Holiday Inn UAE International Marketing Strategy Analysis

by Jason Shaw

Table of Contents

  • 1.0 Introduction
    • 1.1 About the Company
  • 2.0 Situation Analysis
    • 2.1 Internal Environment
    • 2.2 External Environment
    • 2.3 Market Analysis
    • 2.4 Portfolio Analysis (BCG Matrix)
    • 2.5 Product Life Cycle
    • 2.6 Current Positioning
    • 2.7 Ansoff Matrix for Current Strategies presently Adopted by the Company
    • 2.8 Market Trends
    • 2.9 Competitive Environment (Porter’s Five Forces)
  • 3.0 Vision, Mission & Values
    • 3.1 Vision
    • 3.2 Mission Statement
    • 3.3 Brand Values
    • 3.4 Broad Aims
    • 3.5 Objectives (Short, Medium and Long Term)
  • 4.0 Strategy and Justifications
    • 4.1 Competitive Strategy (Porter’s Generic)
    • 4.2 Segmentation
    • 4.3 Ansoff Matrix for Proposed Strategies
    • 4.4 Positioning
  • 5.0 Market Mix Standardisation vs. Adaption
    • 5.1 Product
    • 5.2 Price
    • 5.3 Place
    • 5.4 Promotion
    • 5.5 People
    • 5.6 Process
    • 5.7 Physical Evidence
  • 6.0 Implementation, Evaluation and Control
    • 6.1 Timescale for Each Objective
    • 6.2 Total Marketing Budget Available
    • 6.3 Control and Feedback Systems (Balanced Scorecard)
  • 7.0 Conclusion and Recommendations
  • References
  • Bibliography

1.0 Introduction

This report is an effort to develop a marketing plan for Holiday Inn in UAE. This has been done evaluating the current position of the hotel group and the future aims and goals of the same.

1.1 About the Company

Holiday Inn is a significant brand of InterContinental Hotel Group. For more than 50 years, Holiday Inn has been offering its friendly and modern services. The company’s 1300 attractive and convenient facilities are spread across the globe. The brand is one of the most recognized hotel brands. The brand has recently been launched with enhanced and contemporary brand identity and image. The brand is expected to come up with enhanced consistency and improved service levels.

2.0 Situation Analysis

Holiday Inn hotels are spread across various locations including North and South America, Middle East, Asia-Pacific, Central America, Europe, Africa, Australia and Oceania. Even in Middle East, the company has several hotels its facilities in Bahrain, Egypt, Israel, Jordan, Kuwait, Lebanon, Oman, Qatar, Saudi Arabia and United Arab Emirates.

In this project the consideration has been Holiday Inn hotels in UAE. This segment would analyse the current situation in UAE. In UAE, the hotel brand has its facilities in locations like Dubai, Sharjah and Abu Dhabi.

Holiday Inn UAE International Marketing Strategy Analysis

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2.1 Internal Environment

SWOT analysis has been used to discuss the internal environment of Holiday Inn in UAE. The company’s strengths, weaknesses, threats and opportunities are discussed to frame the strategies of this company.


Holiday Inn is a significant brand which has its reach throughout the world. The hotel has attractive rooms and facilities to offer the customers a refreshed and relaxed experience. Apart from that, the hotels have almost all the amenities starting from the high speed internet services to the specific fitness amenities. The company has come up with family line hotels with the concept of ‘Kids Stay and Eat Free’. The hotel has also introduced rewards for the priority club members. These rewards include free hotel stays to some free airline miles.

The company has recently re-launched itself in accordance to the changes in the market demand and trends. Another significant of the hotel is that it is a part of a leading group, IHG, which have a strong balance sheet. This would be helpful to spend more on capital expenditure to sustain the expansion and growth in the service industry.


During the recession time, the hospitality industry has been suffering from declining demand. The purchasing power of the customers has reduced due to the economic downturn. This has reduced the demand for Holiday Inn. Apart from them, there are certain services like shopping malls and spa services are not there in the Holiday Inn hotels, which can emerge as the weakness of this hotel compared to other luxurious hotels.


The entry barrier in the hotel industry is low allowing many players to enter into the business. The entrance of new competitors has come up as a threat for Holiday Inn. Furthermore, recent recession has emerged as a significant threat for the entire hotel industry. Holiday Inn has not been an exception and has also been affected by the adverse situations of the recession.


After the recent recession, with growing number of hotels, the hospitality sector in UAE, specifically in Dubai, is experiencing a rapid growth. When a large number of economies are struggling with the after-affect of the recession, the hotels in UAE can expect more opportunities in this specific sector (Sify News, 2010). This market situation has come up as a significant opportunity for Holiday Inn. The hotel must explore the opportunity and fetch the advantages of the growth through an increase in the market share.

2.2 External Environment

UAE is one of those countries which have been experiencing a raid growth. This growth can considerably be attributed to the development of the tourism sector. Oil, gold, enhanced engineering, luxurious lifestyle, attractive shopping malls have bee influential factors leading to the development of UAE.

Political Factors

United Arab Emirates has federal legislative, judicial institution, parliament and presidential features. However, still the cities like Dubai have got enough autonomy to control its own foreign trade policies. The country has been significant part of many key global organisations including World Trade Organisation, United Nation as well as is one significant member of petroleum Exporting Countries. The success of the country depends on the government regulations and its relationship with the foreign countries (Ogan, Songer & Rauf, 2008, p.8-9).

Economic Factors

UAE is a liberalized economy with a positive per capita income and significant annual trade surplus. The economic diversification has helped the region to be benefitted from other sectors apart from oil and gas. The expenditure on the job creation has been increased by the government and at the same time, the private sectors involvement has experienced a significant growth. The country has free trade zones where 100 % foreign ownership is welcomed with zero taxes, promoting more foreign investment in the country. Although, the GDP growth in the recent year has decrease due to the economic downturn, rigid international credit, and declining demand and deflated asset prices, the economy is expected to strike back in the coming years.

Social Factors

The people in UAE are known for their luxurious living styles, jewellery and elegant clothing. The tradition of this city is deeply rooted in the Islamic culture and traditions. UAE has a considerable number of wealthy people who do not bother to spend more on the luxurious life styles.

Technical Factors

Technologically, UAE has experienced a rapid advancement. The internet users in the Middle East have increased considerably leading to increasing numbers of hotel booking is done through the internet.

2.3 Market Analysis

UAE economy is primarily dependent on the oil and gas export. However, the UAE government has realized that the oil gas reserves are exhaustible, and therefore, it is very necessary to diversify the country’s trade and business for secure and stable future economy developments. In this process, the government has been trying to encourage its tourism and hospitality sector. As a result the UAE cities like Dubai, Abu Dhabi etc have become favourite tourists’ destination that pulls up the growth of hospitality industry specially the hotel sectors.

After the financial crisis of 2007-2009, the Dubai hotel industry was in deep crisis as number of inbound tourists and the purchasing power of people diminished significantly. During 2008, the revenue per available room was around $236 which came down to nearly $141 in 2009 (Walid, 2009). However, the overall growth of the hotel industry in UAE has been very rapid and attractive in terms of foreign direct investments. As a result, the many new players have entered in UAE’s hotel industry intensifying competition level. Specifically, Dubai has become an important of hub of hospitality as it attracts most number of inbound tourists. There are large numbers of hotels groups are presented in UAE like Jones Lang LaSalle Hotels, Holiday Inn, Burj Al Arab, Madinat Jumeirah, Dubai Marine Beach Resort & Spa etc. Most of the popular hotels are five-star rated and competition among these hotels is very high.

2.4 Portfolio Analysis (BCG Matrix)

Portfolio analysis of a company’s helps to present analysis of its existing different business units. It helps to define the prevailing position of the of the business units in respect of market growth comparing to relative market share. Holiday Inn is primarily in the hospitality sector and it has expanded its business most of the global markets like North America, Middle, South America, Asian Pacific countries etc. Besides, it has four major business brands in hospitality industry including Holiday Inn Resort, Holiday Inn Express, Holiday Inn Club Vacations and Holiday Inn Hotel. Currently, this hotel group offer a large number of services under these brand names.  Therefore, Holiday Inn mainly deals with these four major portfolios and considering this, the BCG matrix analysis can be conducted using following model.

Figure 1: BCG Matrix

Holiday Inn UAE International Marketing Strategy Analysis

(Source: Donnelly & Linton, 2009, p.31)

The UAE hotel industry has greater scope in respect of tours & tourism and business travels. Therefore, the market growth of hotels and room services is higher in UAE. On the other hand, the Holiday Inn’s market share in hotel and room services is low due to high market competition.  Hence, this hotel group is at ‘cash cows position’ and it can increase its market share by offering better services and high customer satisfaction.

2.5 Product Life Cycle

The hospitality services are constantly changing and the entire industry is experiencing major developments in service ranges. Moreover, the demand of hospitality services in UAE increasing due to economic and tourism developments. The following product life cycle model is useful in analysing the current position of hospitality services in UAE.

Figure 2: Product Life Cycle

Holiday Inn UAE International Marketing Strategy Analysis

(Source: Northern Kentucky University, 2011)

 As per the above model, the hospitality services are at its growth stage. These services are always in demand and further developments are taking place.  These major developments in hospitality industry are very important in maintaining the growth stage of hospitality services. Moreover, there is no major substitute available for hospitality services and hence, it will continue to be in growth stage for longer terms.

2.6 Current Positioning

Currently, Holiday Inn perceives itself as high premium and luxury services providers in the UAE market as it has achieved five-star rate. Therefore, it primarily focuses on the high end customers having high income level. It four brands have different aim different positioning. Holiday Inn Hotel has positioned itself value added luxury services including suits and other mixed room services. The Holiday Inn Resort focuses on high premium leisure and hospitality services. Holiday Inn Express targets the frequent travellers especially for business purposes. Holiday Inn Club Vacations is trying to position itself vacation purposes especially for families and friends.

2.7 Ansoff Matrix for Current Strategies Presently Adopted by the Company

Ansoff matrix is a popular strategic tool to identify the strategic alternatives or expected strategic directions. It be also used for identifying the existing the strategic moves followed by a company. The following figure depicts an Ansoff Matrix model.

Figure 3: Ansoff Matrix

Holiday Inn UAE International Marketing Strategy Analysis

(Source: Luck, 2008, p.346)

Holiday Inn is already present in UAE market and the services provided by it are already offered by its competitors. On the other hand, comparing to overall market value, the market share of Holiday Inn is lower and hence, the company is trying to follow market penetration or expansion strategy in UAE.

2.8 Market Trends

With the development in technologies, changing nature of the consumers and increasing competition among the prevailing players have driven the emerging trends in hotel industry of UAE. UAE hotel industry has become a matured market and due to increasing numbers of culturally diversified inbound tourists from different countries (especially from Western countries), the Emirate’s hoteliers are trying to blend the indigenous culture and the culture of Western tourists. Secondly, infrastructural excellence has become another notable trend in UAE. Moreover the attractive interiors and exterior designs are very important in attracting a large number of customers. Most of the tourist wants high luxury and premium services and hence, the exiting hoteliers are trying to achieve the highest star rating for their hotels. Generally, the price of hospitality services depends on the star-rating of the hotels and brand name.  Moreover, the business tourists have also become a major target market for the existing players. Continuous and innovative services developments and designs are also very famous in UAE.  Due to implementation of stricter environment protection law in UAE, the hotels are trying to follow green business policies. They are using eco-friendly technologies for their daily business operations that help to reduce the negative impact in environment. During the peak sessions, the availability of customers increases significantly and to meet the demands, the hoteliers are trying increase the number of rooms and other services (Emirates News Agency (WAM), 2011).

2.9 Competitive Environment (Porter’s Five Forces)

Porter’s Five Forces model is a significant tool to analyse the competitive environment of an organisation. The following is the macro environment analysis of Holiday Inn.

Entry Barrier

In the hotel industry, the entry barrier is quite low. The industry has experienced an increasing number of new entrants with more and more organisations entering into the hotel industry.

Bargaining Power of the Suppliers

Holiday Inn is apart of huge and globally recognized hotel group and hence enjoy a great power of bargaining. Moreover, it would not have to incur much cost to switch its suppliers. Hence, the suppliers’ power is quite low I this industry.

Bargaining Power of the Buyers

As the buyers of the hotel industry are scattered, the bargaining power is usually low compared to the institutional customers. Overall, the bargaining power of the customers is low in this industry.

Threat of Substitutes

There is no specific substitute for the hospitality services. However, looking at the competition, services of one hotel can be substituted by the services of another hotel.

Competitive Rivalry

The competitive rivalry is pretty high in this industry. The hotels put their efforts to attract the customers through differentiated and diversified service attributes.

3.0 Vision, Mission & Values

3.1 Vision

The company’s vision is to have rapid growth to make the brand preferred for its guests.

3.2 Mission Statement

The company aims to achieve its rapid growth through the establishment of strong operating system, focusing on the significant markets and key segments.

3.3 Brand Values

The brand is committed to offer quality service to its customers by offering diversified services to its customers.

3.4 Broad Aims

The broad aim of the company is to have considerable presence in the hospitality industry.

3.5 Objectives (Short, Medium and Long Term)

The short term objective of the hotel is to enhance its operating system, concentrate of the target market segments. In the process, the hotel group wants to achieve sustainable growth and in the long term, the company wants to be in the lead brand in the hotel industry.

4.0 Strategy and Justifications

4.1 Competitive Strategy (Porter’s Generic)

Being generic means to be acceptable globally and generating an idea or generic strategy which improves the competitive power of the company in a particular market. When a company wants to get an extra edge in the market and grab a market the Porter’s Generic Model strategy is adapted.

Figure 4: Competitive advantage

Holiday Inn UAE International Marketing Strategy Analysis

 (Source: Neil Botten, 2008, p.268)

The three basic strategies of Porter’s Generic model are –

Cost Leadership Strategy

To be the cost leadership in the market the company should keep its low price than its competitors. The company should concentrate on its unique feature to keep the price low and be the cost leader. Cost leadership is one of the most distinct strategies out of the 3 generic strategies. But special features also comes with extra cost thus luxury service company often focus on premium customers than being the cost leader. To be the cost leader in the premium service category Holiday Inn gives discount on services and also several flexible rate plans for the customers (Karlof, 1993, p.190).

Differentiation Strategy

The differentiation strategy is the next generic strategy adopted by the companies to target the customer who want to have a unique service or product from the company. The customer needs are very well understood and according to their need the services are provided to stay apart from the rest. This can be done by providing special services and product to the customers like the Holiday Inn providing services like Free High Speed Internet, full service facilities for meeting, comfortable work space and robust loyalty program etc. But on the other hand these services often come with some addition cost to the customers and to be a leader in this respect the company needs to formulate their strategies very carefully on marketing and promotion of the service to the target market (Poli, 2006, p.20).

Focus Strategy

The focus strategy is concerned with targeting certain segments of the market by focusing on the certain needs of the customer for a particular segment. It can be referred as niche marketing specific to a geographical location of to a particular customer group within the market. To compete with the market segment the companies may employ a very cost effective focus strategy to be the market leader. They need to adapt the strategy within a focus market and their services must be differentiated within the small market segment is very essential. As for example if we take the instance of car market few leading car companies focus on a particular customer group in the market like in the case of Porsche, the manufacturer of sports car from Germany. They mainly focus of performance segment of cars but not the other segments of the automobile market with superior technologies and better design and they are much more superior in their market segment (Stonehouse, 2004, p.177).

In respect to Holiday Inn it has a major focus on different customer needs. A major mass of customers at UAE would like to avail services that Holiday Inn is providing like for the premium customers Holiday Inn has a special Holiday Inn full service suites for premium customers while Holiday Inn Express is designed for the frequent business travellers who would like to avail the free internet access along with some extra comfort than available at other basic business hotels. For a favourite vacation with the family Holiday Inn Resort is designed with some amazing fun activities available outside the room to spend a good time and wonderful memories for the future. Holiday Inn Vacations is another category in the list from the company to provide a wide range of services, activities and amenities which is ideal for a beautiful vacation with friends and family (IHG, 2011).

4.2 Segmentation

Segmentation is the policy by which a company divides the market in small market segments to concentrate on particular areas. Market segmentation is mainly done to find the potential customers and target that segment with special strategy. The market segment is mainly categorized based on several attributes like Geographical Area, Sex, Age, Family, Occupation, Income, Race, Social Class, Lifestyle etc. UAE being one of the world’s youngest nation with a perfect mix of the modern architecture and old culture with beaches, warm seas and pleasant desert climate is a very popular tourist location thus Holiday Inn has a great prospect at UAE from the tourist along with other business oriented customers. At UAE the marketing strategy for Holiday Inn should be segmentation based on Psychographic motivation of the customers (American Hotel and Lodging Educational Institute, 2011).

4.3 Ansoff Matrix for Proposed Strategies

To identify the opportunity for growth of the company the Ansoff Matrix are often implemented developed by Igor Ansoff. This matrix helps businesses to decide their market growth and product/service strategies.  These growth strategies can be described as –

Market penetration strategy is employed for an existing product into the existing market to increase their market share. To penetrate the market companies introduce several schemes like loyalty discount, aggressive promotional campaign, revised pricing strategy etc.

Product Development is the strategy adopted by the companies who want to introduce a new product/service into an existing market. Thus developing a modified new product or service which can appeal target market is very required in this market strategy. Since Holiday Inn already exist at UAE with several penetration strategies to focus on particular customers thus as an alternative strategy the company should introduce new services like introducing spas and retail stores within the hotel which can be a big attraction for customers along with all the other luxury services provided by Holiday Inn.

Diversification is the growth strategy used by companies to introduce a new product into a new market. It’s a very risky strategy as the introducer has very little experience about the target market.

Market Development is the strategy often used when a company wants to enter a new geographical region in order to expand their business through new distribution channel and creating new target market customers. Since the target market is very well understood by the competitors’ strategies and growth rate, it’s an advantage in introducing into a new market for an existing product (ICSB, n.d.)

Figure 5: Ansoff Matrix

Holiday Inn UAE International Marketing Strategy Analysis

(Source: Mercer, 1996, p.171)

4.4 Positioning

While positioning new product Perceptual Mapping technique is a very useful method to determine the correlation between the service and the price of introduction from the map (Kotler, 2008, p.315). In the new market a perception mapping would reveal the gaps in the perceptions of the customers regarding their demands and the actual service being offered by the market players. The firm must try to position itself in the gap so as to derive greater confidence from the customers to provide it a sustainable competitive advantage.

Figure 6: Perceptual Mapping

Holiday Inn UAE International Marketing Strategy Analysis

(Source: Morris, Pitt, Honeycutt, 2001, p.297)

5.0 Market Mix Standardization vs. Adaption

5.1 Product

In case of Holiday Inn the product offered is a service which is intangible in nature. But before development of the product the company need to understand whether there is any requirement of the product or not and then the company should try to find the market afterward (The Chartered Institute of Marketing, n.d., p.4). The main product offering from Holiday Inn is customized luxury services mainly concentrated towards the tourists of UAE.

5.2 Price

The pricing is a very critical decision while placing a product/service in the market as it draws the firm’s revenue from it. Consumers are very sensitive to price in service market. If the customers are not able to pay for the product then it is of no use (The Chartered Institute of Marketing, n.d., p.4). The pricing policy of Holiday Inn service should be properly evaluated as there is good competition in UAE market.

5.3 Place

At right place and at right time the product must be available with right quality to be a market winner. The location of a hotel is very essential to attract customers. UAE being a hot tourist spot is a very good prospect for Holiday Inn (The Chartered Institute of Marketing, n.d., p.5). Initially the firm would target the developed cities like Dubai and Sharjah where it is already present and other business centres of UAE. After achieving break even the firm would also target the tier 2 cities and town in the nation.

5.4 Promotion

Several promotional activities can be adapted by the company like introducing discount schemes on advance reservations or holiday cards for loyal customer to attract more customers and make people aware of the new services provided by the hotel (The Chartered Institute of Marketing, n.d., p.5). Effective promotional tools like internet, television and print media would be used to spread the intended message of the organisation to its prospective customers.

5.5 People

The people are the frontline of the company who comes in direct contact with the customers. Thus they need to be very well trained and must posses’ good knowledge of the service so that they can customize the service for the appropriate need of the customers. The employees of the firm carry the reputation of the company so they must look impressive to the customer (The Chartered Institute of Marketing, n.d., p.6).

5.6 Process

The process mix is management of the whole process of its services. Good natures of the staffs are very required to keep customers happy (The Chartered Institute of Marketing, n.d., p.6). Other services like internet booking facility and easy access to all the services provided by the hotel can help the customer to understand and attract more customers.

5.7 Physical Evidence

For services it’s very difficult to convince the customer with intangible product. Thus the other tangible assets of the firm are accessed by the customers in order to get a sense of the physical evidence of their services like in case of Holiday Inn the transportation system for the customers by the company and offices for booking are needed to be very well organized to give the customer a feeling of their physical evidence (Rao, 2004, p.63).

6.0 Implementation, Evaluation and Control

6.1 Timescale for Each Objective

The steps in implementing a new service into an existing market needs proper planning and scheduling of the timescale. Holiday Inn is expected to launch its new service within 18 months with proper planning and promotion. The projected time schedule as expected by the study is given in the diagram below (Dworsky, 2008, p.142).

Holiday Inn UAE International Marketing Strategy Analysis

6.2 Total Marketing Budget Available

In order to introduce a new service into the market proper planning evolution needs to be implemented. After situation analysis and implementation the service need to be promoted to the customer. It need proper marketing to get the customer know about the new service and also the advantages over the others. This process requires huge funds from the company which is to be allotted for the proper marketing and promotion. In general marketing budget are calculated in three different ways.

Percentage Approach

In this approach percentage from each division of the organisation are kept for marketing and promotion, like 4% from production, 3.5% from salaries etc. For most of the companies it comes around 10 to 11% of the total organisational budget which goes to the marketing and promotion department. This is the most popular approach adapted by most of the companies.

Dollar Approach 

Other method which is also used for marketing budget calculation is the Dollar Approach in which a flat rate is calculated from previous year record and it is estimated from it.

In case of Holiday Inn both the approaches can be taken as it already exists in the UAE market (Greenbach, n.d.).

6.3 Control and Feedback Systems (Balanced Scorecard)

After implementation control and feedback system need to be developed to evaluate the effectiveness of the implementation. Various parameters are needed to be evaluated thoroughly to see whether there is any problem in any section or the area which are needed to be improved for better quality service. The various departments like financial, Customer, Business Process, Learning and Growth are given points on their performance and then evaluated to find the requirement for its improvement. A balanced scorecard technique can be employed by Holiday Inn to assess the effectiveness of its business strategies at UAE; this would not only help to assess its strategies but would also help in identifying areas which may need immediate attention (Balanced Score Card Institute, 2011).

Figure 7: Balanced Score Card Template

Holiday Inn UAE International Marketing Strategy Analysis

(Source: Pangarkar, Kirkwood, 2009, p.47)

7.0 Conclusion and Recommendations

Holiday Inn has a wide range of hotels and resorts in different parts of the world. This report was about International market strategy of Holiday Inn at UAE. UAE being an intensive competitive market in hospitality industry, the company provides a much customized service for every need of the customer and this is the main reason behind its success over the other. With the introduction of new services at UAE the company needs to do strong promotion and marketing for their unique services which are provided to the customers. With the increase in the level of service the Hotels at UAE are more recognized by the people. New services like spas and retail stores are needed to be added which will attract huge mass of tourist as well as business oriented customers as they can access all the necessary things during their vacation within the hotel along with the luxury.

As a recommendation the ‘Thinking Globally and Acting Locally’ strategy is very much recommended for the organisation. The implementation of this strategy would help in effectively taking care of the beliefs and sentiments of the target market. This strategy is very important as it defines the success of a firm in the international market to a large extent. With technological innovation coming up in a big way, nowadays companies are communicating with the different parts of the world. With better technology the company operations can be handled and evaluated in an effective way and provide the customers with quality premium services.

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