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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
2
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
3
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)
4
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 world’s 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 country’s 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 nation’s 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
5
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.
6
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 Malaysia’s capital city, Kuala Lumpur.
Location of Business 1, Apollo Inn:
Location of Business 2, Grid 9 Hotel:
7
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:
8
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
9
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.
10
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
11
STANDARD DOUBLE ROOM
Couples who want a cheaper alternative
may choose this non-windowed room.
It has an en-suite bathroom and a
double bed.
Price: RM 100 per night
STANDARD TWIN ROOM
Friends on a holiday may stay in this
room. It is non-windowed but provides
convenient safe-boxes and electrical
sockets.
Price: RM 90 per night
DORMITORY
An exceptional alternative is available
for the budget-conscious, a bed in a
dormitory of 6 beds which are located at
the mezzanine floor. This choice is
suitable for backpackers.
Price: RM 50 per night
A lift is provided for customers to move themselves from the lobby to other floors.
However, no lift is provided for customers of the dormitory. The dormitory is connected
to the lobby via a short flight of stairs.
12
As Apollo Inn is built on a very small strip of land, the rooms and stairs in the hotel are
designed to be narrow in order to save space and maximizing customer amount. The
architect of the hotel used a Japanese approach to design spaces in the hotel by
maximizing the use of limited space.
Facilities in Apollo Inn
Other facilities were provided in the hotel for the convenience of customers.
Lockers for customers to
keep their personal
belongings.
A water dispenser that
provides clean drinking
water
Refrigerator that stores
canned drinks
13
Apollo Inn is also known for its visually-appealing interior decoration.
A vertical abstract masterpiece by
local artist Ismadi
Installation of an overhanging
lamp
Light decorations at the lobby
14
Apollo Inn has a unique feature, a rooftop garden. Couples can enjoy the scenery of
Georgetown and spend their time with a romantic getaway here.
As Apollo Inn earned huge amounts of
profit despite its short history, they
opened their first branch, Chulia
Mansion in December 2013. This 3-
star hotel is located 200 m away in
Lebuh Chulia. Also, the founders made
plans to move their focus of income to
this new hotel.
Chulia Mansion also has a rooftop
garden. The picture on the right
shows the view from the garden at
night.
Comfortable sitting areas are
provided at the garden
The rooftop garden illuminated by
lights at night
15
Business 2: GRID 9 HOTEL
Current location: No. 9, Jalan Maharajalela, 50150 Kuala Lumpur Number of branches: 2
Number of employees: 18 (9 locals, 9 foreigners)
Main service: Accommodation, Food & Beverage, Art Gallery
Number of rooms: 51
Room types: Flying Solo, Standard, Broski, The LMG Crib, La Familia, Single Pods, Super
Pods
Estimated current number of customers: Full - 140
Peak season - 120
Average per day - 85
Opening Date: February 2007
Expenditure per day: RM 2750
Annual Revenue Figure: RM 1.2 million
Recent Development:
April 2009 - The global economic recession and H1N1 Influenza outbreak decreased
the number of customers, causing severe profit loss.
January 2013 - As net profit of the hotel gradually increased, plans to open new
branches in Puchong and Bukit Bintang were made.
July 2013 - Flight MH 17 was shot down, number of foreign customers decrease
tremendously. Plans to open new branches were delayed.
16
Grid 9 Hotel was founded in June 2007 by 1 main developer and 3 shareholders, who
were close friends. Back then when the key founders were studying in Australia, they
got the idea of opening a budget hotel for flashpackers (affluent backpackers) after
observing the abundance of these sort of budget hotels overseas. As Malaysia launched
the ‘Visit Malaysia 2007’ tourism campaign, the founders thought of it as an opportunity
and opened Grid 9 Hotel that year. The hotel was built by renovating abandoned shop
houses.
The hotel is just right next of
Maharajalela Monorail station,
which links with many major parts
of Kuala Lumpur. Due to its
strategic location near a vital
transportation and Chinatown, the
hotel is very convenient for
tourists.
The hotel is named ‘Grid 9’ as the
founders had a concept of adding
interactive spaces to connect backpackers
all around the world, just like a grid which
has lines linking one another. This idea
was revolutionary back then as it made
the hotel different from other
mainstream hotels, which became the
hotel’s main selling point.
Up to 85% of the customers of
Grid 9 Hotel are foreigners. The
photo to the left shows a
Western tourist trying out the
hotel facilities.
17
Rooms provided by Grid 9 Hotel
There is a variety of rooms provided to customers. The rooms were given unusual
names, making unique impressions to customers.
FLYING SOLO
This room provides a comfortable single
bed, which suits solo travellers. Perfect
for the lone ranger!
Price: RM 79 per night
THE STANDARD
A queen size bed for two is equipped in
this room, making it suitable for
lovebirds on a holiday. According to an
employee, the hotel founders almost
named the room ‘The Scandal’, but
changed their decision later on.
Price: RM 89 per night
BROSKI
Friends who travel in pairs can book the
‘Broski’. As the name suggests, this type
of room is for ‘bros’. It has twin beds and
an en-suite bathroom.
Price: RM 89 per night
18
THE L.M.G CRIB
Named after the initials of one of the
founders who paid for naming rights.
The L.M.G Crib is a more luxurious
choice. It is furnished either with a King
size bed or the option of twin beds.
Price: RM 129 per night
LA FAMILIA
As the name reckons, La Familia is a
room suitable for travelling families.
Customers can enjoy a wide space with
beds accommodated for a whole family
in this room.
Price: RM 159 per night
SINGLE PODS
This private pod provides a single bed,
adjustable privacy light and personal locker
space. There is a total of 6 pods in a
dormitory.
A lift connected to all 5 floors is provided. One main stairway connects the first floor to
the second floor. Customers can use a staircase that connects all floors in case of an
emergency.
19
The plan layout of Grid 9 Hotel is square with
4 interconnecting hallways of equal length.
Hence, the hallways in a floor are all linked in
a continuous loop, making it easier for
customers to navigate and locate themselves
in the floors.
Facilities in Grid 9 Hotel
The lounge is equipped with a long study
table. Customers can place their laptops
here and enjoy free Wi-Fi.
LCD televisions provide entertainment
and news to customers when they are in
the hotel.
20
Grid 9 Hotel has a modern and contemporary interior design, which suits the taste of
young people.
Light bulbs hanging above the bar table. Lightings
like these are in-trend nowadays.
The interior walls of the rooms had
a uniform theme. They used
intersecting lines with shades of
the same colour.
The design of spaces in Grid 9 Hotel never fails to
awe and inspire visitors.
21
In order to attract customers to Grid 9 Hotel, the founders implemented a one of a kind
concept and added unique features. The hotel serves as a mix of an art gallery,
interactive social space, ‘gastropub’ (combination of pub and restaurant) and
accommodation area.
The first floor of the hotel serves as
a ‘gastropub’ where backpackers
can enjoy a delicious meal, drink
beer or sip a cup of coffee.
A variety of beverages are served
at the bar. The hotel becomes
crowded on weekends as people
come here to have a drink.
Aside from having a lobby, the
lounge functions as an interactive
space where customers from all
around the world can sit down,
relax and interact with others.
Exchanging experiences and ideas
can be wonderful.
22
Customers can play games
in the second floor. A
variety of board games and
a pool table is provided.
The hotel even had its own art gallery
– Galeri Chandan. The purpose of the
gallery is to enhance the local art
industry. Artworks of local artists are
displayed here for free but in return,
the hotel needs to promote their
valuable masterpieces.
Grid 9 Hotel had a lot of corporate
partners. The hotel helps them to
advertise their brands. It is one of the
strategies for the hotel to earn extra
funds.
23
COMPARATIVE ANALYSIS OF COMPETITIVE TRAITS
Business 1: APOLLO INN
As Apollo Inn is established in Georgetown, a popular tourist destination, it encounters
severe competition with many other hotels. This is due to the fact that many businesses
realized the opportunity to earn profit in this area due to high demand for hotels. 26
hotels are present within its 2 km radius. Perfect competition occurs as no small group
of hotels had the power to manipulate the accommodation prices. To compete with
other hotels, each hotel offered accommodation with the lowest price possible.
The top 3 competitors of Apollo Inn are New
Asia Hotel, Kimberley House and New Rope
Walk. They are all within walking distance
from Apollo Inn.
24
COMPETITOR 1 : NEW ASIA HOTEL
This hotel is located at a corner lot, which
faces a bustling road junction, making it
very noticeable by tourists as a potential
accommodation place. It might seem old
and worn-down on the outside, but the
rooms are actually clean and spacious.
Price of cheapest single room: RM 105 per
night
COMPETITOR 2: KIMBERLEY HOUSE
One of the strongest competitors of
Apollo Inn. It attracts customers with its
vintage-style exterior design. The prices of
the rooms are cheaper than those in
Apollo Inn.
Price of cheapest single room: RM 64 per
night
COMPETITOR 3: NEW ROPE WALK HOTEL
Just 100 metres away from Apollo Inn, this
hotel offers spacious rooms with Wi-Fi
service. It is also located right next to a
few restaurants and a taxi stand. The
rooms are cheaper than Apollo Inn, but
are very basic and lack visually-appealing
design.
Price of cheapest single room: RM 69 per
night.
Although Apollo Inn is located in a less noticeable location and offered a slightly higher
price compared to most of its competitors, it still attracts many customers every day
due to its comfortable design, beautiful ambience and warm hospitality.
25
Strategies Employed By Apollo Inn to Compete With Competitors
A few strategies were employed by Apollo Inn to attract customers.
A free half-day tour is organized for customers to
participate. Most of Apollo Inn’s competitors do not
provide this service, thus giving Apollo Inn an
advantage.
The ratings by customers in travelling
websites such as Expedia and Agoda
are displayed at the walkway,
attracting customers to the hotel as it
showed high credibility.
All customers of Apollo Inn are
cordially invited to enjoy a free
dinner at night. The dinner events
are held at their sister hotel, Chulia
Mansion’s rooftop garden. Both
Apollo Inn and Chulia Mansion are
the only hotels in Penang that
provide a rooftop garden dining
experience.
26
Business 2: GRID 9 HOTEL
Grid 9 Hotel is established in the middle of the bustling city of Kuala Lumpur. As many
tourists and businessmen flock into this city from all corners of the world, there is a high
demand for accommodation spaces. Thus, hotels are literally everywhere. There are 52
hotels within a 2 km radius from Grid 9 Hotel, resulting in severe perfect competition.
Under perfect competition, customers have a vast variety of choices to choose from,
making the hotels competing against one another for profit.
The three main competitors of Grid 9
Hotel are Midah Hotel, Mandarin
Court Hotel and i-Hotel. They are all
located along Jalan Maharajalela, a
major motorway.
27
COMPETITOR 1: i-HOTEL
This is yet another budget hotel competing with Grid 9. It
is located between a Chinese restaurant and a 7-eleven
store, thus making it extremely convenient for travellers.
Also, it has a spacious environment and a rooftop patio for
relaxation.
Price for cheapest single room: RM74 per night.
COMPETITOR 2: MANDARIN COURT HOTEL
Mandarin Court is a business hotel that is housed
within the tallest hotel at Jalan Maharajalela. Due
to its height, this hotel grants a good window-view
for its customers. Also, it provides several facilities
such as conference rooms, ballrooms and a
restaurant.
Price for cheapest single room: RM 120
COMPETITOR 3: MIDAH HOTEL
Between the other hotels mentioned, Midah Hotel
is not located beside the highway, thus obtaining
the advantage of tranquillity and cleaner air. It is
also a tall building, giving customers a better view.
It acquires two restaurants as well as massage and
spa services.
Price of cheapest single room: RM 120
Despite the fact that Grid 9 Hotel had less facilities compared to its competitors, it has
successfully received good feedback from most of their customers due to its excellent
service. Also, its unique approach in designing spaces within the hotel attracts many
customers.
28
Strategies Employed By Grid 9 Hotel to Compete With Competitors
To attract customers, Grid 9 had a few strategies.
Within Grid 9 Hotel, it has an
avant-garde modern interior
design that left their customers a
good impression. Aside from
backpackers, businessmen conduct
meetings here, which indirectly
promotes the hotel to many big
names.
Grid 9 Hotel adds multiple
functions to available space. It
does not just function as a
budget hotel, it also serves as an
art gallery, pub and restaurant.
This makes the hotel special as
hotels with such concepts are
rare. The vibrant activities
attract customers to the hotel,
making it successful and
competitive.
Equipped with various facilities,
the lounge enhances the
experience of customers. Thus,
customer satisfaction is
guaranteed. Hotels with
interactive spaces for customers
to socialize was a revolutionary
concept. This makes the lounge a
major selling point to attract
customers.
29
Comparison between Apollo Inn and Grid 9 Hotel
MAIN CONTRASTS
MAJORITY OF CUSTOMERS Locals Foreigners
SURROUNDINGS Alley/Streets Roads/Highways
LOCATION Less noticeable Clearly seen
CONVIENIENCE OF
TRANSPORTATION
None Monorail
CORPORATE PARTNERS None 6
PRESENCE OF OUTDOOR
SPACES
Rooftop Garden None
SECONDARY FUNCTIONS None Art Gallery, Pub, Restaurant
DIFFERENCES OF PROVISIONS
RECEPTION Certain hours 24-hour
LEISURE PROVISION Rooftop Garden Pool Table, Board Games,
Television
NUMBER OF ROOMS 20 51
PRICES OF ROOMS Changes on weekends Fixed prices
EXTRA EARNINGS None In-house restaurant
DECORATION Constant Changes seasonally
PRESENCE OF LOUNGES None Present
LOCATION OF LOBBY Ground floor First Floor
SIMILARITIES
DESIGNS OF HOTEL Modern contemporary design
LOCATED AREA Tourism hotspot
TARGET CUSTOMERS Budget travellers/ Backpackers
MOTIVES Provide quality accommodation for budget travellers
NATURE OF MARKET Perfectly competitive
RATINGS Excellent internet reviews
CLEANLINESS Good
30
Conclusion of Analysis
Grid 9 is more commercially successful.
Despite the fact that they provide less facilities compared to neighbouring hotels33999, they still
promote their hotel very well by advertising its main selling point, which is the unique concept
of combining elements of a budget hotel, interactive spaces, a restaurant, a pub and an art
gallery. The design and theme of the decorations and displayed artworks change seasonally,
making the interior spaces more dynamic. Moreover, they tried to improve their services by
having no delays in booking procedures and providing a 24-hour help-desk. They are thoughtful
of their customers, by providing leisure provisions and an in-house restaurant. Furthermore,
they are sensitive to customer feedback and from that being able to continuously improve their
hotel. Also, transportation is more convenient for customers of this hotel as there is a monorail
station right next to the hotel. Besides that, they are more honest with their business by giving
reasonable and fixed prices. Hence, it is not surprising that they possess a better rating
compared to surrounding hotels and is highly recommended by travellers.
31
OBSTACLES FACED BY NEW BUSSINESSES
OBSTACLES DETAILS
Lack of capital to start business Starting a new budget hotel requires a
huge sum of money and does not
guarantee profit. Therefore, it is difficult
to find businessmen who could locate an
institution which is willing to lend money.
This means that new alternatives to get
money have to be explored. If
businessmen use their own savings, they
might need to go through several years of
hardship.
Competitors everywhere Hotels are abundant in Malaysia,
especially in tourism hotspots. Hence,
hoteliers will have a hard time competing
with other hotels for customers. To tackle
this problem, a hotel must possess
unique features to make it stand out from
competitors around it.
Difficulty in getting license from the
government
As budget hotels are mushrooming in
every corner of the country and a number
of them were not successful, the
Malaysian government intended to
restrict opening new budget hotels and
encourage more homestay programs,
which is less profitable for investors due
to the smaller amount of customers
handled. Also, the requirements for
getting a budget hotel license nowadays
are tougher than before.
Usage of space in available land Budget hotels must be creative in
maximizing the number of customers and
functional space in a limited amount of
land, but still make the ambience of the
hotel as comfortable as possible.
These obstacles faced by new budget hotel businesses are difficult to overcome as they
require a lot of sacrifice from businessmen who are running them.
32
RECOMMENDATIONS
Business 1: APOLLO INN
Although Apollo Inn is small in size, it is clean and comfortable. It has sufficient rooms,
facilities and services. However, there are still many places for improvement.
CURRENT AREA OF IMPROVEMENT RECOMMENDATION
Not active in promoting its hotel Issue more brochures about the hotel and
distribute it the public to increase
publicity.
No computers with internet are provided Install computers in the lobby to make it
easier for customers to search for travel
information online.
Difficulties in transportation for
customers
Apollo Inn should provide taxi-calling
services for customers. As the hotel is
situated beside a narrow alley, taxis are
rare in that area. The hotel should also
provide bicycle rental services for
customers. As most of the other hotels do
not provide this service, this will give
Apollo Inn an upper hand.
Parking ticket is required for customers
who park their vehicles in the alley, yet
instructions on where to buy the tickets
are unclear.
Sell the parking coupon at the hotel’s
counter. A signboard should be placed to
inform drivers about the parking ticket
requirement. As most of their customers
are not from Penang, they do not know
where to buy the parking ticket and were
fined for it.
33
Business 2: GRID 9 HOTEL
We found that Grid 9 Hotel has good service standards. Customers are given ample
facilities. Nevertheless, there are several suggestions for Grid 9 Hotel.
CURRENT AREA OF IMPROVEMENT RECOMMENDATION
The flat rooftop of this hotel is not
accessible to customers and has plenty of
space available for development.
Develop this rooftop to become a rooftop
garden to make it lively. It can also serve
as a place where customers can relax
themselves. Grid 9 Hotel can organize
events here during festive seasons to
attract customers.
Customers need travel guide service in
Kuala Lumpur.
Provide Kuala Lumpur tour service for
their customers as some of them want to
understand more about the city. This can
be a new selling point of this hotel as the
hotels nearby do not provide this service.
The food and beverages sold in the
gastropub are too expensive.
Grid 9 Hotel should sell cheaper food and
beverages as an alternative. If the food
and drinks are more affordable, more
customers will come.
No free breakfast provided for
customers.
Some customers might wake up very early
for breakfast but most restaurants nearby
the hotel may not open yet. Therefore, it
will be very inconvenient for customers.
Free breakfast can act as a way of
attracting customers as some customers
have a patronage towards hotels that do
so.
34
BIBLIOGRAPHY
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John Wiley.
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Thomson.
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http://library.bcu.ac.uk/learner/writingguides/1.02%20Reports.htm
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35
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http://www.malaysia-travel-guide.com/kuala-lumpur.html
9. Grid 9 Hotel. (n.d.). Retrieved from http://www.grid9hotels.com/
10. Apollo Inn Hotel. (n.d.). Retrieved from http://www.apolloinn.com.my/
36
APPENDICES
Appendix 1. Survey Questionnaire and Results
Date: 27th December 2014
Time: 10.00am
Location: Apollo Inn, Georgetowb
Interviewed Person: Mr. Alan Yeoh
Job Position: Manager
Office Phone Number: +60(4) 261 6388
E-mail Address: alanyeoh@apolloinn.com.my
1. When was the business started?
November 2009
2. Why is the hotel given the name “Apollo Inn”?
No reason, it’s just a good name.
3. Who are the key founders?
There is quite a number of them, they are all under a partnership.
4. What is the motive of starting this business?
To earn money.
5. How many rooms are provided in this hotel?
20 rooms and 6 dormitories
37
6. What is the estimated current number of customers?
There are around 48 customers.
7. What are the number of branches and employees?
Currently, there are only two branches and we have six employees. We plan to open a
third branch too.
8. How much is the rough expenditure per day?
RM1500
9. How much is the rough annual revenue figure?
RM1million.
10. What is the percentage of the hotel that must be booked per day to cover one day’s
expenses?
50%.
11. When is the peak season?
Penang is a popular tourist destination, so the peak season is all year long.
12. Can you please tell us the brief history and recent development of Apollo Inn?
Since the opening of Apollo Inn, there are no major events. Income comes in steadily.
However, after the incidents of MH370 and MH17, the number of customers decreased.
13. Where do most of the customers come from?
Before the incident of MH370, most of the customers are from China. Most of the
customers now are locals.
38
14. Preferred method of booking by customer.
Most of them preferred online booking.
15. Are there a lot of competitors? Who are the top 3 competitors?
There are a lot, there are over 200 plus budget hotels over here. The top 3 competitors
are New Asia Hotel, New Rope Walk Hotel, and Kimberley House.
16. What are the strategies to compete with them?
Service is very vital. Hence, we provide free breakfast, free tours and Christmas buffet
night.
17. What are the obstacles faced by new businesses who wish to enter the market
today? Are they hard to overcome?
Nowadays, the government is very strict on budget hotel license because they prefer
homestay hotels. It is something hard to overcome.
18. Are there any specialized field of knowledge needed to run this business?
Marketing skills, being observant of what the market needs.
39
Date : 10th January 2015
Time : 1.30pm
Location : Grid 9 Hotel, Jalan Maharajalela, Kuala Lumpur.
Interviewed Person : Mr. Owen Lim
Job Position : General Manager
Office Phone Number : +603 9226 2629
E-mail Address : owen.grid9hotels@gmail.com
owen@grid9hotels.com
1. When was the business started?
The business started in February 2007.
2. Why is the hotel given the name Grid 9?
Connecting one another, gathering backpackers from different countries.
3. Who are the key founders?
The founders are three close friends who studied overseas. Inspired by foreign budget
hotels, they decided to open a hotel for flashpackers.
4. What is the motive of starting this business?
To earn money, as a passion and meeting new people.
5. How many rooms are provided in this hotel?
51 rooms and dormitories.
7. What are the number of branches and employees?
There is only one branch, two more are coming up at Puchong and Bukit Bintang. We
have about 15 to 18 employees.
40
8. How much is the rough expenditure per day?
55% of the RM5000 gross profit, which is RM2750.
9. How much is the rough annual revenue figure?
RM1.2 million.
10. What is the percentage of the hotel that must be booked per day to cover one day’s
expenses?
50%.
11. When is the peak season?
December.
12.Can you please tell us the brief history and recent development of Grid 9?
The economic recession in 2009 and the recent MH incidents affected our income
tremendously.
13. Where do most of the customers come from?
Most of them are from Western countries.
14. What is the preferred method of booking by customers?
Online travel agents such as Agoda and Expedia.
15. Are there a lot of competitors? Who are the top 3 competitors?
The hotel is literally surrounded by other hotels. I-Hotel, Midah Hotel, and Mandarin
Court. Competition is tight as they offer almost the same price.
41
16. What are the strategies to compete with them?
Our facilities can’t compete with other hotels since our land is limited, so we will do well
for customer satisfaction.
17. What are the obstacles faced by new businesses who wish to enter the market
today? Are they hard to overcome?
Capital to start a new business is hard to get as we need a large amount of capital to
start. It is very tough to overcome.
18. Are there any specialized field of knowledge needed to run this business?
One needs to be observant of details, and be able to visualize and forecast trends.
42
Appendix 2. Minutes of Group Meetings
English 2 Final Project Meeting 1
Date : 18 Dec 2014
Times : 5.50p.m. To 6.20p.m.
Venue : Lecture Theater 15
Attendance : Lim Joe Onn (Chairman)
Koh Sung Jie (Secretary)
Victor Heng
Lee Kai Yung
Ong Seng Peng
Chong Ke Qun
No Agenda Actions Person in
Charge
Deadline
1 Hotels Selection
Within Klang Valley : Grid 9
Hotel, Klang.
Out of Klang Valley : Apollo
Inn, Penang.
Approval of interview has to
be made by booking
interviews through phone
calls.
Phone numbers of both
hotels have to be obtained.
Joe 23rd Dec
19th Dec
2a Assigning of Tasks
Before and during the trip
to Penang, each of us
Timetable allocator Kai Yung 25th Dec
43
should have specific tasks. Questionnaire preparation
Videographer
Photographer
Interviewer
Driver
Joe
Victor
Everyone
Joe
Victor
26th - 28th
Dec
2b Some of the tasks for the
report had been assigned.
Minutes of meeting
Artistic cover
Presentation Slides
Content
Recommendations for
improvements
Sung Jie
Victor
Jeff (Ong)
Joe
Everyone
Throughou
t the
project
3 Penang Trip Duties
At Penang, we have to
carry out research, analysis
and observation about the
specified hotel.
Analyse the hotel’s
surroundings and take
photos.
Take as many photos as you
can.
Everyone 26th - 28th
Dec
44
Collect brochures and
appendixes.
4 Others
Reminder : Deadline of
Project is 15th January 2015
and other overlapping
deadlines from other
modules.
Reminder : Maximum 3000
words. Do not overdo.
Planning of date for Grid9
Hotel not yet determined.
Next meeting not
determined yet.
Efficient Planning. Everyone
45
English 2 Final Project Meeting 2
Date : 7 Jan 2015
Time : 6.50p.m. to 7.03p.m.
Venue : Lecture Theater 15
Attendance : Lim Joe Onn (Chairman)
Koh Sung Jie (Secretary)
Victor Heng
Lee Kai Yung
Ong Seng Peng
Chong Ke Qun
No Agenda Actions Person In
Charge
Deadline
1a List of work to be
finished
Artistic Cover
Content page
Analysis of competitors
and strategies of Apollo
Inn
Descriptions and details of
Grid 9
Comparison of analysis of
Victor
Joe
Victor
Joe
Joe
11th Jan
9th Jan
11th Jan
46
both hotels
Recommendations of
improvements for both
hotels
Bibliography
Appendices
Jeff
Kai Yung
Kai Yung
1b List of work to be
finished
References
Video editing and subtitles
Presentation slides
CD
Script
100 word summary
Kai Yung
Jeff & Joe
Ke Qun
Jeff
Everyone
Joe
Joe
11th Jan
47
Appendix 3. Print Screens
Website of Apollo Inn, Link : http://www.apolloinn.com.my/
Website of Grid 9 Hotel, Link : http://www.grid9hotels.com/
48
Appendix 4. Business Cards
Alan Yeoh, Manager of Apollo Inn
Appendix 5: Handwritten Notes Taken During Interviews
Owen Lim, General Manager of Grid9 Hotel

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English Report.pdf

  • 1. 1 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
  • 2. 2 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
  • 3. 3 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)
  • 4. 4 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 world’s 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 country’s 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 nation’s 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
  • 5. 5 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.
  • 6. 6 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 Malaysia’s capital city, Kuala Lumpur. Location of Business 1, Apollo Inn: Location of Business 2, Grid 9 Hotel:
  • 7. 7 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:
  • 8. 8 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
  • 9. 9 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.
  • 10. 10 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
  • 11. 11 STANDARD DOUBLE ROOM Couples who want a cheaper alternative may choose this non-windowed room. It has an en-suite bathroom and a double bed. Price: RM 100 per night STANDARD TWIN ROOM Friends on a holiday may stay in this room. It is non-windowed but provides convenient safe-boxes and electrical sockets. Price: RM 90 per night DORMITORY An exceptional alternative is available for the budget-conscious, a bed in a dormitory of 6 beds which are located at the mezzanine floor. This choice is suitable for backpackers. Price: RM 50 per night A lift is provided for customers to move themselves from the lobby to other floors. However, no lift is provided for customers of the dormitory. The dormitory is connected to the lobby via a short flight of stairs.
  • 12. 12 As Apollo Inn is built on a very small strip of land, the rooms and stairs in the hotel are designed to be narrow in order to save space and maximizing customer amount. The architect of the hotel used a Japanese approach to design spaces in the hotel by maximizing the use of limited space. Facilities in Apollo Inn Other facilities were provided in the hotel for the convenience of customers. Lockers for customers to keep their personal belongings. A water dispenser that provides clean drinking water Refrigerator that stores canned drinks
  • 13. 13 Apollo Inn is also known for its visually-appealing interior decoration. A vertical abstract masterpiece by local artist Ismadi Installation of an overhanging lamp Light decorations at the lobby
  • 14. 14 Apollo Inn has a unique feature, a rooftop garden. Couples can enjoy the scenery of Georgetown and spend their time with a romantic getaway here. As Apollo Inn earned huge amounts of profit despite its short history, they opened their first branch, Chulia Mansion in December 2013. This 3- star hotel is located 200 m away in Lebuh Chulia. Also, the founders made plans to move their focus of income to this new hotel. Chulia Mansion also has a rooftop garden. The picture on the right shows the view from the garden at night. Comfortable sitting areas are provided at the garden The rooftop garden illuminated by lights at night
  • 15. 15 Business 2: GRID 9 HOTEL Current location: No. 9, Jalan Maharajalela, 50150 Kuala Lumpur Number of branches: 2 Number of employees: 18 (9 locals, 9 foreigners) Main service: Accommodation, Food & Beverage, Art Gallery Number of rooms: 51 Room types: Flying Solo, Standard, Broski, The LMG Crib, La Familia, Single Pods, Super Pods Estimated current number of customers: Full - 140 Peak season - 120 Average per day - 85 Opening Date: February 2007 Expenditure per day: RM 2750 Annual Revenue Figure: RM 1.2 million Recent Development: April 2009 - The global economic recession and H1N1 Influenza outbreak decreased the number of customers, causing severe profit loss. January 2013 - As net profit of the hotel gradually increased, plans to open new branches in Puchong and Bukit Bintang were made. July 2013 - Flight MH 17 was shot down, number of foreign customers decrease tremendously. Plans to open new branches were delayed.
  • 16. 16 Grid 9 Hotel was founded in June 2007 by 1 main developer and 3 shareholders, who were close friends. Back then when the key founders were studying in Australia, they got the idea of opening a budget hotel for flashpackers (affluent backpackers) after observing the abundance of these sort of budget hotels overseas. As Malaysia launched the ‘Visit Malaysia 2007’ tourism campaign, the founders thought of it as an opportunity and opened Grid 9 Hotel that year. The hotel was built by renovating abandoned shop houses. The hotel is just right next of Maharajalela Monorail station, which links with many major parts of Kuala Lumpur. Due to its strategic location near a vital transportation and Chinatown, the hotel is very convenient for tourists. The hotel is named ‘Grid 9’ as the founders had a concept of adding interactive spaces to connect backpackers all around the world, just like a grid which has lines linking one another. This idea was revolutionary back then as it made the hotel different from other mainstream hotels, which became the hotel’s main selling point. Up to 85% of the customers of Grid 9 Hotel are foreigners. The photo to the left shows a Western tourist trying out the hotel facilities.
  • 17. 17 Rooms provided by Grid 9 Hotel There is a variety of rooms provided to customers. The rooms were given unusual names, making unique impressions to customers. FLYING SOLO This room provides a comfortable single bed, which suits solo travellers. Perfect for the lone ranger! Price: RM 79 per night THE STANDARD A queen size bed for two is equipped in this room, making it suitable for lovebirds on a holiday. According to an employee, the hotel founders almost named the room ‘The Scandal’, but changed their decision later on. Price: RM 89 per night BROSKI Friends who travel in pairs can book the ‘Broski’. As the name suggests, this type of room is for ‘bros’. It has twin beds and an en-suite bathroom. Price: RM 89 per night
  • 18. 18 THE L.M.G CRIB Named after the initials of one of the founders who paid for naming rights. The L.M.G Crib is a more luxurious choice. It is furnished either with a King size bed or the option of twin beds. Price: RM 129 per night LA FAMILIA As the name reckons, La Familia is a room suitable for travelling families. Customers can enjoy a wide space with beds accommodated for a whole family in this room. Price: RM 159 per night SINGLE PODS This private pod provides a single bed, adjustable privacy light and personal locker space. There is a total of 6 pods in a dormitory. A lift connected to all 5 floors is provided. One main stairway connects the first floor to the second floor. Customers can use a staircase that connects all floors in case of an emergency.
  • 19. 19 The plan layout of Grid 9 Hotel is square with 4 interconnecting hallways of equal length. Hence, the hallways in a floor are all linked in a continuous loop, making it easier for customers to navigate and locate themselves in the floors. Facilities in Grid 9 Hotel The lounge is equipped with a long study table. Customers can place their laptops here and enjoy free Wi-Fi. LCD televisions provide entertainment and news to customers when they are in the hotel.
  • 20. 20 Grid 9 Hotel has a modern and contemporary interior design, which suits the taste of young people. Light bulbs hanging above the bar table. Lightings like these are in-trend nowadays. The interior walls of the rooms had a uniform theme. They used intersecting lines with shades of the same colour. The design of spaces in Grid 9 Hotel never fails to awe and inspire visitors.
  • 21. 21 In order to attract customers to Grid 9 Hotel, the founders implemented a one of a kind concept and added unique features. The hotel serves as a mix of an art gallery, interactive social space, ‘gastropub’ (combination of pub and restaurant) and accommodation area. The first floor of the hotel serves as a ‘gastropub’ where backpackers can enjoy a delicious meal, drink beer or sip a cup of coffee. A variety of beverages are served at the bar. The hotel becomes crowded on weekends as people come here to have a drink. Aside from having a lobby, the lounge functions as an interactive space where customers from all around the world can sit down, relax and interact with others. Exchanging experiences and ideas can be wonderful.
  • 22. 22 Customers can play games in the second floor. A variety of board games and a pool table is provided. The hotel even had its own art gallery – Galeri Chandan. The purpose of the gallery is to enhance the local art industry. Artworks of local artists are displayed here for free but in return, the hotel needs to promote their valuable masterpieces. Grid 9 Hotel had a lot of corporate partners. The hotel helps them to advertise their brands. It is one of the strategies for the hotel to earn extra funds.
  • 23. 23 COMPARATIVE ANALYSIS OF COMPETITIVE TRAITS Business 1: APOLLO INN As Apollo Inn is established in Georgetown, a popular tourist destination, it encounters severe competition with many other hotels. This is due to the fact that many businesses realized the opportunity to earn profit in this area due to high demand for hotels. 26 hotels are present within its 2 km radius. Perfect competition occurs as no small group of hotels had the power to manipulate the accommodation prices. To compete with other hotels, each hotel offered accommodation with the lowest price possible. The top 3 competitors of Apollo Inn are New Asia Hotel, Kimberley House and New Rope Walk. They are all within walking distance from Apollo Inn.
  • 24. 24 COMPETITOR 1 : NEW ASIA HOTEL This hotel is located at a corner lot, which faces a bustling road junction, making it very noticeable by tourists as a potential accommodation place. It might seem old and worn-down on the outside, but the rooms are actually clean and spacious. Price of cheapest single room: RM 105 per night COMPETITOR 2: KIMBERLEY HOUSE One of the strongest competitors of Apollo Inn. It attracts customers with its vintage-style exterior design. The prices of the rooms are cheaper than those in Apollo Inn. Price of cheapest single room: RM 64 per night COMPETITOR 3: NEW ROPE WALK HOTEL Just 100 metres away from Apollo Inn, this hotel offers spacious rooms with Wi-Fi service. It is also located right next to a few restaurants and a taxi stand. The rooms are cheaper than Apollo Inn, but are very basic and lack visually-appealing design. Price of cheapest single room: RM 69 per night. Although Apollo Inn is located in a less noticeable location and offered a slightly higher price compared to most of its competitors, it still attracts many customers every day due to its comfortable design, beautiful ambience and warm hospitality.
  • 25. 25 Strategies Employed By Apollo Inn to Compete With Competitors A few strategies were employed by Apollo Inn to attract customers. A free half-day tour is organized for customers to participate. Most of Apollo Inn’s competitors do not provide this service, thus giving Apollo Inn an advantage. The ratings by customers in travelling websites such as Expedia and Agoda are displayed at the walkway, attracting customers to the hotel as it showed high credibility. All customers of Apollo Inn are cordially invited to enjoy a free dinner at night. The dinner events are held at their sister hotel, Chulia Mansion’s rooftop garden. Both Apollo Inn and Chulia Mansion are the only hotels in Penang that provide a rooftop garden dining experience.
  • 26. 26 Business 2: GRID 9 HOTEL Grid 9 Hotel is established in the middle of the bustling city of Kuala Lumpur. As many tourists and businessmen flock into this city from all corners of the world, there is a high demand for accommodation spaces. Thus, hotels are literally everywhere. There are 52 hotels within a 2 km radius from Grid 9 Hotel, resulting in severe perfect competition. Under perfect competition, customers have a vast variety of choices to choose from, making the hotels competing against one another for profit. The three main competitors of Grid 9 Hotel are Midah Hotel, Mandarin Court Hotel and i-Hotel. They are all located along Jalan Maharajalela, a major motorway.
  • 27. 27 COMPETITOR 1: i-HOTEL This is yet another budget hotel competing with Grid 9. It is located between a Chinese restaurant and a 7-eleven store, thus making it extremely convenient for travellers. Also, it has a spacious environment and a rooftop patio for relaxation. Price for cheapest single room: RM74 per night. COMPETITOR 2: MANDARIN COURT HOTEL Mandarin Court is a business hotel that is housed within the tallest hotel at Jalan Maharajalela. Due to its height, this hotel grants a good window-view for its customers. Also, it provides several facilities such as conference rooms, ballrooms and a restaurant. Price for cheapest single room: RM 120 COMPETITOR 3: MIDAH HOTEL Between the other hotels mentioned, Midah Hotel is not located beside the highway, thus obtaining the advantage of tranquillity and cleaner air. It is also a tall building, giving customers a better view. It acquires two restaurants as well as massage and spa services. Price of cheapest single room: RM 120 Despite the fact that Grid 9 Hotel had less facilities compared to its competitors, it has successfully received good feedback from most of their customers due to its excellent service. Also, its unique approach in designing spaces within the hotel attracts many customers.
  • 28. 28 Strategies Employed By Grid 9 Hotel to Compete With Competitors To attract customers, Grid 9 had a few strategies. Within Grid 9 Hotel, it has an avant-garde modern interior design that left their customers a good impression. Aside from backpackers, businessmen conduct meetings here, which indirectly promotes the hotel to many big names. Grid 9 Hotel adds multiple functions to available space. It does not just function as a budget hotel, it also serves as an art gallery, pub and restaurant. This makes the hotel special as hotels with such concepts are rare. The vibrant activities attract customers to the hotel, making it successful and competitive. Equipped with various facilities, the lounge enhances the experience of customers. Thus, customer satisfaction is guaranteed. Hotels with interactive spaces for customers to socialize was a revolutionary concept. This makes the lounge a major selling point to attract customers.
  • 29. 29 Comparison between Apollo Inn and Grid 9 Hotel MAIN CONTRASTS MAJORITY OF CUSTOMERS Locals Foreigners SURROUNDINGS Alley/Streets Roads/Highways LOCATION Less noticeable Clearly seen CONVIENIENCE OF TRANSPORTATION None Monorail CORPORATE PARTNERS None 6 PRESENCE OF OUTDOOR SPACES Rooftop Garden None SECONDARY FUNCTIONS None Art Gallery, Pub, Restaurant DIFFERENCES OF PROVISIONS RECEPTION Certain hours 24-hour LEISURE PROVISION Rooftop Garden Pool Table, Board Games, Television NUMBER OF ROOMS 20 51 PRICES OF ROOMS Changes on weekends Fixed prices EXTRA EARNINGS None In-house restaurant DECORATION Constant Changes seasonally PRESENCE OF LOUNGES None Present LOCATION OF LOBBY Ground floor First Floor SIMILARITIES DESIGNS OF HOTEL Modern contemporary design LOCATED AREA Tourism hotspot TARGET CUSTOMERS Budget travellers/ Backpackers MOTIVES Provide quality accommodation for budget travellers NATURE OF MARKET Perfectly competitive RATINGS Excellent internet reviews CLEANLINESS Good
  • 30. 30 Conclusion of Analysis Grid 9 is more commercially successful. Despite the fact that they provide less facilities compared to neighbouring hotels33999, they still promote their hotel very well by advertising its main selling point, which is the unique concept of combining elements of a budget hotel, interactive spaces, a restaurant, a pub and an art gallery. The design and theme of the decorations and displayed artworks change seasonally, making the interior spaces more dynamic. Moreover, they tried to improve their services by having no delays in booking procedures and providing a 24-hour help-desk. They are thoughtful of their customers, by providing leisure provisions and an in-house restaurant. Furthermore, they are sensitive to customer feedback and from that being able to continuously improve their hotel. Also, transportation is more convenient for customers of this hotel as there is a monorail station right next to the hotel. Besides that, they are more honest with their business by giving reasonable and fixed prices. Hence, it is not surprising that they possess a better rating compared to surrounding hotels and is highly recommended by travellers.
  • 31. 31 OBSTACLES FACED BY NEW BUSSINESSES OBSTACLES DETAILS Lack of capital to start business Starting a new budget hotel requires a huge sum of money and does not guarantee profit. Therefore, it is difficult to find businessmen who could locate an institution which is willing to lend money. This means that new alternatives to get money have to be explored. If businessmen use their own savings, they might need to go through several years of hardship. Competitors everywhere Hotels are abundant in Malaysia, especially in tourism hotspots. Hence, hoteliers will have a hard time competing with other hotels for customers. To tackle this problem, a hotel must possess unique features to make it stand out from competitors around it. Difficulty in getting license from the government As budget hotels are mushrooming in every corner of the country and a number of them were not successful, the Malaysian government intended to restrict opening new budget hotels and encourage more homestay programs, which is less profitable for investors due to the smaller amount of customers handled. Also, the requirements for getting a budget hotel license nowadays are tougher than before. Usage of space in available land Budget hotels must be creative in maximizing the number of customers and functional space in a limited amount of land, but still make the ambience of the hotel as comfortable as possible. These obstacles faced by new budget hotel businesses are difficult to overcome as they require a lot of sacrifice from businessmen who are running them.
  • 32. 32 RECOMMENDATIONS Business 1: APOLLO INN Although Apollo Inn is small in size, it is clean and comfortable. It has sufficient rooms, facilities and services. However, there are still many places for improvement. CURRENT AREA OF IMPROVEMENT RECOMMENDATION Not active in promoting its hotel Issue more brochures about the hotel and distribute it the public to increase publicity. No computers with internet are provided Install computers in the lobby to make it easier for customers to search for travel information online. Difficulties in transportation for customers Apollo Inn should provide taxi-calling services for customers. As the hotel is situated beside a narrow alley, taxis are rare in that area. The hotel should also provide bicycle rental services for customers. As most of the other hotels do not provide this service, this will give Apollo Inn an upper hand. Parking ticket is required for customers who park their vehicles in the alley, yet instructions on where to buy the tickets are unclear. Sell the parking coupon at the hotel’s counter. A signboard should be placed to inform drivers about the parking ticket requirement. As most of their customers are not from Penang, they do not know where to buy the parking ticket and were fined for it.
  • 33. 33 Business 2: GRID 9 HOTEL We found that Grid 9 Hotel has good service standards. Customers are given ample facilities. Nevertheless, there are several suggestions for Grid 9 Hotel. CURRENT AREA OF IMPROVEMENT RECOMMENDATION The flat rooftop of this hotel is not accessible to customers and has plenty of space available for development. Develop this rooftop to become a rooftop garden to make it lively. It can also serve as a place where customers can relax themselves. Grid 9 Hotel can organize events here during festive seasons to attract customers. Customers need travel guide service in Kuala Lumpur. Provide Kuala Lumpur tour service for their customers as some of them want to understand more about the city. This can be a new selling point of this hotel as the hotels nearby do not provide this service. The food and beverages sold in the gastropub are too expensive. Grid 9 Hotel should sell cheaper food and beverages as an alternative. If the food and drinks are more affordable, more customers will come. No free breakfast provided for customers. Some customers might wake up very early for breakfast but most restaurants nearby the hotel may not open yet. Therefore, it will be very inconvenient for customers. Free breakfast can act as a way of attracting customers as some customers have a patronage towards hotels that do so.
  • 34. 34 BIBLIOGRAPHY 1. Rutherford, D. G. (Ed.). (2002). Hotel Management and Operation. New York, N.Y. : John Wiley. 2. Jones, A., & Lockwood, A. (2002). The Management of Hotel Operations. London : Thomson. 3. Study Guides : Writing, How to write a Report. (2011) Retrieved from http://library.bcu.ac.uk/learner/writingguides/1.02%20Reports.htm 4. Academic Skills. (n.d.). Report Writing. Retrieved from http://www.canberra.edu.au/studyskills/writing/reports
  • 35. 35 REFERENCES 1. National Tourism Plan 2004-2010 Main Report, 2004. Ministery of Tourism, Malaysia. 2. Humphrey, D., & Conklin, R. (2005). Connections: Writing For Your World. Mason, Ohio: Thomson / South-Western. 3. Khosravi, S., Malek, A., & Ekiz, E. (2014). Why Tourists are Attracted to Boutique Hotels: Case of Penang Island, Malaysia. Journal of Hospitality & Tourism. 12(1), 23- 30. 4. Carmel & Lara. (2012). Guidance on Case Report Writing. Occupational Health. 64(2), 27-30. 5. Mey, L. P., Akbar, K., & Fie, Y. G. (2006). Measuring Service Quality and Customer Satisfaction oh the Hotel in Malaysia. Journal of Hospitality and Tourism Management. 13(2). 144-160. 6. O.Lim (personal communication, December 27, 2014) 7. A.Yeoh (Personal Communication, January 10, 2015) 8. Malaysia Travel Guide, Kuala Lumpur have you been there yet? Retrieved from http://www.malaysia-travel-guide.com/kuala-lumpur.html 9. Grid 9 Hotel. (n.d.). Retrieved from http://www.grid9hotels.com/ 10. Apollo Inn Hotel. (n.d.). Retrieved from http://www.apolloinn.com.my/
  • 36. 36 APPENDICES Appendix 1. Survey Questionnaire and Results Date: 27th December 2014 Time: 10.00am Location: Apollo Inn, Georgetowb Interviewed Person: Mr. Alan Yeoh Job Position: Manager Office Phone Number: +60(4) 261 6388 E-mail Address: alanyeoh@apolloinn.com.my 1. When was the business started? November 2009 2. Why is the hotel given the name “Apollo Inn”? No reason, it’s just a good name. 3. Who are the key founders? There is quite a number of them, they are all under a partnership. 4. What is the motive of starting this business? To earn money. 5. How many rooms are provided in this hotel? 20 rooms and 6 dormitories
  • 37. 37 6. What is the estimated current number of customers? There are around 48 customers. 7. What are the number of branches and employees? Currently, there are only two branches and we have six employees. We plan to open a third branch too. 8. How much is the rough expenditure per day? RM1500 9. How much is the rough annual revenue figure? RM1million. 10. What is the percentage of the hotel that must be booked per day to cover one day’s expenses? 50%. 11. When is the peak season? Penang is a popular tourist destination, so the peak season is all year long. 12. Can you please tell us the brief history and recent development of Apollo Inn? Since the opening of Apollo Inn, there are no major events. Income comes in steadily. However, after the incidents of MH370 and MH17, the number of customers decreased. 13. Where do most of the customers come from? Before the incident of MH370, most of the customers are from China. Most of the customers now are locals.
  • 38. 38 14. Preferred method of booking by customer. Most of them preferred online booking. 15. Are there a lot of competitors? Who are the top 3 competitors? There are a lot, there are over 200 plus budget hotels over here. The top 3 competitors are New Asia Hotel, New Rope Walk Hotel, and Kimberley House. 16. What are the strategies to compete with them? Service is very vital. Hence, we provide free breakfast, free tours and Christmas buffet night. 17. What are the obstacles faced by new businesses who wish to enter the market today? Are they hard to overcome? Nowadays, the government is very strict on budget hotel license because they prefer homestay hotels. It is something hard to overcome. 18. Are there any specialized field of knowledge needed to run this business? Marketing skills, being observant of what the market needs.
  • 39. 39 Date : 10th January 2015 Time : 1.30pm Location : Grid 9 Hotel, Jalan Maharajalela, Kuala Lumpur. Interviewed Person : Mr. Owen Lim Job Position : General Manager Office Phone Number : +603 9226 2629 E-mail Address : owen.grid9hotels@gmail.com owen@grid9hotels.com 1. When was the business started? The business started in February 2007. 2. Why is the hotel given the name Grid 9? Connecting one another, gathering backpackers from different countries. 3. Who are the key founders? The founders are three close friends who studied overseas. Inspired by foreign budget hotels, they decided to open a hotel for flashpackers. 4. What is the motive of starting this business? To earn money, as a passion and meeting new people. 5. How many rooms are provided in this hotel? 51 rooms and dormitories. 7. What are the number of branches and employees? There is only one branch, two more are coming up at Puchong and Bukit Bintang. We have about 15 to 18 employees.
  • 40. 40 8. How much is the rough expenditure per day? 55% of the RM5000 gross profit, which is RM2750. 9. How much is the rough annual revenue figure? RM1.2 million. 10. What is the percentage of the hotel that must be booked per day to cover one day’s expenses? 50%. 11. When is the peak season? December. 12.Can you please tell us the brief history and recent development of Grid 9? The economic recession in 2009 and the recent MH incidents affected our income tremendously. 13. Where do most of the customers come from? Most of them are from Western countries. 14. What is the preferred method of booking by customers? Online travel agents such as Agoda and Expedia. 15. Are there a lot of competitors? Who are the top 3 competitors? The hotel is literally surrounded by other hotels. I-Hotel, Midah Hotel, and Mandarin Court. Competition is tight as they offer almost the same price.
  • 41. 41 16. What are the strategies to compete with them? Our facilities can’t compete with other hotels since our land is limited, so we will do well for customer satisfaction. 17. What are the obstacles faced by new businesses who wish to enter the market today? Are they hard to overcome? Capital to start a new business is hard to get as we need a large amount of capital to start. It is very tough to overcome. 18. Are there any specialized field of knowledge needed to run this business? One needs to be observant of details, and be able to visualize and forecast trends.
  • 42. 42 Appendix 2. Minutes of Group Meetings English 2 Final Project Meeting 1 Date : 18 Dec 2014 Times : 5.50p.m. To 6.20p.m. Venue : Lecture Theater 15 Attendance : Lim Joe Onn (Chairman) Koh Sung Jie (Secretary) Victor Heng Lee Kai Yung Ong Seng Peng Chong Ke Qun No Agenda Actions Person in Charge Deadline 1 Hotels Selection Within Klang Valley : Grid 9 Hotel, Klang. Out of Klang Valley : Apollo Inn, Penang. Approval of interview has to be made by booking interviews through phone calls. Phone numbers of both hotels have to be obtained. Joe 23rd Dec 19th Dec 2a Assigning of Tasks Before and during the trip to Penang, each of us Timetable allocator Kai Yung 25th Dec
  • 43. 43 should have specific tasks. Questionnaire preparation Videographer Photographer Interviewer Driver Joe Victor Everyone Joe Victor 26th - 28th Dec 2b Some of the tasks for the report had been assigned. Minutes of meeting Artistic cover Presentation Slides Content Recommendations for improvements Sung Jie Victor Jeff (Ong) Joe Everyone Throughou t the project 3 Penang Trip Duties At Penang, we have to carry out research, analysis and observation about the specified hotel. Analyse the hotel’s surroundings and take photos. Take as many photos as you can. Everyone 26th - 28th Dec
  • 44. 44 Collect brochures and appendixes. 4 Others Reminder : Deadline of Project is 15th January 2015 and other overlapping deadlines from other modules. Reminder : Maximum 3000 words. Do not overdo. Planning of date for Grid9 Hotel not yet determined. Next meeting not determined yet. Efficient Planning. Everyone
  • 45. 45 English 2 Final Project Meeting 2 Date : 7 Jan 2015 Time : 6.50p.m. to 7.03p.m. Venue : Lecture Theater 15 Attendance : Lim Joe Onn (Chairman) Koh Sung Jie (Secretary) Victor Heng Lee Kai Yung Ong Seng Peng Chong Ke Qun No Agenda Actions Person In Charge Deadline 1a List of work to be finished Artistic Cover Content page Analysis of competitors and strategies of Apollo Inn Descriptions and details of Grid 9 Comparison of analysis of Victor Joe Victor Joe Joe 11th Jan 9th Jan 11th Jan
  • 46. 46 both hotels Recommendations of improvements for both hotels Bibliography Appendices Jeff Kai Yung Kai Yung 1b List of work to be finished References Video editing and subtitles Presentation slides CD Script 100 word summary Kai Yung Jeff & Joe Ke Qun Jeff Everyone Joe Joe 11th Jan
  • 47. 47 Appendix 3. Print Screens Website of Apollo Inn, Link : http://www.apolloinn.com.my/ Website of Grid 9 Hotel, Link : http://www.grid9hotels.com/
  • 48. 48 Appendix 4. Business Cards Alan Yeoh, Manager of Apollo Inn Appendix 5: Handwritten Notes Taken During Interviews Owen Lim, General Manager of Grid9 Hotel