center for production but
also a point of national and international trade, farming and industry produce from the Eastern Cape
being exported via land, air and specifically sea. The port is an integral part of South Africa͛s sea trade.
This is one of the main reasons of the city͛s developed hospitality segment. Another reason is the
Eastern Cape͛s coast is marketed internationally as the Sunshine coast thus being a popular tourist
destination.

The Port Elizabeth market is very competitive, with establishments from the small and large and from
the uncertified to the five star. Trying to find the specific competition for the Radisson is then a difficult
task. One way is to narrow down the basic elements of the target market, demographics. Thus it is clear
that the Radisson Blu aims at both the mid to higher price range business and leisure segments. The
Radisson aims at speed and efficiency in service and thus is able to keep up its quality of service even
though its large size. This is done by ensuring the highest standards in regards of the employees and
services as can been seen in its aggressive head hunting for chefs such as Chang Seng Ye. (2010, The
Global Table) Thus one must look at hotels that aim at similar demographics to understand the external
environment of the hotel.

The predominant characteristic of the RadissonBlu is its size, there are not many similarly sized hotels in
the Eastern Cape that also target similar markets, vis a vis, the national and international business and
leisure customer. So the search parameters were widened to include hotels which were large (relative
to Eastern Cape Standards) had similar facilities and target markets. The results of this research were
then used to help analyze the relative market position of the Radisson with the help of a positioning
map. (Principles of Marketing, Philip Kotler, 2007)
c c   
_
  
 

Radisson Blu

Fish River Sun

Paxton

Blue Lagoon

Halyards

 _
 


  Protea

  

Kelway

Holiday Inn

Manderson


  
 

In the Appendix, the table listing the hotels and facilities makes it clear that the analysis group is to be
varied, thus it was decided that the parameters for the matrix should be ones that all the competitors
would be able relate to their specific target market. One axis of the map is the average price of the
rooms and the other the number of activities available to the target market. This was decided because
of the direct relation between room prices in hotels of this type and the amount of facilities available.
These value additions increase the amount earned per square foot by a hotel by adding to and
improving the overall customer experience. Customer experience has emerged as the single most
important aspect in achieving success for companies. (Peppers and Rodgers, 2004)

All the hotels target the same market with the same basic core product, rooms, and with similar
complementing services like conference and health facilities. The map positions the Radisson and its
competition according to the number of facilities provided in addition and in complement to the core
service, rooms, in relation to the relative price of the core product. The hotels all having a large number
of rooms and extra facilities, can thus be well analysed;since it has been found that an increase in the
Customer Experience level allows a company to raise prices and thus profits. (Peppers and Rodgers,
2004)

ð
 


The first thing the map shows is that the majority of competition for the Radisson Blu is from the Paxton
and the Blue Lagoon Hotel and Conference Centre. As can be seen from the positioning map, both hotel
are aimed at the higher income customer. Both hotels also provide a high level of complementary
services like conferencing facilities, child care and health spas. On the other hand lies the Manderson,
which is aimed at similar clientele (business and leisure), but at a much lower price range.

In the middle of the map can be seen the hotels Kelway and Protea. These hotels again, provide
predominantly the same facilities as the others, but one can see that they are of a mid-range price
segment. One also sees the Halyards hotel and the Southern Sun Holiday Inn which both provide a
similar number of facilities (mid-level) but at a relatively high price range. The map shows these two
hotels to be far off the diagonal, and thus not in the best position to face strong competition. (Principals
of Marketing, Philip Kotler, 2007) The Fish River Sun on the other hand has captured a niche market
because of its appeal on the basis of the sheer number of facilities available to both the leisure and the
business consumer.

Finally, it is safe to say that the Radisson Blu has positioned itself well to target its desired market
segment. The map also shows that the hotel faces stiff competition from the Paxton and the Blue
Lagoon Hotel and Conference Centre because of them being aimed towards similar price ranges. This
clearly indicates that while the Radisson might be in a strong and competitive position, its competition is
not far behind. In the aftermath of the FIFA World Cup 2010 the tourism market is booming and it would
not be feasible for the Radisson to be complacent based on past figures and statistics, rather it must
continue to innovate and add more service to continue improving the customer͛s experience.


c 

 
 

The national governing body for tourism has refurbished its marketing strategy for tourism growth post
the FIFA World Cup. This strategy is based on retaining old customers while aggressively trying to attract
new tourists. This means that the government body is on the first step of providing support in the way
of research and contacts to hotels around the country to maximise international and national tourist
expenditure. (The Marketing Tourism Growth Strategy for South Africa, SAT, 2011)

c
 
 

The Nelson Mandela Bay Tourism board has recently entered a joint venture with the British company
TripAdvisor to better propagate the Eastern Cape. This international website provides a forum for the
consumer to speak about his or her experience at any hotel, to any prospective consumer. In addition, it
allows companies to know what their clientele have to say about them. It also provides a platform for
companies to advertise their respective hotels to a large international market. This is relevant because
of the fact that total foreign direct spend generated from tourist arrivals increased by 22.6% between
2009 and 2010. (Trip Advisor Partners with Nelson Mandela Bay Tourism, NMBT, 2011)




 


Regarding international tourists, the Eastern Cape was one of the four provinces to show an increase of
9.4%. Trends are also showing a decrease in the number of provinces visited by foreign tourist, thus
encouraging tourists to visit the Eastern Cape is the only sure way of ensuring a continued booming
economy.(Highlight of Tourism͛s Performance in 2010, SAT, 2011)

The domestic market has seen an increase in holiday makers, from 12% to 13%, while the business
market remains at 5%. Over all though, the trip length of the domestic traveller has increases to four
and a half days on average. The Eastern Cape͛s market share has fallen from the last year by 3%.
(Highlight of Tourism͛s Performance in 2010, SAT, 2011)

ð
 


It is clear that the South African tourism industry is booming in the afterglow of FIFA 2010. It is also clear
that this boom is supported whole heartedly not only by South African Tourism but also the regional
body of the Eastern Cape, Nelson Mandela Bay Tourism. Both departments have come up with detailed
and comprehensive plans to improve the industry. Their intention to facilitate the established hotels in
the country and specifically the Eastern Cape show that it is a great chance for growth.

National and international tourist statistics show that it is a period of growth for the international
market, business and leisure. Nationally, the country has seen an increase of 22.6% in international
tourist expenditure. The Eastern Cape has a smaller market share of this than last year though.
†ue to the decrease in the Eastern Cape͛s over all tourism market share and the fact that most foreign
tourists visit only one province during their stay it is clear that the hotels active in the market must more
aggressively attract the foreign market or lose out to other provinces. International online market places
like TripAdvisor make this possible. The Radisson Blu can also make use of its international network to
better sell itself to foreign markets.


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Company name: |Number of Target Market Activities service/product

rooms.

Protea hotel 114 Leisure, Business :

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Kelway Hotel 62 Leisure, Business


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All references accessed last on 30th May, 2011.

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Ê The Marketing Tourism Growth Strategy for South Africa,
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Ê Trip Advisor Partners with Nelson Mandela Bay Tourism
Nelson Mandel Bay Tourism
2011.
Ê (Highlight of Tourism͛s Performance in 2010,
South Arica Tourism
2011)
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