Museum hotel : business plan for a boutique hotel in Romania. Creating affordable differentiation through attractive service attributes and territorial marketing

Abstract

" Competition in the hospitality industry is fierce, with many hotels falling in the trap of offering the lowest common denominator in terms of offerings. Tourists have a hard time choosing between various accommodation options, often relying on just four dimensions to make a purchase decision: price (which is often used as a proxy for quality), number of stars, location and customer reviews. This creates a set of problems: 1) Hotels incur high costs because of investment in indifferent or basic attributes required to meet the star system certification, instead of focusing on differentiating through attractive attributes. 2) Tourists use the standardized star system and the price as a proxy for quality, which often results in disappointment. 3) Location, in its broader sense, although a major criterion in the buying decision, is not exploited enough by hotels to create differentiation. The paper attempts to offer a framework for addressing these problems, by proving that hotels can attract profitable market segments if they focus on two strategies: 1) Increasing revenue per available room (RevPAR) by differentiating through exceptional attributes, and divesting into indifferent attributes that just generate costs. 2) Generate demand through affordable, targeted marketing campaigns that leverage the untapped assets of a place. The paper has the format of a business plan, with an empirical part that applies several market research methods (Kano model, price sensitivity research, customer interviews, service design principles) in the context of a boutique hotel in Bucharest, Romania. The author plans to open Museum Hotel, a small-scale independent hotel offering a great learning experience and Romanian authenticity combined with exceptional personalized service to young, independent travelers who are visiting the city, and prefer to be immersed into unique travel experiences rather than the standardized service of an international chain. The hotel will be a lifestyle business generating a steady net profit of approximately EUR100,000 per year. Future research should explore opportunities to scale the business, either as a franchise or a fully-owned, fully-managed national chain."