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Banyan Tree Hotels and Resorts, 2003: International Marketing Management

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Globalization has become a driving force for many industries in today’s world. Many successfully-growing companies have realized that going beyond the borders of their domestic market is the key growth strategy. Not only does an international expansion evolve as a reaction to ongoing globalization, but it is also a way to stay ahead of the ever-intensifying competition. Whenever customers are spread out geographically, the presence in every key market is crucial for the business to flourish. Despite being associated with the numerous challenges, expansion is a rather risk-intensive undertaking, as many world-known companies are looking for ways to grow and diversify their portfolios by choosing this strategic option.

Tourism is a beneficiary of the irreversible globalization process. Significant increase in global travel has led to an extension in the world tourism market, adding considerably to the potential for further growth. Many tourism companies and operators perceive the current situation in the market as an opportunity to spread their roots into new locations close to their key customer markets.

Being global in the tourism business is important as competition is global and so are the customers. Through brand expansion, acquisitions, mergers and/or joint ventures with local partners, hotel and resort operators are executing every possibility to develop a stronger presence in the international market. Each of the high-end players in the tourism industry has been following their own unique expansion strategy. Marketing strategy and growth opportunities in the global market recognized by Banyan Tree Holdings, one of the high-end operators in Southeast Asia region, will be presented in this paper. Examination of alternatives followed by recommendations related to the execution of the expansion plan will conclude the analysis.


BackgroundThe Banyan Tree Holdings is a Singapore-based luxury resort and spa operator. It is a privately held company with revenue of $154 million in 2003. Founded as a family business, Banyan Tree was born on the land of a former tin mine with the idea to create an atmosphere where two people could have a wonderful experience and recapture the magic of romantic holidays in a culturally evocative and exotic setting. The company was the first to introduce the concepts of private pool villas and tropical garden spas pavilions to the world.

The company has proven to be very successful in less than ten years. Since 1995, when the first Banyan Tree resort was opened, the company has grown its portfolio to 9 destination resorts operating under two main brands , 43 spas and 40 galleries in 2003. The first resort was opened with just seven staff members; eight years later, there were more than 3 000 employees comprising over 30 nationalities.

An accelerated expansion has transformed Banyan Tree into an internationally recognized and highly awarded hospitality brand with quality resorts in Thailand, the Maldives, Indonesia, and Seychelles. Leveraging Asian traditions, the company invests heavily in brand building. Strong brand reputation and high customer satisfaction brought the company success among customers, prospective investors and developers from different countries.

In order to compliment the Banyan Tree resort experience and deliver its core promises of romance, intimacy and rejuvenation, two other businesses were developed. While spas were built to fulfill the promise of rejuvenation, galleries were intended to support local village communities through craftworks, thus strengthening the corporate image of the company. Initially these businesses were physically co-located and reinforced each other. In 2003, the first stand-alone spa and a gallery were opened in China and Singapore. The objective behind independent ventures like Museum Shop and Spa Shanghai was to take the brand into new areas.

Along with impressive growth, the company has demonstrated the seriousness of its commitment to environmental conservation and community development. The Green Imperative Fund was established by the company to raise funds for natural environment conservation and preservation, as well as to support community development projects. The social responsibility standards practiced by the company include building and running resorts with as little environmental damage as possible, hiring and buying locally, engaging communities to produce cottage crafts to keep local cultures alive. Maintaining the high level of social responsibility is considered to be even more fundamental to the company than the idea of company growth.

3.External Environment of Tourism

The external environment in which the Banyan Tree operates can be described as a rather dynamic. Ongoing globalization, natural disasters, terrorist attacks and various market changes have had an extended impact on global tourism. Radical external changes that occurred in the last years, led to the revision of core strategies and adjustment of destination management. Considering that external environment has a great influence on the Banyan Tree’s survival and success, a brief industry and market analysis is to be conducted.

3.1. Industry AnalysisIn the past 50 years, the growth of international tourism has been phenomenal. Tourism is one of the largest industries in the world. According to the World Bank, it is also one of the fastest growing sectors in the world economy. Tourism and its related activities generate 11 % of GDP and account for 200 million jobs worldwide. In 2003, there were nearly 700 million international tourists.

While the scale of the industry and the rate, at which it continues to grow present many opportunities, tourism is one of the world’s most centralized and competitive industries that clearly illustrates the global reach of international tourism companies. The international tourism industry is highly fragmented, with a large number of companies that organize tours to various destinations at appealing prices. Due to the nature of the industry, companies find it difficult to respond effectively to changes in the market. The presence of a large number of companies affects advertising and promotional activities within the industry. For example, a resort might benefit from the publicity generated for the leisure facilities in the area, and so might not decide it worth the cost of advertising themselves. As a consequence, advertising and promotion might suffer as a result of the industry structure.

A leading branch in tourism is the hotel sector, where sixty to ninety percent of all companies are concentrated. According to the available statistics, the number of big companies in the hotel sector is relatively small. Even so, these global resort and hotel chains generally account for more than half of the total turnover.

In terms of competition, many big companies decide to compete on the basis of cost. Thanks to standardization and global strategies they are able to develop new markets and offer their customers a variety of services at very competitive prices. The approach is to create the customer value on the basis of price. There are also companies that compete on the basis of differentiation. Considering the wealthy customers´ willingness to pay for something very special, companies adapt the market strategy of destinations. Differentiation strategies work because of the need for variety of unique holiday destinations. Those companies competing on the basis differentiation are price makers; they can set prices that are higher than the market costs. Oberoi Group is a good example.

As far as target customers are concerned, global hotel chains like the Hilton, the Ritz Carlton have mainly been focusing on a group consisting of business class and corporate clients. For Banyan Tree and Oberoi the target customer groups are wealthy couples and honeymooners. There are also kids-friendly hotels. Families with children is the target group for Disney and Universal Studio Hotels and Resorts.

In recent years, the competition in tourism has been primarily around destinations, because customers begin their selection process by choosing destination and only then do they choose the combination of services they wish to consume. In view of that, resort and hotel chains are concentrating their forces on exploring new locations with the potential for a sustainable inflow of tourists.

3.2. Overview of the Market DevelopmentThe development of the global tourism market has been growing through different phases that were influenced by a global economic development, innovations, population preferences, and hospitality standards.

The first phase of world tourism lasted during the period when hospitality standards were introduced. Along with a new level of excellent service, the concept of a European-style hotel was immediately accepted in the market. Small and trendy hotels with drinks and food not included in the price, and activities and night life designed mainly for adults, these hotels were built during the European period of market development. The second phase was the American period, which coincided with American multinational corporations spreading around the world. To service business class travelers and corporate clients, global hotel chains such as Hilton and InterContinental opened their hotels around the world.

The third phase that the global tourism market is entering today can be characterized as an Asian period. It is the time when China and India is attaining the level of economic development where their population will begin to travel. Asia contributes 30-35 per cent of the world’s GDP. Combined financial reserves of China, Japan and rest of the Asia support the deficits of the West. Important for the tourism market demographic trend indicates the rise of Asian middle class, particularly in China and India. It is the new middle class that boosts the domestic and outbound tourism, as the newly rich wish to travel around their country as well as see the world around them. Rapidly growing middle class means growth across all sectors: from domestic to the luxury end. Hence Asia-led growth is expected to be the defining feature of the tourism market in the next few decades.

Apart from commoditization of the tourism in the Asian era, the market conditions will be further affected by the following external changes:-decreasing availability of unoccupied locations-climate change-further development of click and go tourism-governmental restrictions and environmental policies-increase of low cost travel operators-increasing costs of marketing and decreasing response of target groups-intensifying competition in tourism destinations and services-the property boom and its current valueTourism companies will have to react to these changes by adapting their strategies, modifying management styles and service standards.

4.Company AnalysisYears before the first resort was opened, the company began its existence by identifying latent customer needs in the affluent tourism segment. Couples who valued privacy, exclusivity, and romance in their travel were the target customer segment to whom Banyan Tree pioneered a new resort concept. From the start, the company represented romance and intimacy. It is not luxury or exclusivity that defines the company, what makes Banyan Tree luxurious and exclusive is the unique product concepts created by the company.

4.1. StrategyFrom the beginning, the company has focused on creating a niche position by differentiation. Feeling that the business would not get anywhere if it does not own the brand and realizing that the cost advantage alone would not outlast competition, the company objective was to build a powerful hospitality brand with an Asian identity that would be used as a sustainable base on which to grow. An integral part of the company strategy has been the differentiation through the strong brand that would give an advantage to compete globally. Branding makes a big difference in creating competitive advantage.

This strategy was the only way for the company to be a price-maker and not a price-taker. Any enterprise, even with innovations, can only set its own price until cheaper competitors emerge. In its approach to brand building, the company made an emphasis on the emotional responses and recollections from customers. While these intangible characteristics are more difficult to create, they are more valuable as they cannot be easily copied by competitors like any specific product or service features.

The three core components of the Banyan Tree brand are hotels, spas and galleries that reflect the natural environment, culture and heritage of its locations. Initially there were inseparable elements in delivering the complete Banyan Tree experience. The decision to start opening standalone spas and galleries was a part of diversification and growth within the brand strategy. The brand values are translated into everything within the Banyan Tree resort – from architectural and product designs, to service delivery and synchronized activities. Dedicated in-house architectural and marketing team successfully combined distinguished design, excellent service, luxurious spa experience and innovative marketing efforts to differentiate the company from competitors.

Finding partners with financial resources, local knowledge and connections were considered to be the most important factors for expansion. In execution the international expansion, the entry strategy adopted by the company can be described as a combination of joint ventures with local partners and acquisitions of hotels that could be rapidly transformed into quality accommodation. Owning 100 per cent of hotels was considered to be expensive and too risky for the privately held company. The model for expanding was to go into partnership with others as the Banyan Tree was not interested in just managing hotels.

During the expansion beyond the Asia region, the company was able to avoid direct competition by focusing on less commercial but high quality destinations. While those locations had a potential, they would be in line with the philosophy of the company, the competition there was insignificantCurrently, the Banyan Tree is trying to develop a new lifestyle concept. By using traditional architecture and hiring local villagers to work on the site and lead tours, the company is attempting to create tourism with minimal ecological and social impact. While the Banyan Tree strongly exercise social responsibility towards environmental conservation, such an approach is intended to put the company in a stronger position than many of its competitors.

Over the years, the company has created a unique brand in Asia associated with the romance of travel. Leveraging the brand to generate customer loyalty was the only way for the company to remain above the price wars. In its present stage, the company objective is to become a leader in their niche while maintaining the carefully cultivated brand equity. There are plans to further promote the Banyan Tree as a company steeped in Asian traditions and environmental sensitivity.

In relation to marketing activities, they are centralized at a corporate office. The team of specialists in sales and marketing has been built up to ensure consistency in branding, facilitate cross-market coordination and new product launches on an international basis. While centralized marketing operations give advantages of economies of scale, regional managers are responsible for delivering the brand values and tailoring the products to the exotic site location.

Knowing the importance of cultivating cooperative relationships with business partners of the various channels, the company is actively working in relationship building. In some markets, the sales offices is decentralized, and working from the bottom to the top, However, the major negotiations with tour operators and distributors are managed from the corporate headquarters.

Concerning the brand portfolio, spas and galleries are managed under the umbrella of the Banyan Tree brand. In order to target a broader market segment but at the same time avoid the risk of diluting the Banyan Tree brand, a sister brand Angsana was created. It has a different, more contemporary, trendy and affordable image. Angsana aims for a younger customer in search of culture and adventure. Though the teams responsible for managing Angsana and Banyan Tree brands are located in the same corporate headquarters, marketing activities are split, which reflects different brand identities and customer bases.

4.2. Expansion: Destinations and Target MarketsAs a company founded in Asia, initially the Banyan Tree has mainly been focused on the Southeast Asia. The first resort was opened in Laguna Phuket, Thailand. From an abandoned tin mine, the place was transformed into an award-winning resort that not only has proved to be a highly successful project but also was a vivid example of responsible tourism. Apart from hiring many local inhabitants, the company also promoted the cultural environment of the region. A gallery opened in the resort sold craftworks, jewelry and other household items produced by local people. The following year, the second resort was opened in the same region. It was constructed in Bintan, Indonesia.

Due to almost instantly increased regional competition in Phuket, the company took a decision to look at untapped territories in the Indian Ocean region. The same year, the company opened its second resort in the Maldives. At that time, the place was a new eco-tourist destination. A beautiful archipelago, with white sandy beaches and the local government support for development activities, seemed like a perfect place for the resort. The insignificant competition and a relatively undeveloped tourism made the Maldives an even more attractive place to expand into.

The company was very much interested in expansion further into the Indian Ocean region, as the islands, with their exotic site location and beautiful sceneries corresponded well with the core brand promise, and thus were among the most important factors for expansion. The second resort in the Indian Ocean region was built in the Seychelles, the place with a great sense of exclusivity, and a potential for the high-end sustainable tourism development. Maintaining its commitment to the protection and conservation of the natural environment and biodiversity, the company opened the hotel and spa resort. While it proved to be difficult to build villas on the mountainous landscape, and the project ended up being a large investment, it was worth it. Even with the room rate above market competition, the occupancy rate well exceeded the initial expectations.

As far as target markets are concerned, resorts in Thailand and Indonesia were marketed to European and Asian travelers. The main focus for exotic destinations in Indian Ocean was the Western market. In Europe, romantic getaways were very popular among high spending holidaymakers. France, Italy and United Kingdom were the key markets where the company concentrated its resources on generating publicity and building relationships. Convenience of flying out from the main European airports would make an unforgettable paradise offered by the Banyan Tree only ten hours away. Asian travelers were less likely to fly all the way to the Seychelles or the Maldives.

4.3. Cultural EnvironmentThe image promoted by the Banyan Tree is very much reflected in the company cultural environment. Not only does the management work hard to evoke an emotional response from the customers, the sense of commitment among employees and a passion for what they do – are the yardsticks of the company philosophy.

The Internal cultural environment disposes the company to building a brand loyalty and creating a sense collective pride, which is also very important. Understanding that efficiency and service means nothing if people do not have their hearts behind their jobs, the company is committed to ensuring that employee at all levels feel that the Banyan Tree is their company. The approach used to achieve this sense of ownership is structured empowerment. Inputs from employees are of a great value and those suggestions that were adopted received reward from the company. Management personnel, front-line and service staff are encouraged to think about how to reinvent the resorts and how to create and better deliver experience to customers. Cultivating a sense of collective achievement and excitement motivates people and makes them more dedicated to the company.

The Banyan Tree is a multicultural and multinational company, where no single nationality dominates over others. A Banyan Tree culture of internationalism helps employees, regardless of their nationalities, work together harmoniously and productively towards the attainment of common goals.

4.4. International Growth: Key Issues and ChallengesIn 2003, the rapidly growing resort company with unique product concept and strong brand reputation was at a decision making juncture. Even though the company had already secured a competitive niche position in the global tourism scene, the Banyan Tree was looking to pursue the growth opportunities in the world market. The main vision for the expansion was to develop itself into a leading niche player in the global scene within the shortest time span possible. Market expansion and geographical diversification were mainly aimed at increasing the customer base and reducing the company’s exposure to regional risks.

Though the general environment in the industry appeared to be favorable for the Banyan Tree’s expansion, the company had a set of challenges related to the market expansion.

Key issues facing the Banyan Tree at this stage were:-where the company should move;-which new countries and locations offered the most attractive opportunities and are more likely to enhance Banyan Tree’s image and strengthen its international position;-how fast the company should move to develop a stronger presence;-how to maintain its differentiated position and deliver more values to customers;-how to ensure fast expansion without jeopardizing the carefully cultivated brand equity;-how the company could make use of its favorable social positioning to better respond to new tourism trends.

The expansion strategy that would help the company to stay ahead of the intensifying competition had to address these issues.

5.Expansion OpportunitiesOpportunities presented by the current market conditions, defined several alternatives that would align well with the company’s philosophy.

In terms of geographic expansion, the first alternative for the company was building on its success in the European markets to make an entry into other western markets. The presence in the European market has been established from the time the Maldives resort was developed in 1995. Later one, with the launch of the resort in Seychelles, the share of the market has been increased even further. Despite traveling a long distance, almost Âľ of all customers visiting these locations were from Europe.

Considering the large number of high spending European customers, the company could consider setting up resorts within a short flying distance from major metropolitan centers in Europe. High quality destinations with characteristics compatible with the Banyan Tree values and a relative proximity to the key markets are the United Arab Emirates in the Middle East, Morocco in North Africa, and the south of Greece in Europe.

A second possibility exists in Asia – Japan, China and India. With their high economic growth rates and rapidly increasing middle class, the presence in these countries would give the company a competitive advantage. Cultural proximity and relatively low labor costs would enable the company to attract large volumes of local tourists and implement the value proposition. So far, the Banyan Tree has already made its first attempt to enter into the China market. The stand-alone spa opened in the Westin Hotel received high customer satisfaction and favorable responses. India was also considered as a potential market. The company presence in Thailand could be used as a link to China, as well as to neighboring countries. International tourists are likely to travel from Thailand to Greater China. Unique historical and cultural Tibet would be a perfect location for sustainable tourism development. The resort in such spiritual place would be a perfect place for the rejuvenation of the body, mind and soul.

A third alternative that could be considered is Central America. Interest in the Central American tourism sector has been increasing significantly over the past couple years. It has been related to the fact that this region has experienced some of the highest tourist arrival growth rate around the world. The local governments have declared the tourism sector a high priority, making it a really great opportunity for the Banyan Tree and others to spread its roots in this promising environment. Locations that could be considered are Mexico, and Barbados.

In terms of diversification, organic growth seems to be the best option for the product line extensions. Organic diversification within the central strategy means that new product offerings are consistent with the brand philosophy and remain a top priority with customers. New opportunities translated into new products must be the natural outgrowth of what the company is currently doing. For example, the spa business began as an inseparable element of the Banyan Tree experience. Later on, it began to become a stand-alone business.

The dramatic increase in popularity of the spa and wellness industry since 2001 represents a significant opportunity for the Banyan Tree. Asian-inspired spas are becoming popular destination for wellness-minded travelers. Regions where spa and wellness experiences can be particularly popular are Asia-Pacific and Middle East.

With its own spa academy providing accredited training courses for spa therapists and six spas, the Banyan Tree is already a market leader in the spa industry. The company has succeeded in establishing itself as one of the world’s leading spa management companies. To secure the leading position in spa industry, the Banyan Tree could promote further the spa and wellness experience as a “value-added” product for customers staying in the Banyan Tree resorts and hotels. Organic growth for the company would be entering into management agreements with hotel chains and resort groups to manage spas in their luxury premises.

Medical spa and “spa communities” are expected to be new evolving trends due in part to market demands. Apart from traditional spa services (cosmetic and dermatological treatments), medical spa would go beyond basic skin care and will provide services for those who require medical involvement. The generation of age-consciousness baby boomers who are looking for more result-orientated treatments would be the target customer group. “Spa communities”, will also be focused to fulfill the needs of baby boomers. Facilities would provide customers with a healthy lifestyle, centered around spa-going. Premier spas with residential properties built around healthy-living activities and amenities like workout rooms, fitness classes, healthy cuisine, spa treatments and health education is a very attractive alternative option for the Banyan Tree’s product line extension.

Another expansion opportunity for the Banyan Tree could be a brand extension. The company could consider expansion into other related businesses in order to increase and leverage the brand equity. The current strength of the Banyan Tree brand would provide customers with confidence in the quality of new Banyan Tree-branded product offerings. Analysis of the latest trends in the hospitality sector revealed two possible directions in which the brand extension could take place.

As a response to the demand for new lifestyle needs and desires generated by the Banyan Tree experience, the company could offer the opportunity to be the owner of a leaseback villa located in the resort. Through a freehold ownership of the villa that is leased back to the Banyan Tree, the owner would be guaranteed an annual return on the property, along with the complimentary use of the villa during a certain period of time per year and including an access to amenities and services of the Banyan Tree resort. The company will profit from fully managing the property, which will include renting it out or the remaining period of the year.

An additional possible direction for the brand expansion could be the launch of a luxury destination club that would offer its members the Banyan Tree brand experience at exotic destinations. With a one-time joining fee and a fixed annual payment, the company would provide its members with the portfolio of gorgeous properties (villas, townhouse and apartments) at the most exclusive destinations. Joining the club would be an interesting idea for baby boomers and high net worth individuals, who, instead of investing in a leaseback vacation home and spending every holiday at fixed location, would prefer to travel to different exotic locations and stay in luxury properties.

5.1. Possible Implications of Expansion ImplementationImplementing an expansion strategy is always a challenge. With all the attractiveness of the above presented expansion alternatives, there are a number of possible implications of their implementation that have to be considered beforehand.

One of the key elements of the foundation for the growth strategy is financial resources. Growth has never been cheap. In many cases, it requires significant upfront financial resources. Lack of sufficient capital to fund the expansion can put the implementation at serious risk. For the Banyan Tree growth plans to expand in the global market, the financial strength is crucial. Currently, the Banyan Tree is a privately held company, and although the annual profit accounts for almost $30 million, the company has to build up financial muscle for its global expansion. An effective way to raise necessary capital for the further investments is to go public.

Though being public will make the Banyan Tree more exposed to outsiders (shareholders and other interested parties), IPO is the only effective way to generate much needed cash for the expansion projects. The only expansion alternative presented in the previous section which will enable the company to grow without significant capital investment is entering into management agreements with hotel chains and resort groups to manage their spas. If the company decides to stay private, and expand only with its own funds, there is a risk that the company would not be in a position to react effectively to market changes.

Another set of implications is related to the geographical expansion. One of the key components of the company approach is the cost of labor. In some of the markets (America and Europe), it might be difficult, if not impossible to implement the value proposition, since the staff-to-guest ratio is very high in the Banyan Tree and the costs of employing the same number of people in America or Europe would be much higher than in Asia. In view of that, the company will be faced with the decision as to whether to keep the same staff-to-guest ratio and charge higher rates, increase operating costs as a result of higher labor costs or attempt to provide the same level of personalized service with less staff.

According to the organizational structure in the Banyan Tree, managers are playing two roles. The first role includes managing the resort property, where managers are free to create their own personal touches, as long as they enhance the romantic ambience. Training staffing and product development is also relatively flexible across resorts. The second strategic role performed by resort managers is the role of the corporate level managers with responsibilities ranging from attending the corporate meetings, presenting field reports, discussing a wide-range of topics and taking decisions related to the future direction of the company development. As the company increase the number of properties and their geographical spread increases, such organization of the corporate structure might become a real challenge, because running and managing 5 resorts in one or two regions is much easier than dozens of properties spread around the world.

If the company decides to adapt an aggressive expansion plan comprising different options of given alternatives (geographical expansion, organic diversification and brand extension), the priority and sequence of projects will have to be developed. Good planning and, even more importantly, implementation are crucial for successful realization of the growth plan. Considering that the company is using an in-house architectural team to design and build resorts, working on several projects in the different regions would be rather challenging for the team. Sufficient time and concentration would be needed to create a unique resort that would reflect its physical and cultural setting.

An aggressive expansion plan carries the risk of organizational diffusion, lack of clarity and lack of cohesion in decision-making. The structure of the company will have to be adapted accordingly to its growth. The top management will have to ensure the cohesion in service standards and delivery of core promises across all existing and future resorts and properties of the company.

And last but definitely not least, the company management must be aware of possible implications related to the brand extension strategy. While a well-developed Banyan Tree brand image will facilitate the launch of new product and service offerings, there is a risk of diluting the brand. Too much brand extension can be viewed as an indication of poor brand practice, hence it has to be approached with a degree of caution. Brand is the most valuable asset. Only those brand extensions that are able to strengthen the Banyan Tree brand must be accepted.

5.2. RecommendationsBased on the analysis performed, the final recommendations related to the development of a stronger presence in the global market include the following:- The company should maintain its practical approach in its quest for expansion. Further expansion into low cost locations close to its key customers will enable the company to accelerate its growth by leveraging the growth in the tourism sectors there.

– Locations that will strengthen the Banyan Tree international presence and where the company will find the most attractive opportunities include 1) United Arab Emirates in the Middle East, 2) Morocco in North Africa, 3) south of Greece in Europe and 4) Japan, China and India in Asia, 5) Mexico, Barbados. The ultimate purpose of going global must be to remain among the best of the best with a representation of luxury boutique resorts in every key market. Expansion through opening a few hundred hotels and resorts across the globe is not an acceptable option for the Banyan Tree, as it not only will go against the company’s vision and commitments to the environment conservation but also will jeopardize the brand.

– Decisions related to expansion must be taken with the consideration of the company’s financial resources. Once the market research and the industry analysis are completed, the expansion strategy must be developed without delay. The strategic plan 2003- 2010 can be developed for seven years. Due to the highly dynamic nature of the tourism industry, continuous evolvement of new market trends , the revision and necessary adjustments of the strategic plan will have to be done very two years.

– In order to maintain its differentiated position, current and new product offerings should be consistent in delivering unique holistic experience that evokes romance and intimacy – core values. Even if the Banyan Tree decides to adapt the organic diversification, the company must stay in its niche segment and follow the company’s original business model – presence in exotic destinations. As far as delivering more value to the customers, innovation and inspiration are vitally important in creating value-added services to differentiate offers. An example could be new designs and/or products offerings that evoke an emotional response from customers and cannot be found anywhere else. Creating memorable and meaningful experience for the customers must always remain priority, as it is something that cannot be copied by competitors.

-To remain a powerful brand, the company has to continue investing in building brand loyalty and brand strength, which literally includes all the activities the company is currently doing – ensuring consistency and innovation, evoking emotional response from customers, continuing to care for the physical and human environment, revitalizing local communities. Possible expansion alternatives must be first and foremost considered from the perspective of their impact on the brand.

– With nature and adventure travel becoming new trends, high biodiversity areas are where most of the expansion will likely to take place. Considering that the company focus locations are those destinations where eco tourism can be developed, the company’s favorable social positioning would be very advantageous in responding to new tourism trends. Of course, not all of the Banyan Tree customers are environmental activists, yet many guests have a very positive reaction when they learn about the company’s strong social responsibilities commitments.

6.ConclusionWhile a highly diversified international tourism market presents many opportunities for growth, high level of dynamism and competition in the tourism industry makes the expansion more challenging and expensive. Becoming a leading niche player in the global tourism industry will not be a quick and easy goal to achieve.

Learning from mistakes and growing from successes, the Banyan Tree has a great chance to establish itself as one of a few global hospitality brands associated with prestige and luxury. Exploring new exotic destinations and further diversification of its unique product concepts are the real solutions for the Banyan Tree to grow successfully in its niche segment of resorts and spas.


1.Peter F. Drucker “Managing in a Time of Grate Change”2.Michael E. Porter “Competitive Advantage”3.Grosse and Kyjawa “International Business”4.Kotler and Armstrong “Principles of Marketing”5.http://www.banyantree.com/6.http://knowledge.insead.edu/banyantree.cfm7.http://www.answers.com/topic/the-ritz-carlton-hotel-company-l-l-c8.http://www.fourseasons.com/about_us/about_us_10.html9.http://www.brandchannel.com/careers_profile.asp?cr_id=52 “Ho Kwon Ping rooted in romance”, Adeline Chong, January 31, 200510.http://www.ireland.com/newspaper/property/2007/0517/index.html “Investing in luxury villas in Puket” Laura Kevany, Kate Walsh11.http://www.economywatch.com/business-and-economy/tourism-industry.htm

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