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Table of Content I. INTRODUCTION II. DEVELOPMENT & ANALYSIS: 1-ENVIRONMENT ANALYSIS Economic: Social: Demographic: Political Technological Ecological: 2-ENVIRONMENT ANALYSIS: Threats to new entrants Bargaining power of suppliers Bargaining power of buyers Threat to substitute products Rivalr...

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Table of Content

I. INTRODUCTION

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II. DEVELOPMENT & ANALYSIS: 1.MACRO-ENVIRONMENT ANALYSIS Economic: Social: Demographic: Political Technological Ecological: 2.MACRO-ENVIRONMENT ANALYSIS: Threats to new entrants Bargaining power of suppliers Bargaining power of buyers Threat to substitute products

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Rivalry among existing competitors III. RECOMMENDATION:

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IV. CONCLUSION:

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V.REFERENCES:

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I. INTRODUCTION: According to The World Tourism Organization (UNWTO) (as cited in Kobina & Kate 2014), tourism and hospitality are considered as an ever-growing socio-economic evolution by creating job opportunities, generating revenues, and infrastructure and business advancement. There is no denying that tourism and hospitality are becoming the world’s largest leading service sector (Molia, Gil-Saura & Velazquez 2014). Das (2018) stated that the Vietnam tourism and hospitality sector has seen a remarkable increase in revenue with VND 620 trillion in 2018, noticeably, Vietnam was also recognized to be Asian’s Leading Destination. There are plenty of renowned high-end hotel brands embarking on the Vietnam hotel market namely Four Seasons, Hilton’s DoubleTree, and Oakwood over the last three years (Vietnam News 2018), creating a furious contention in the hotel's industry, particularly for Vietnam hotel businesses. Strategy for tourism and hospitality can be determined by the internal and external factors directly affecting the competitiveness to accomplish its longterm goals (Rios & Ciobanu 2019).

To demonstrate the report better, in an actual case in Vietnam, the Hotel Majestic Saigon will be profoundly analyzed based on both macro and micro-environment levels to evaluate their performance. And then proposing several in which evaluate their performance to approach the future strategic plan. About Hotel Majestic Saigon: Majestic Saigon is a luxurious five-star hotel, which was launched in 1925 by an affluent Chinese entrepreneur - Mr. Hui Bon Hoa. It is located in District 1 right at the prime position in Ho Chi Minh city. Besides, Majestic Saigon design was inspired by classic French Colonial architecture, and it is also famous for its hospitality, grace, and heritage (Hotel Majestic Saigon n.d.).

II. DEVELOPMENT & ANALYSIS: 1. MACRO-ENVIRONMENT ANALYSIS Macro-environment comprises external elements that the organization is not able to control, but it is necessary to organize them to be more effective. STEEL analysis is a framework, which is applied to evaluate the six key factors of economy, political, ecological, technological, and social of the entire organization’s performance (Maura, Kristeen & Thomas 2018).

Economic: According to Trading Economics (n.d.), Vietnam saw a significant increase in terms of total GDP with US$261.92 Billion in 2019, expanding 6.8 percent (Appendix 1). Regarding the tourism sector, the revenue achieved US$31billion during the same period, which becomes a key driver of Vietnam’s economic growth (Nhandan 2019). There are positive figures that contribute to generating over 1.6 million job opportunities, following the Ministry of Labor, Invalids, and Social Affairs report (Le 2019). However, Binh (2020) addressed that Vietnam’s GDP growth has considerably plunged to 0.8 percent in 2020 from the tourism and manufacturing sectors due to the crisis COVID-19 pandemic. Besides, the tourism sector occupies approximately 7% of Vietnam’s GDP,

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however, the number of international tourist arrivals is in decline 70 percent versus the actual contribution due to the crisis COVID-19 pandemic, according to the Vietnam National Administration of Tourism (Nguyen 2020). Hence, the impact of COVID-19 has caused losses for Vietnam’s economy and tourism and hospitality opportunities.

Social: Vietnam is undergoing an accelerated demographic and social change. Vietnam’s population has reached over 96 million people in 2019, which is ranked the 15th most populous nation in the world. Besides, the speed of urbanization across the country has contributed to expanding the population in rural and urban areas (Nhandan 2019).

Specifically, the rapid growth of the young adult population (between 20-44) (Appendix 2) that helps to increase the amount of labor workforce as well as boosting labor productivity in Vietnam, especially in the hospitality sector (Vietnamnews 2019). However, according to the Municipal Department of Tourism, amongst 28,000 people who are hotel employees in Ho Chi Minh city, 19,587 of them were left off whilst 830 were fired over the pandemic. Hence, Vietnam’s tourism and hospitality sector is suffering from severe global disease.

Political As reported in the Vietnam National Administration of Tourism (2020), in the early year 2011, The Prime Minister launched a master plan called “Strategy on Vietnam’s tourism development until 2020, vision to 2030”, which specified tourism to become a dominant economic activity for Vietnam. The strategy is concentrating on infrastructure enhancement, professional training, diversification of tourism’s products and services with exclusive traditional cultural specificity. Furthermore, Prime Minister Nguyen Xuan Phuc notified that the program of promoting international investment is going to be prolonged to interest foreign direct investment (FDI). The decision will assist Vietnam in accomplishing multiple socio-economic objectives growth (Vietnamnews 2018). Hence, it is an opportunity for Vietnam to take advantage of its competence to optimize the challenges to cooperate with foreign investors.

Technological It is no doubt that technological advancement has become an integral component of the world evolution that brings potential values to businesses ( Nigel, Kenneth & Vijay 2004). Make use of technological development, the world industry will have an opportunity to grasp the modern digital era that not only boosts the processes more effectively but also minimize the production cost by replacing expensive human-labor. VieAnd

also, fulfilling customer’s demands, superior quality management, efficient marketing plans for the hospitality sector (Law and Jogaratnam 2005 & Piccoli 2008, as cited in Anil, Fevzi, Nusair & David 2011). Tomislav, Ljubica & Mislav (2014) reported that mobile technology is currently an indispensable element in modern business. It has turned into a go-to-tools which supports distributing products and services at the right position on time in supply chain management in the hospitality sector. Mobile technologies and mobile applications also help to keep track of the flow of service in all hotel departments more effectively (Lightwell 2013, as cited in Tomislav, Ljubica & Mislav 2014). Online check-in/check-out application is applied as a modern e-business technology for hotels that assists the guest in time-saving (Shehata, G & Montash, M 2019).

Ecological: Vietnam has granted marvelous natural landscapes, charming beaches, splendid highland along with ancient historical sites that are recognized as a top tourist destination. However, Vietnam is encountering several environmental hindrances ranging from water wasted, air pollution to deforestation. Quy (2019) indicated that Vietnam is ranked 4th in the number of pollution-related deaths, 50,232 people were killed by air pollution, and water contamination killed 3,097 people in 2017 (Figure 2). It will hinder Vietnam from becoming an environmentally friendly tourist destination.

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2. MACRO-ENVIRONMENT ANALYSIS: Macro environment is made up of external factors that the business is able to manipulate affecting the organization’s performance, strategy, and decision making (Maura, Kristeen & Thomas 2018). Porter’s five forces framework (figure 4) is an analysis model that utilizes to examine the power of competition and profitability in an industry (Michael 2012).

Threats to new entrants

The threats of new entrants in Vietnam’s hotel market will expect high capital. As mentioned in Viet Nam News (2017), Vietnam is evaluated as one of the potential countries to attract the world's leading investment in the hotel market. The hotel Majestic Saigon is well-known not only for its luxury hotel brand but also for its classic French colonial design in central Saigon since 1925 (Majestic Saigon n.d.) The median occupancy rate of four and five-star hotels took up a lion’share at 61.5% and 62.7% correspondingly in 2015. Anh (2019) noticed that owing to the high prices for the actual estate in Ho Chi Minh city, there will be limited supply and the increasing orders. Thus, the new hotel business should consider carefully entering this market because there are always difficulties and high competitors.

Bargaining power of suppliers There are plenty of reputable distributors such as Viet Nghi, Hotel Equipment Trading & Service, Q industry, and Bao Gia Bao Foodservice Products, etc. They provide superior quality equipment and amenities for hotels and restaurants in Saigon (Yellow Pages n.d.). Likewise, there are also many popular food and beverage distributors for hotels delivering premium standards of foods. Majestic is a deluxe hotel, and there would be a substantial number of potential suppliers for the hotel to take into consideration. Thus, the level of supplier power is low.

Bargaining power of buyers 18 million foreign tourists are visiting Vietnam in 2019 that leads to an increase in lodging demands, especially four-five star hotels (Pham 2017). According to TripAdvisor (n.d.), the room price of Majestic ranges from VND 1,500,000 to VND 4,500,000 excepted President

and Suit rooms. This price is considered lower than the other 5-stars hotels in Saigon, and it is suitable for all visitors with medium to high income. Thus, the level of bargaining power of buyers is low.

Threat to substitute products The substitute products can be unique and various in different hotels to differentiate themselves from the competitors. The idea of rooftop bars has become a fascinating trend in most hotels in Saigon, specifically in Majestic owing to its lively ambiance and impressive view appealing to more outside guests. However, the idea can be a hindrance from the style and design regarding the substitute of roof bars from other five star hotels. The hotel will not confront a threat of substitutes, yet it can be a competition of distinction (Fabio, Francesco, Pietro & Massiomo 2017). Hence, the threat of substitute products of Majestic is low.

Rivalry among existing competitors It is the most crucial element in Porter’s five forces model. There are several other deluxe and well-known hotels such as Intercontinental, Pullman Saigon, Park Hyatt (TripAdvisor n.d.) Due to superior service quality, high level of brand awareness and reputation, and customer loyalty, those businesses are intense competitors with Majestic for many years. Besides, there are some new others with up-to-date designs and facilities which will be potential in the market. One or more competitors would affect the financial gain of the Majestic Hotel that leads to the reduction of goods and services costs. Thus, the level of rivalry among existing competitors is high in the hotel market.

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III.

RECOMMENDATION:

Concerning the macro-environment, the Majestic hotel must have strict measures in terms of waste management and waste disposal to avoid water contamination to preserve the ecoenvironment (Kirk 1995). The most important thing is to organize a disinfectant hand sanitizer, check the body temperature, and mask requirements when the guests come in and out of the hotel. Moreover, restricting crowds such as opening events, bright buffets, bars cannot exceed 30 people. Thus, it will prevent the infection of COVID to ensure optimal safety for people. Regarding the micro-environment, the threat of new entrants and existing competitors are high. Majestic Hotel must modernize and upgrade its facilities and properties so that the hotel is always in the process of renovation to welcome domestic and foreign tourists. Likewise, It is extremely crucial to train the staff to be more professional and ethical. The Manager has to ensure that the employee has their occupational skills as well as a polite attitude to serve customers. By doing so, it not only increases the value of the hotel but also increases guest satisfaction.

IV.

CONCLUSION:

Indeed, micro and macro environments both affect the business performance and the strategy of an entire hotel. For that, the Majestic should carefully consider the impact on which devise the most effective management strategies to be more successful. Hotel refurbishment and environmental solutions are two recommendations that promote the hotel’s life cycle to significantly extend as well as protecting the sustainability of the environment.

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V.

REFERENCES:

Anh, B 2020, ‘It’s true Covid-19 hurts Vietnam economy, but how can it benefit in long term?’, Hanoi Times, viewed 25 July 2020,

Anh, H 2019, ‘Real estate in Ho Chi Minh City CBD: Optimism fr long-term’, Vietnam Investment Review, viewed 27 July 2020,

Anil, B, Fevzi, O, Nusair, K & David, K 2011, ‘Information technology applications and competitive advantage in hotel companies’, Journal of Hospitality and Tourism Technology, Vol. 2, Iss. 2, p.139-153, viewed 27 July 2020, ProQuest database. Hotel Majestic Saigon n.d., Our Hotel, Hotel Majestic Saigon, viewed 28 July 2020,

Diem, L 2019, ‘Over 1.6 million new jobs created in 2019’, Vietnam Economic Times, viewed 25 July 2020,

Fabio, I, Francesco, T, Pietro, L & Massimo, B 2014, ‘Greening competitiveness for hotels and restaurants, Journal of Small Business and Enterprise Development, Vol. 24, Iss. 3, p. 607-628, viewed 31 July 2020, ProQuest database. Karik, D 1995, ‘Environmental management in hotels’, International Journal of Contemporary Hospitality Management, Vol. 7, Iss. 6, viewed 1 August 2020, emerald insight database.

Kobina, A & Kate, N 2014, ‘Factors used by Ghanaian students in determining career options in the tourism and hospitality industry: Lessons for developing countries’, Worldwide Hospitality and Tourism Themes, Vol. 6, Iss. 2, p. 166-178, viewed 28 July 2020, ProQuest database.

Mahat, M 2019, ‘The competitive forces that shape Australian medical education: An industry analysis using Porter’s five forces framework’, International Journal of Education Management, Vol. 33, Iss. 5, viewed 27 July 2020, emerald insight database. Maura, S, Kristeen, G & Thomas, G 2018, ‘Strategic talent management’, Worldwide Hospitality and Tourism Themes, Vol. 10, Iss. 1, p. 28-41, viewed 27 July 2020, ProQuest database. Molia, M, Gil-Saura, I & Velazquez, B 2014, ‘Good environment practices for hospitality and tourism: The role of information and communication technologies’, Management of Environmental Quality, Vol. 21, Iss. 4, 28 July 2020, emerald insight database. Nhan Dan Online, Vietnam’s population reaches over 96.2 million, ranking 15th in the world: 2019 census, Nhan Dan Online, viewed 25 July 2020,

Nhan Dan Online, Vietnam strives to earn VND700 trillion from tourism in 2019, Nhan Dan Online, viewed 25 July 2020,

Nguyen, D 2020, ‘Hospitality industry unlikely to recover until next year’, VN Express, viewed 25 July 2020,

Nigel, M, Kenneth, K & Vijay, G 2004, ‘REVIEW: INFORMATION TECHNOLOGY AND ORGANIZATION PERFORMANCE: AN INTEGRATIVE MODEL OF IT BUSINESS VALUE1’, Vol. 28, Iss. 2, p. 283-322, viewed 27 July 2020, ProQuest database. Nhan Dan Online, Vietnam strives to earn VND700 trillion from tourism in 2019, Nhan Dan Online, viewed 25 July 2020,

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Pham, C 2017, ‘Vietnam’s Hospitality Industry: Understanding Current Trends and Challenges’, Vietnam Briefing, viewed 29 July 2020,

Population Pyramid n.d., Vietnam Population Pyramid image, viewed 27 July 2020,

Quy, N 2019, ‘Pollution kills over 71,300 in Vietnam in a year’, VN Express, viewed 25 July 2020,

Rios, C & Ciobanu, T 2019, ‘Hospitality innovation strategies: An Analysis of success factors and challenges’, Tourism Management, Vol. 70, p. 218-229, viewed 28 July 2020, ScienceDirect database. Shehata, G & Montash, M 2019, ‘ Driving the internet and e-business technologies to generate a competitive advantage in emerging markets: Evidence from Egypt’, Information Technology & People, Vol. 33, Issue 2, viewed 27 July 2020, emerald insight database. Tuoi Tre News, Over 20,000 hospitality employees furloughed, laid off in Ho Chi Minh City over COVID-19, Tuoi Tre News, viewed 25 July 2020,

TripAdvisor n.d., 5-stars Hotels in Ho Chi Minh City, TripAdvisor, viewed 1 August 2020,

Trading Economics, Vietnam GDP, Trading Economics, viewed 25 July 2020,

Tomislav, Ljubica & Mislav 2014, ‘MOBILE TECHNOLOGIES AND SUPPLY CHAIN MANAGEMENT - LESSONS FOR THE HOSPITALITY INDUSTRY’, Tourism & Hospitality Management, Vol. 22, Iss. 2, p. 207-219, viewed 28 July 2020, ProQuest database. Viet Nam News 2019, Raising labour productivity is the key in development, Viet Nam News, viewed 25 July 2020,

Viet Nam News 2018, VN supports foreign investor, Viet Nam News, viewed 27 July 2020,

Viet Nam News 2018, Viet Nam: promising market for hospitality firms, Viet Nam News, viewed 27 July 2020,

Vn Express 2019, Top 10 nations with the highest pollution death image, viewed 28 July 2020,

Yellow Pages n.d., Hotel And Restaurant Equipment And Supplies in Ho Chi Minh City, Vietnam, Yellow Pages, viewed 29 July 2020,

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VI.

APPENDIX:

Appendix 1: Vietnam’s GDP. Adapted from Trading Economics (n.d.)

Appendix 2: Top 10 nations with the highest pollution death. Adapted from Vnexpress (2019).

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Appendix 3: Vietnam’s population Pyramid 2019. Adapted from Population Pyramid (n.d.)...