Budget hotel report

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    SCHOOL OF ARCHITECTURE, BUILDING & DESIGN Research Unit for Modern Architecture Studies in Southeast Asia

    Foundation in Natural and Built Environments (FNBE)

    ASSIGNMENT: A Comparative Analysis of 2 Businesses of Similar Industry in Different Geographical Locations

    REPORT TITLE: BUDGET HOTELS

    GROUP MEMBERS:

    NAMES ROLES

    LIM JOE ONN (0318679) -DESCRIPTION OF BUSINESSES -INTERVIEW QUESTIONNAIRE -TEAM COORDINATOR

    CHONG KE QUN (0319214) -PRESENTATION SLIDES

    HENG WEI YEN (0319584) -COMPARATIVE ANALYSIS OF COMPETITIVE TRAITS -ARTISTIC COVER

    KOH SUNG JIE (0318912) -KEY SUMMARY -MINUTES -OVERALL GRAMMATICAL STRUCTURE

    LEE KAI YUNG (0318314) -BIBLIOGRAPHY AND REFERENCE LISTS -DESCRIPTION OF THE HISTORY OF THE TRADE

    ONG SENG PENG (0319016) -RECOMMENDATIONS

    ENGLISH II / ENGLISH 2 [ELG30605]

    LECTURER: MS CASSANDRA WIJESURIA

    SUBMISSION & PRESENTATION DATE: 12 JANUARY 2015

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    TABLE OF CONTENTS

    NO TITLE PAGE NUMBER

    1 KEY SUMMARY

    3

    2 DESCRIPTION OF THE HISTORY OF THE TRADE

    4-5

    3 DESCRIPTION OF BUSINESSES

    6-22

    4 COMPARATIVE ANALYSIS OF COMPETITVE TRAITS

    23-30

    5 OBSTACLES FACED BY NEW BUSINESSES

    31

    6 RECOMMENDATIONS

    32-33

    7 BIBLIOGRAPHY

    34

    8 REFERENCES

    35

    9 APPENDICES

    36-48

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    KEY SUMMARY

    Throughout our research, budget hotels are a recent and blooming trade. We have chosen Apollo Inn in Penang and Grid 9 Hotel in Kuala Lumpur. Both hotels have similar characteristics of owning excellent reviews and the advantage of being located in the heart of a city. Both have a wide collection of rooms that caters to different travellers. Even with limited space, they managed to find unique ways to facilitate their guests by having a rooftop garden (Apollo Inn) or an interactive space (Grid 9). Despite having heavy competition with surrounding hotels, interesting tactics are applied to make them stand out from the rest.

    (100 words)

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    DESCRIPTION OF THE HISTORY OF THE TRADE

    As all humans need a place to sleep at night, facilities offering hospitality to travellers have been a feature of all civilizations. Whenever a traveller is abroad, he or she needs a place to shelter themselves when dusk arrives. Thus, travellers pay people who provide available space for them to rest. Hence, the hotel industry is born.

    During the modern age of globalization, travelling becomes more frequent. Therefore, tourism becomes one of the worlds largest and fastest growing industries. Our country, Malaysia, is a nation rich with numerous holiday attractions and diverse cultures, which become an asset to the countrys tourism industry. Thus, millions of visitors arrive in Malaysia every year. This generates economic growth and employment opportunities as the increasing number of tourists result in higher demands for hotels.

    Tourism in Malaysia started from the early 1970s, which gave rise to the hotel industry. It has become the second highest foreign exchange earner for the country after the manufacturing sector. After that, the hotel industry experienced an encouraging growth rate in 1994. In 1998, the new Kuala Lumpur International Airport in Sepang was completed, bringing in 25 million passengers per year and help the growth of the tourism industry as well as the hotel industry.

    As the number of tourists visiting Malaysia increased, more hotels were built. As a result, hotels were abundant in our country especially in tourism hot spots. They became a major contributor in our nations economy. Moreover, the hotel industry in Malaysia is being continuingly developed to cater more foreign visitors and provide better services all thanks to constant tourism development. The hotel industry in Malaysia is large. It offers accommodation ranging from simple lodging houses to luxurious five-star hotels. Thus, the visitors have a wider range of choices depending on their budgets.

    In view of the ever-expanding influx of tourists visiting Malaysia and increasing number of hotels, the hospitality industry competes aggressively and struggles hard not only to earn survival profit but to maintain its competitive advantage. Hoteliers in the country constantly update and improve their services because travellers are highly knowledgeable. With the advancement of modern technology, customers of hotels easily write their reviews online for people to read upon. Therefore, severe competition

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    results in little variations among product offerings and facilities in hotels. The service quality by frontline employees become the main factor determining the customers patronage.

    Nowadays, budget hotels are increasingly popular as they provide comfortable, clean accommodation and convenient service at an inexpensive price. However, due to the fact that the budget hotel industry is risky because of high cost and strong competition, budget hotels come and go. Many budget hotels are actually secondary or tertiary businesses of larger corporations and might shift into another industry through time. Thus, finding a budget hotel that lasts for more than a decade is quite rare. As for this assignment, we chose to compare and contrast between two budget hotels, Apollo Inn in Penang and Grid9 Hotel in Kuala Lumpur.

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    DESCRIPTION OF BUSINESSESES

    The research in this assignment is based on the analysis of two budget hotels, namely

    Apollo Inn and Grid 9 Hotel. Both budget hotels are located 356 km away from one

    another. Apollo Inn is located in Georgetown, Penang while Grid 9 Hotel is located in the

    heart of Malaysias capital city, Kuala Lumpur.

    Location of Business 1, Apollo Inn:

    Location of Business 2, Grid 9 Hotel:

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    We selected a hotel in Georgetown, Penang and a hotel in Kuala Lumpur because these

    places are major tourist destinations and dense urban areas. This guarantees a wide

    range of customers. Also, both Apollo Inn and Grid 9 Hotel possess excellent reviews by

    online rating systems.

    TripAdvisor and Agoda ratings for Apollo Inn:

    TripAdvisor and Agoda ratings for Grid 9 Hotel:

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    Business 1: APOLLO INN

    Current location: No. 7, Jalan Sungai Ujong, 10100 Georgetown, Penang

    Number of branches: 2

    Number of employees: 6 (3 locals, 3 foreigners)

    Main service: Accommodation

    Number of rooms: 20

    Room types: Deluxe Family, Deluxe Double, Standard Twin, Dormitory

    Estimated current number of customers: Full - 50

    Peak season - 50

    Average per day - 35

    Opening Date: November 2009

    Expenditure per day: RM 1500

    Annual Revenue Figure: RM 1 million

    Recent Development: December 2013 - Opening of Chulia Mansion, the first branch of

    Apollo Inn

    March 2014 - The disappearance of flight MH 370 severely decreased the number of

    foreign customers

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    Apollo Inn was founded in November 2009 by a partnership of 4 businessmen. As

    Georgetown, Penang was granted UNESCO World Heritage Site status in 2008, the

    number of tourists visiting Penang drastically increased. Thus, the founders found a

    great opportunity to open a new hotel in downtown Georgetown. As available land in

    the Core Zone of Georgetown is scarce and expensive while land too far away from the

    heritage sites had less potential for attracting customers, the founders rent a piece of

    land in the Buffer Zone of Georgetown.

    This map of Georgetown shows the

    Buffer Zone and Core Zone marked by

    UNESCO. It is shown that the Buffer

    Zone is not too far away from the

    major tourist attractions in the Core

    Zone.

    The Core Zone has a high density of

    heritage buildings while the Buffer

    Zone has a moderate density of

    heritage areas.

    Apollo Inn is renovated from an abandoned building lot built in the 1980s. The capital to

    start this business cost 1 million. This includes fees for renovation, furnishing, painting

    and electronic systems.

    Since its opening in November 2013, tourists kept pouring in due to its strategic location

    near Georgetown, Penang. Most of the customers are from the ASEAN region, mainly

    Malaysia, Singapore and Indonesia while 40% of customers are from other regions, such

    as China and European countries. To date, Apollo Inn had served customers from over

    30 different nations.

    The Asian customers on the right are

    locals while the Caucasian customers

    on the left are from Australia.

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    Rooms provided by Apollo Inn

    There is a variety of rooms in Apollo Inn. Each caters different groups of customers with

    different needs.

    DELUXE FAMILY

    The Deluxe Family room is furnished

    with a 2 luxurious Queen-size beds and

    an LED TV, specially catered for a family

    on a holiday.

    Price: RM 180 per night

    SEMI DELUXE FAMILY

    This room has a Queen-size bed and a

    single bed. It is recommended for

    smaller family groups.

    Price: RM 140 per night

    DELUXE DOUBLE ROOM

    Couples on a holiday usually book this

    room as it has a luxurious Queen-sized

    bed and a romantic view of

    Georgetown.

    Price: RM 110 per night

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    STANDARD DOUBLE ROOM

    Couples who want a cheaper alter