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The hospitality sector is one of the most rapidly growing industries all across the globe. The sector can be subdivided into a number of smaller sub sectors, namely restaurant, hotel and resorts. Being one of the largest service sectors that provide employment, this industry receives significant government support. Moreover the sector contributes significantly to the GDP of the nation and hence attracts prospective investors. It has been observed that the hotel industry is the most prominent among all the sub sectors of the hospitality industry.  Statistics reflect that this sub sector has experienced a massive growth in the recent years. However a keen observation of this industry reveals that this massive growth is only experienced by hotels that operate in chains. In addition, the high competition in this sector acts a major hindrance to the growth of this industry and restricts the entrance of new firms into this sector. Therefore, for hotels to succeed in the modern times, it is important for them to develop and implement appropriate marketing strategies. In this report, light will be shed on the business environment of The Hourglass Hotel, a company in the hospitality sector of London. The Hourglass Hotel is an organization in the service sector and the hospitality industry of the United Kingdom is chosen for the study as UK is a host to tourists and students all across the globe and therefore must be having a well-organized hospitality industry


The Hourglass hotel is family run hotel in London that offers services at reasonable rates. The hotel provides cheap accommodations along with free Wi-Fi (Hour Glass Hotel, London, UK, 2019). The strategic location of the hotel is reflected by the fact that the Kennington and Elephant & Castle tube stations are a fifteen minute walk from the Hotel(Hour Glass Hotel, 2019). Every room of the hotel is provided with TV, refrigerator, tea or coffee machines and basin. In addition, there are facilities of shared kitchen and bathroom that are provided with washer and dryer. Moreover, the hotel is situated very near to the bus stop and thus makes the centre of the city highly accessible. This study would emphasize on the business environment of the firm. This in turn would allow the company to develop and implement effective marketing strategies which would further serve to enhance its profit margins. 

Consumer behaviour analysis

The casual dining or hotel sub-sector of the hospitality industry of London is facing major challenges in the recent times that can be attributed to the increasing pressures from high labour costs and reduced profit margins. The increasing cost of food materials and high business rates further add to the challenges. Moreover the inflation in prices of the basic commodities, rising unemployment and the poor growth in salaries following Brexit has led to lowered confidence among consumers. In such a socio-economic crisis consumers prefer budget hotels that provide satisfactory services at affordable rates. In addition, with the advancements in science and increasing health awareness consumers prefer restaurants that offer healthy meal options at affordable rates (Williams, 2012). As more and more restaurants are emerging consumers tend to choose the ones that offer the finest dining experiences at the cheapest rates(Nunkooet al., 2013). Moreover, digital technology has now become an integral part of consumer life in all parts of the world. Therefore, the future restaurants need to device a framework where the restaurants would be able to incorporate the use of this technology among all its operational functions starting from food delivery to taking catering contracts (Singal, 2012). Social media platforms for instance would allow restaurants to connect better with the consumers and offer them with customisable menus at an affordable rate (Manhas and Tukamushaba, 2015). In such a business environment, The Hourglass Hotel, being a budget hotel attracts millions of consumers from all across the globe. Moreover, the hotel provides all the amenities a consumer looks for at an affordable rate (Hour Glass Hotel, London, UK, 2019). The restaurant is located very close to the bus stop and hence makes the city centre easily accessible to the consumers. 

Marketing mix analysis

Product analysis:

Budget hotel as the name suggests are small to medium sized hotels that have around 50 or more rooms. In addition, these hotels offer services at affordable prices, which attract a large number of consumers. Being a new product of the hospitality industry, consumers are keenly interested in having an experience at these hotels. Budget hotels are mostly known by the name of inns and lodges.  These hotels offer satisfactory services at an affordable price and thus provide value for money to the consumers. In the context of the recent financial crisis in UK, following Brexit, The Hourglass Hotel serves as an extremely attractive option for consumers looking for fine dining experiences or accommodation at a comparatively cheap rate (Manhas and Tukamushaba, 2015). Moreover, the hotel is well connected to the rest of the city and has a bus stop nearby, which makes it easier for the consumers to access the city centre. The restaurant of the hotel offers a variety of fine dining options to its consumers at low prices and hence is a choice of many tourists who visit London. In addition, the Victorian pub in the hotel retains antiques along with the original wooden frames, which acts a major tourist attraction. Thus with the adoption of appropriate marketing strategy this hotel would experience a rather rapid growth.

Pricing analysis:

Budget hotels emerged as a result of effective managerial strategies in the hospitality sector. In other words, budget hotels are a product of the hospitality industry that promises it extensive growth both in the domestic and international front. Since it is a new concept, consumers are slowly gaining interest in the same which further ensures its expansion and growth. The concept of budget hotels offers greater value to the consumers and provides more value for money. In the context of recent times, most of the tourists and travellers are significantly value-conscious. Therefore, budget hotels that use dynamic pricing strategies are the first choice of most consumers. Not only does this ensure that consumers are able to avail cheap accommodation, but can also have a fine dining experience at an affordable cost. The dynamic pricing strategy adopted by The Hourglass Hotel, allows it alter the prices of services offered to its consumers in accordance to the market demands. 

Promotion analysis:

Majority of consumers these days are in search for hotels that offer a seamless customer experience and not only accommodation and fine dining facilities. In order to attract a broad consumer base(Gallarzaet al., 2015)The Hourglass Hotel offers a readymade holiday packages for tourists and travellers. Since the hotel is located amidst the most famous pubs of London, the hotel offers vouchers, using which the consumers can avail free lunches or drinks at the nearby pubs. The hotel also has this ‘taste before eat’ facility, whereby the restaurant allows the consumers to taste food before they order the same. This allows the tourists to have the finest dining experiences while their visit to London. This facility is particularly fulfilling when the consumers are interested in tasting different kinds of wines. In addition, the hotel celebrates days like the St. Patricks day, or the queen’s birthday in addition to occasions like New Year’s Eve, Valentine’s Day and Christmas. This serves as an effective promotional strategy.  Moreover, the hotel provides gift hampers and special discounts on Mother’s day and Father’s day.  It is a well-known fact that loyalty programs are the best way to attract consumers. Loyalty programs rewards consumers and hence add customer value (Huang and Sarigöllü, 2014). The Hourglass hotel, focus on building healthy customer relationships by offering a free one night stay at the hotel to the consumers who book the hotel for a minimum of three nights. Most of the organizations, including hotels fail to recognise employees as an important stakeholder of the organization who can serve in its promotion. The Hourglass Hotel gives an equal importance on strengthening employee relationships and satisfied employees thereby promote the hotel mostly through word-of-mouth. Moreover, very similar to the satisfied consumers who promote an organization via the vicious consumer cycle; employees also promote the hourglass hotel by making use of social media platforms such as Facebook and twitter(Minazzi, 2015). Lastly during the peak seasons, consumers who book early, enjoy a significant discount and can avail fine dining experiences at offer prices. 

Place analysis: 

Small to medium sized commercial hotels more commonly referred to as budget hotels has been gaining significant importance in the recent times because of their ability to offer satisfactory services at affordable prices. The rapidly evolving market needs has led to a high demand for these hotels, especially following Brexit and the global recession of 2008. This is reflected by the increasing number of both domestic and international prospective investors wanting to invest in this sector. Modern consumers with changed views and perceptions have actually brightened up the future of budget hotels. However, the two main aspects that have glorified the concept of budget hotels is its strategic location along with the dynamic pricing strategy (Bowie et al., 2016). Most executives in these days choose budget hotels while they are on their business tours. This is because, these hotels are located in areas that are extremely well connected to the rest of the city. For instance the Hourglass hotel is located across a bus stop in London and hence the guests have an easy access to the centre of the city. Moreover, bookings can be made either through the official website of the hotel or with the help of travel agents. Such simplified booking facilities attract tourists from all across the globe(Wearneand Morrison, 2013). In the context of the Hourglass hotel, the Kennington and the Elephant & Castle tube stations is a 15 minute walk. In addition the Burgess Park is located nearby and provides and provides excellent recreational facilities for children. There are a number of age old restaurants and pubs nearby, along with the newly opened ones, which acts as major tourist attraction spots. London has a rich historical and cultural background, which is of major interest to tourists and archaeologists. This hotel is situated very close to Southwark and hence is an excellent choice for travellers who are interested in learning about culture and historical monuments of London. 

Segmentation, Targeting and positioning analysis

Segmentation analysis:In the words of Weinstein (2012), market segmentation can be defined as the idea of categorizing the wide consumer base into smaller sub-groups, each of which comprises of potential consumers. Since the process involves identifying the prospective consumers, it is applicable to all industries including the hospitality sector. Market segmentation involves dividing consumers based on their common needs, preferences, interests and demographics. Therefore market segmentation also involves developing a variety of strategies in order to appeal to each market segment in a well-defined manner. Following segmentation, an organization must select its target segments and thus develop itself in ways that would allow it to gain significant attention of the target consumers. The primary aim of this process is to identify the high profit generating target groups (Weinstein and Morritt, 2012). In the hospitality industry, business executive guests are the target segment chosen by many. However, budget hotels broaden their consumer base as they are able to target tourists who plan small budget tours in addition to businessmen. The hospitality industry can carry out market segmentation based on a variety of criteria; namely demographic, geographic, psychographic, behavioural and product related. Demographic criteria involve variables such as age, gender, occupation, income, family size and others. Budget hotels offer satisfactory services at affordable rates and hence attract consumers with lower incomes in addition to business executives. Moreover youngsters especially teenagers are particularly attracted to these hotels such as The Hourglass Hotel, for long holidays. Geographic criterion on the other hand includes variables such as weather, landscape and others. The Hourglass Hotel in London is particularly attractive to tourists from the East and oriental regions and for students who travel abroad for academic purposes. Psychographic criterion on the other hand involves understanding the lifestyle, perceptions, values and interests of the consumers. For instance, the Hourglass hotel tends to attract consumers who live a moderate lifestyle.  

Targeting analysis:Following the market segmentation the most profitable segments of the organization needs to be targeted using appropriate marketing strategies. The three most commonly used marketing strategies are differentiated marketing, undifferentiated marketing and concentrated marketing. In the context of recent times most organizations prefer differentiated marketing and concentrated marketing in order to appeal to the most profitable segment without involving significant investments (Line and Runyan, 2012). The Hourglass Hotel uses its promotional strategies such as offering free night stay on booking for at least three nights and offering fine dining experiences at discounted prices in order to appeal to its consumers(Tresidderand Hirst, 2012). Appropriate market targeting strategies enables organizations to gain competitive advantage over others and thus enhance its profit margins. Moreover, making appropriate use of digital technology is the key to success to modern businesses. Since the hourglass hotel, allows consumers to book the hotels via their official website they are capable attracting a large number of consumers. In addition, social media platforms allow the hourglass hotel to collect consumer feedback.

Positioning analysis:Modern day customers are constantly comparing one organization to another, in order to judge to which organization is better over other. In order to ensure high market position of the company, the organization must ensure offering high quality services to the consumers at affordable rates (Wang et al., 2012). In order to enhance its market position The Hourglass Hotel can focus of offering food from varied cuisines to the guests. In addition, they might also consider improving the entertainment facilities the hotel offers to its guests in order to improve its reputation among the consumers. In other words, adding consumer value by using appropriate marketing strategies enables an organization to reach greater heights. 


An extensive analysis of the Hourglass hotel reflects that a few parameters of the marketing mix need thorough revision. For instance, the company might consider improving on the products in the following ways:

The Hourglass Hotel might consider offering food from a variety of cuisines in order enhance the fine dining facilities for its guests

Entertainment and sports facilities of The Hourglass Hotel also needs a thorough revision 

Furthermore, the rapid advancements in digital technology all across the world imply that the hotel must also make appropriate use of the same, in order to sustain the high competition. For instance, the organization might consider promoting itself using social media platforms. 

It is well known that, Communication is an integral part of every business organization in all the sectors. Therefore, The Hourglass Hotelmight engage in effective communication with both the employees and the customers through social media channels, who would then serve to promote the hotel by word-of-mouth and the vicious consumer cycle. 

Moreover appropriate use of social media can help the hotels to gain customer feedback and thus improve on its existing services in order to best suit the consumer needs and preferences


This study dealt with the market analysis of The Hourglass Hotel, a budget hotel in London. The consumer behaviour was extensively analysed in order to assess the ever evolving demands of the consumers in the hospitality sector. This was followed by a thorough analysis of the marketing mix, which helped in understanding the ways in which each of the parameters of product, place, price and promotion can be improved in order to better appeal to the consumers. Finally the segmentation, targeting and positioning analysis has been conducted and recommendations have been given for further improvement of hotel services.


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