Turiba University

Faculty of International Tourism

Nataliia Doroshenko, Jana Gorkusenko, Saidjalolhon Makhametov

SMA1V2

Hotel “titanic” business plan

Department of Commerce

Supervisor: Aivars Kalniņš

Riga, 2014

Executive Summary

Tourism business is fast growing industry of Latvian economy. The main services provided for tourists are guided tours, food and beverage and accommodation services. There are more than 90 hotels of different types (luxury hotels, apartments, budget hostels). But the water hotel “Titanic” will differ from other standard hotels due to unusual design of rooms and location. The hotel is located on the right bank of Daugava River in the city center. As the river freezes in Riga in winter the “Titanic” will be relocated to the Liepaja city. So it will have 2 official locations: Riga city (from April till October) and Liepaja city (November-March).

Hotel Product

The hotel “Titanic” is located on the ship, where the cabins are converted into hotel rooms. It has 45 rooms of such categories, as standard single (17 rooms), standard double (13 rooms), suit (9) and suit deluxe (6). Half of the rooms have the exit to the Daugava River, another part will have old city view. Each room has unique design: the national style of sea countries, such as Greece, Norway, Madagascar and others, will be used for decoration.

The main characteristic of the hotel is the security of the customers: guests can be sure that their private life will remain private. “The quietness of our guests is our priority”.

Also the guests will be offered different F&B facilities: 1 bar and 2 restaurants. One restaurant is oriented on traditional European cuisine and has 40 seats. Another restaurant offers the wide range of fish dishes from all over the world. It has 30 seats and half of them are located on the deck (in summer period). Bar has 10 seats and proposes different kind of drinks. Working near the reception barmen will offer the guest a cup of coffee and wrap (if it is cold outside) or a cocktail in summer time to make the waiting period more pleasant.

Those who would like to celebrate their birthday or wedding on the ship will be offered special proposition from the hotel and will include not only decoration, but also discount for the room, free breakfast and amazing place for photo session.

Moreover customers will get such services as:

• Parking for boats;

• Free Wi-Fi;

• 24-hours reception;

• Possibility to pay cash or by credit card;

• Table-top games and big library in a reception zone;

• Ticket booking and delivering to the hotel for different types of transport;

• Waterslide to Daugava River.

Some additional services which are offered by the hotel for extra money are the following:

1. Bike hire

2. Laundry services

3. Boat rent

4. Excursions in Riga Old Town

5. Taxi service.

This list is not exhaustive, as with the increasing number of consumers hotel will be diversifying its additional services.

Target Group

AIO profile of the hotel “Titanic” customers:

1. Activities:

• Business people, who do not want to stay at typical chain hotels;

• Photographs, fans of sailing sport and boating;

• People who are looking for unusual accommodations

2. Interests:

• Families with children

• Customers who would like to taste all existing fish dishes.

3. Demography:

• Different age groups (the hotel provides entertaining programs for everyone + 1 room for disabled person)

• Medium and high income

4. Geography:

• Hotel is mostly oriented to American travelers, but it is expected to be of the high interest among European citizens

• Tourists from Scandinavian countries (the ferry crosses between Riga and Stockholm once in 2 days, it means that at least 1 night the travelers can spend in the “Titanic” hotel.

• In winter period, when the hotel will be located in Liepaja the list of potential clients will be filled up with Germans because of good ferry connection (every day except Tuesday and Saturday there is a ferry Liepaja-Travemünde).

Quite a high proportion of customers will include locals who want to celebrate a wedding or another memorable date on the river bank.

Analysis of Competitors

Being the unique decorated hotel with the location on the river bank the hotel “Titanic” has no direct competitors yet. But the main problem as how to persuade the customer to choose not standard room in 4-5* hotel in Riga but come to the ship and stay there at least 2 nights. As it was mentioned before, there are 92 hotels in Riga. The hotel position in the market is boutique hotel with medium price that is why the hostels cannot be analyzed as our competitors. The main criteria to define them are the territorial location (no more than 4 km from the “Titanic” hotel), the list of services (Wi-Fi, parking, family rooms, facilities for disabled people, restaurants) and price policy (up to 99 EUR per night). We consider that the main our competitors are the following:

1. Radisson Blue Daugava

2. St. Peter’s Boutique Hotel

3. Hotel Garden Palace

4. Hotel Gutenberg

5. Hotel Justus

6. Kolonna Hotel Riga

The detailed analysis of our competitors in Riga you can find in Appendix 1. After the analysis it is clear that the main competitors in Riga are St. Peter’s Boutique Hotel and Kolonna Hotel Riga as these 3 hotels provide similar services, same price policy and are positioned on the market as the hotels with unique style. But the “Titanic” hotel has a competitive advantage in F&B facilities, as the St. Peter’s Boutique restaurant is opened only from 14.00 to 22.00. But “Titanic” will provide eating services from 7.00 to 24.00 and bar will be working from 7.00 to that moment when the last guest will leave the hotel.

Main competitors in Liepaja:

1. Libava Hotel

2. Europa City Amrita Hotel

3. Fontaine Royal Hotel

4. Bura Hotel

5. Promenade Hotel

The equal analysis for Liepaja enterprises is shown in Appendix 2. In this case the main competitor in the city is Libava Hotel, which offers more wide range of services.

The location of hotel “Titanic” and the main marker players in Riga and Liepaja are described in Appendix 3 and 4.

After analysis we realized that the hotel “Titanic” will have 3 direct competitors. That is why there is a necessity of permanent investigation of their strategies.

Staff of the Hotel

The hotel employees are the main people who create the value of the hotel service. The total number of personnel is 46 people. There are 7 departments: accounting, marketing, personnel, front office, housekeeping, food and beverage and engineering. Table 1 shows all employee with their salary.

Table 1