Analysis of the Langham hotel expansion into dubai (Research Paper Sample)

A report for the analysis of the expansion of the Langham hotel into Dubai
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Introduction
The Langham hotel is a luxury hotel built in London from 1863 to 1865. At this time, it was the largest and the most luxurious hotel with one hundred water closets, thirty six bathrooms and the first hydraulic elevators in London (Langham Hotels 2009). Its opening was graced by His Royal Highness the Prince of Wales who later on ascended to the throne and became King Edward VII. The Langham hotel is now one of the leading names in the globe with a rapidly expanding portfolio. Taking after its rich history, the Langham hotel is committed to ingenuity, innovation and authentic hospitality. The astonishing values, technology and splendor set by the Langham hotel in the Victorian era has become a benchmark for hotels that came after it.
The Langham hotel is already respected for its extraordinary service worldwide, in Dubai; it will be able to keep up with the standards that have been set by the recently built luxury hotels. The Langham hotel will be able to offer unrivalled services at an affordable cost without compromising quality. As it is well known, quality is the Langham hotel’s middle name. The Langham hotel strives to offer every guest the feel of luxury painstakingly crafted over a period of 140 years. The staffs are trained to know the specific needs of guests without appearing garish; this poise is bound to bring memories to our guests after they are gone.
The Langham hotel will therefore target the discerning traveler who wants class without poking holes in his wallet. The hotel will have climate controlled rooms with a mega swimming pool for each floor. In addition to this, there will be a mega Jacuzzi for guests who want to unwind after a long journey. The target market will be the upper middle class and the lower upper class that are willing to appreciate superiority.
Reasons for expansion
The Langham hotel views overseas expansion as a major strategy to fulfill its quest for increased revenues, growth and increase the value of their shares. The hotel chain already has a steady presence around the world.

Conspicuously, the hotel has not yet tapped into the emerging market in Dubai. What makes Dubai so attractive is the huge pull of potential clients who have been left out by the existing five star hotels. This niche is composed of traders, travelers on transit to other countries and the local populace (World Trade and Tourism Council 2009). Britain has a large market with a population of 63,181,775 (UK Census, 2011). However, visitor numbers have been erratic for both international and local tourists (GB Tourism Survey 2013).



In 2012, Britain reported a 7 percent dip in tourist numbers, the first since 2001. Between 1997 and 2007, there was a 17.9 percent drop in international tourist numbers (GB Office for National Statistics 2012). The reason for this decline was the world economic recession of 2008 which particularly hit Britain hard. Britain therefore is a fading market for the hotel industry. Expanding overseas for the Langham hotel is inevitable, this is vital for it to remain afloat. Britain is an old market that the Langham hotel needs to get weaned-off, moving out will enable the hotel experience the environments of new markets (Bercovitz 2001). Britain has also been rated as the second worst performing country in the European Union. There has also been a sharp decline in local spending by British citizens; this peculiarity creates a bad environment for businesses like the Langham hotel (Amol 2009).
In addition to this, the hotel market in Britain is relatively crowded; it has also been invaded by second class hotels which offer low quality standards (Chekitan and Erramilli 2002). The British government has also not been supportive of the local businesses; this has been attributed to lack of marketing unlike other governments which have been very aggressive in their marketing campaigns. The Spanish government invested 345 million pounds whereas the Singaporean government splashed 25 million pounds into encouraging foreign visitors. The British government on the other hand has been reluctant in marketing Britain, its 50 million pound budget has been slashed by 18 percent, and this has been done oblivious of the benefits of marketing. The decline in the British hotel industry has also been attributed to the trend of going abroad for holidays in search of plentiful sunshine by British citizens. Dubai, being a popular destination for British tourists is a good location for the expansion of the Langham hotels.
Overview of Dubai
Dubai is an emirate located on the south of the Persian Gulf; it is among the seven emirates which make up the United Arab Emirates. It has a population of 2,106,177 which is the largest of all the emirates (CIA World Fact book 2009). Dubai has a land mass of 4,114 square kilometres which is the second largest in the U.A.E. Dubai is ruled by a sheikh but it falls under the jurisdiction of the United Arab Emirates. It was established in 1833 by Sheikh Maktoum Bin Butti Al-Maktoum.
Dubai is a cosmopolitan city and has experienced steady growth to become a global business and transport hub. Dubai’s economy was chiefly based on oil until its government adopted a western type economy and diversified it to include tourism, finance and real estate which have now become the key drivers of its economy. Dubai has recently been in the global spotlight for its ambitious infrastructure projects which include the world’s tallest building and manmade islands.
PESTLE analysis of Dubai
Political
Dubai practices a form of government where power is vested in the sheikhdom which is a hereditary position. Dubai is collectively governed by a president with the other emirates, individually; Dubai is governed by the Al Maktoum family of the Al Bu Falasah tribe. Generally, there is freedom of speech and movement in Dubai, political turmoil is unheard of. Dubai is one of the safest and politically stable countries in the world. Unlike neighboring countries which have experienced civil unrest and terrorism, the political climate of Dubai is relatively calm and peaceful. Arab nationalism is rising in Dubai but this is curtailed by the fact that the citizens favor further economic development. Existing radical Islamic organizations have sprung up but they are closely watched by the authorities. The government of Dubai has committed itself to providing a peaceful environment for holiday and work. The authorities in Dubai are known for their open door policy which is inclined towards expansion, utilizing this advantage will enable the Langham hotel access a thriving market devoid of the usual complicated government-investor interplay. This reduces chances of failure and losses while enhancing profits and increasing value of shares from the start.
Economic
Dubai has one of the most developed economies in the world. This can be seen in its GDP which is ranked fifth in the world. Dubai’s economy grew by 7.4% in 2007 and is projected to grow by 7.6% in 2014. Economic scheduling has been a major feature of the Dubai government; this can be seen in the formulation of the Dubai Strategic Plan 2007-2015. The government offers tax exemptions and favorable tax regimes. This makes it a strategic location for well paid tax exempted workers who all seek hotel accommodation (Ekeledo and Sivakumar 2004). As oil and tourism sectors continue to thrive, there is an increasing demand for accommodation services. Huge infrastructure projects are currently being undertaken in order to keep the standards at an acceptable international level. The projects that have been initiated are worth approximately 27 billion United States dollars. When Dubai’s market potential is measured against its market size, purchasing ability and GDP (Abbad and Bonet 2013), it presents a very fertile ground for expansion for the Langham hotels.
Social
Dubai has a population of slightly over 2 million inhabitants, 70 percent of this is male (Kumar 2011). Dubai is composed of a large expatriate community, around 80 percent of the total population.


Crime rate in Dubai is almost non-existent. The traditional mode of dressing is a full length shirt dress worn with a checked head covering secured with a black cord for men. Women wear the “Abaya” which is a loose dress opened from the front. Residents and tourists are not expected to conform to any dress code and are free to choose what to wear so long as it is not offensive to others. The official language is Arabic but English is used as a second language and is the primarily used language in business. Dubai has a meridian age of 27 years with a birth rate of 13 percent and a death rate of 1 percent. Islam is the official religion and the government heavily subsidizes mosques. All imams are on the government payroll. The rate of school going has increased considerably.

Technological
Dubai boasts of two seaports, three free zones of international merit, one industrial park, an international airport with a cargo village and an advanced infrastructural network.


The city has modern telecommunication facilities and an efficient and reliable electricity grid. In addition to this, Dubai is serviced by over 150 major shipping lanes and is connected to hundreds of global destinations through air travel.
Dubai has 71% internet penetration with 3% of web traffic looking for meaningful content while the rest is for social media (TNS Audience Research 2010).
Legal
Dubai practices civil law which borrows heavily from Islamic, French and Roman law. Common law principles are applied in commercial contracts this is mainly due to a rising number of companies from common law jurisdictions. Courts in Dubai apply federal laws as...