Positioning the hotel based in Nizhny Novgorod for the foreign tourists coming for FIFA World Cup in 2018 (based on the analysis of the value orientations)

Figure 16: Growth in Russian inbound/outbound and domestic travel flows (2013-2019) : (2015-2019 are forecasted) ( Euromonitor, 2016. )

The complex economic state, together with unexpected restrictions on travel to Turkey and Egypt in 2015, have driven an 30% growth in the need for local trips between 2014 and 2015 (Federal Agency for Tourism of the Russian Federation, 2016). The increasing number of domestic trips compensated the lack of foreign tourists in this period and had a positive impact on the movement of occupancy rates of hotels in Russia in the short term. However it is quite unlikely that this tendency can hold up also in the long term.

According to expert, the hospitality market of Russia can expect the following scenarious in the nearest perspective:

Ш That is ridiculous, but at the same time with a huge growth in the number of hotels in Russia, the quality of the rooms and services remains on the same level. As long as the hoteliers refuse to get to know and follow the international standards, the number of tourists who reject to stay in the hotel during their stay in Russia will also remain.

Ш According to the Association of Tour Operators of Russia (2016), hotels located on the Black Sea have already sshowed an 30% growth in prices in 2016. Even a slight increase in pricing will immediately strengthen the traditionalist belief in the value-for-money inconsistency, and may result in future stagnation of the whole domestic market. A similar thing appeared to happen in 2015 in Anapa ; after 2014's peak in the rates owners raised the prices, expecting to get more from their success, but the whole resort fell unexpectedly low in demand during 2015 season.

Ш Speaking about the political crisis, even if currently the difficulty still remains, it is highly possible that in the nearest future it will be again allowed for Russian tourists to travel to Egypt. Therefore, the hoteliers from Egypt are expected to do their best to get back the Russian audience. In January' 16, the all-inclusive hotels in Egypt costed 35 dollars for the night, which is actually extremely cheap. Thus, it is likely that after the end of restrictions the russian tourists will be offered even a 15-20 percent lower price from Egyptian hotel's.

To sum up, as a result of the unstable economic situation and the murky prospects of the tourism in general, in 2016 and after Russian hotel industry will face strong competition among hoteliers. Prices will remain the crucial deciding factor for visitors. Thus, the Russian tourism management needs to have a well-prepared strategic plan to guarantee that the Russian offer will keep attracting travellers while remaining the profitability. So as to be successful and stay competitive, international hotels have to look at the long-term prospects of their brand in Russian volatile market, while Russian hoteliers should keep in mind the need of upgrade the existing infrastructure of their hotels, and try to invest in improving the standards to meet international consumers' expectations.

The hospitality market in Nizhny Novgorod is particular, and it is still considered to be in the stage of emergence, regardless of the fact that it is already considerably huge: by the data analyzed on the regional level, by the 1st January of 2016 there were 92 hotels in the city ( equivalent to 4240 rooms). In other measurements, there are 3,7 rooms per 1 thousand citizens, - relatively few. For instance, in Moscow this percentage is more 10 rooms/ per thousand citizens, in Saint-Petersburg - around 8 rooms/per thousand citizens. Moreover, the problem exists not on the level of quantity of rooms, but on the level of their quality. Most of the counted rooms are a part of a last-century room inventory. Therefore, some of them need to be charged-off and the rest require serious investment and renovation.

Considering the existing peculiarities of the local market and the crucialness of the upcoming sportive mega-event in 2018, every hotel in Nizhny Novgorod has to analyze its current position in the market, to realize its strengths and weaknesses. It is extremely important to have a clear idea, which the desired positioning of the hotel in the market is and which are the objectives for the short-term and long-term perspective.

To start with, the hotels in Nizhny Novgorod could be divided in three segments: large, mini-hotels and hostels. In the following graph most of them are listed by the category:

Category of hotels	List of names
Large (more than 25 rooms)	1. Grand Hotel "Ока" 2. "Волна" 3. "Александровский сад" 4. Congress - hotel "Маринс Парк Отель Нижний Новгород" 5. ibis Nizhny Novgorod 6. "Октябрьская" 7. "Николь" 8. City Hotel Sova 9. AZIMUT hotel Nizhny Novgorod 10. Kulibin Park Hotel 11. Marriott Courtyard 12. Hilton “Hampton” Nizhny Novgorod 13. “Hey, I am home” hotel
Mini - hotels (4 - 25 rooms)	1. "Воробей" 2. "Гостинный дом" 3. "Никола Хаус" 4. Покровка, 9а 5. Easy Room 6. REST HOME 7. "Вертолетная площадка" 8. "Жук Жак" 9. "Монами" 10. “Хостел на Ильинке” 11. "Нежинский" 12. "Острожский Вал" 13. "У домика Петра" 14. "Юбилейная"
Hostels ( Shared rooms)	1. Best Days Hostel&Club 2. "Бугров Хостел" 3. Smile hostel 4. "Хоум Хостел НН" 5. Hostel “NN Central” 6. Berry-Hostel 7. Hostel “Friends Club” 8. Art-hostel “Fabrika Hostel and Gallery” 9. Guest House “Чилаут”

Figure 17: Hotels in Nizhny Novgorod by size category, 2016.

3.2 Recommendations on the hotel's positioning strategy for the foreign tourists coming for FIFA World Cup in 2018

In the following part the recommendations for the hotel's development and market positioning based on the all aforesaid findings will be given. To start with, it is vital to remind the list of value orientations, which were taken as a starting point for this study:

1. Economic orientation (how much is able to pay?)

2. Activity orientation ( which activities and services needs during FIFA World Cup ?)

3. Relations orientation (travels with family/ small group/big group/ alone? Hotel - guest relation?)

4. Communication orientation (how could be reached, through which channels?)

Economic orientation

Speaking about the average income of the respondents, as it was found from the questionnaire the absolute majority (51,9 %) of potential audience of FIFA 2018 in Russia have a relatively high income ( more than 1200$ per month). This is a good, but tricky news for the hospitality industry in Nizhny Novgorod - considering the current exchange rate EUR/USD/RUB, it could be predicted, that many FIFA visitors will be able to afford almost any room in the city. Nowadays the average price for the room in the local market is approximately less than 50 EUR (3596 RUB), which is much lower than in an European hotel market in general. Nevertheless, that is essential to keep in mind which kind of customer is expected to come for FIFA World Cup in Russia: as the research has uncovered, most of the guests could be from Europe (62,3%), where the hotel industry is much more developed.

To position itself in the right way and to estimate the range of possible prices for the services provided, the hotels in Nizhny Novgorod are recommended to double-check the international service standards and to add the FIFA-related services to the list of hotel's offer. What is more, there could be better pricing policy at the hotel, or one that relates better to the high and low seasons at the hotel: for instance, while the FIFA World Cup matches are hold in other host cities in Russia, it can be useful to decrease the prices in order to motivate some guests to continue the stay even without the FIFA World Cup activities. The daily rate could for example change based on the occupancy of the hotel or there could be a more efficient way of boosting the sales before hand when there are low customer flows coming to the hotel.

There could be also other objectives concerning modernizing; for example the TV channels in the hotel rooms at the present are limited; in some hotels there are no pay-tv or movie channels. For the sportive-connected event it would serve the customers better if there were more TV channels, especially the sport ones and in other languages than Russian and English. It would give a better image of the hotel to its customers; not only that it is a place to sleep but also the customers could watch TV from the big screen or do other FIFA-related activities that could be invented for them.

In general, this could turn out to be the great benefit for the local hospitality industry, since the upcoming flow of tourists may bring considerable revenues and may built the strong base for the future development of Russian FIFA cities as a tourist destinations.

Activity orientation

Figure 18: Level of interest in various options and services provided by hotels during FIFA 2018, 2016.

As for the recommendations on the activity orientation, on the first place is the provision of «Additional services connected to the FIFA World Cup ( such as: possibility to book tickets to the match at the reception, special events and meetings of teams fan-communities, and etc.)” - 63% of all respondents replied to consider this factor crucial while choosing the accommodation. Hence, the hotel's management and marketing team could enhance the hotel's value proposition a lot by launching the ticket office at the reception desk and by hosting fan meetings and other FIFA-related events.

The second suggestion in this field refers to the option “Breakfast/dinner included” - 52% of respondents have chosen this factor. Therefore, it is highly recommended for the hotels to include the breakfast and dinner in the room package.

In addition, many respondents (33%) mentioned the availability of the hotel's website in foreign languages as a decision-affecting one. Thus, for the hotel's, which have a gap in this matter, there is still a room for improvement before the World Cup in 2018.

Relations orientation

An average group attending a sporting event averaged 4.4 people. Almost the half of the respondents (40%) replied to travel in a group of 3-6 people. The second answer was “With family (and children)” which again leads us to the idea of FIFA average travel party size of >3 people. Thus, the hotel's management must comprehend clearly for which kind of FIFA World Cup travellers it can position itself during the event. In other words, it is hardly possible, that the hotel will be suitable for both the travellers with family and children and the big groups of football fans. Consequently, that is pivotal to choose the target group and to adapt the positioning so as to face the needs of the chosen audience.

What is more, who should get the highest attention from the management - are the unchanging customers. The questions, which should be faced, are: how can this category of clients feel the overwhelming attention from the personnel? In relationship marketing it is proposed that it is extremely beneficial for both the customer and the hotel to focus on a long-term relationship between them, since this kind of clients form the main basis for the hotel's revenues and development. If the hotel does not have any loyal customer-programs yet, it is recommended to consider this option.

In the end, what is also vital to mention: The respondents who said “NO” on the issue of willingness to visit FIFA 2018 in Russia, explained it on the basis of “Safety reasons”. This discovery could refer to the latest terrorist attacks, which happened in the places of high concentration of people. Therefore, the hotel's can benefit from this awareness - for instance, enhance the safety inside the hotel, explain, why this hotel could position itself as a more safe one than the others.

Communication orientation

Absolute majority (84%) of potential visitors of the FIFA 2018 consider the Internet to be the principal way of searching for the accommodation during the trip.

Nowadays the main power in this field belongs to meta-search projects ( such as Booking. Com., Hotels.com., Vandrouki. Com and etc.). Growing popularity of those programs may be the result of the function of comparison, which allows the person to compare the hotels by several matters at once, and to avoid the process of scanning the web-sites of each hotel one-by-one.

It is highly recommended for the hotels to revive their Internet platforms with the most up-to-date information. It could come in handy to position the hotel on the Internet as “the partner” or “support” of FIFA World Cup, and afterwards explain which are the concrete offers during the event. In addition, in order to contend successfully with other hotels, it is better to be present on as many online platforms as possible. Moreover, that is crucial not to underestimate the power of social media, and to post the information regarding the FIFA on the regular basis. In this way the hotel can create an image of active participation and attract guests.

The finding uncovered on the Official FIFA World Cup website could serve as an idea for hotels for the further development in terms of positioning for FIFA 2018 guests. On the Figure 19 we can see the section of suggested by FIFA committee accommodation options: to get listed in this section, the hotels have to apply to FIFA Tourism Committee and receive the authorization. On the Figure 20 it is clearly seen, that only three hotels in Nizhny Novgorod have gone through the procedure of authorization already. This means, that the FIFA 2018 visitors can already get the profile of these hotels from the official World Cup webpage and even make a pre-booking. Therefore, what could be suggested for the hotels - is to proceed with the authorization as soon as possible, so as to improve the chances to have pre-bookings from the FIFA guests.

Figure 19: Screenshot of official FIFA World Cup website page. (FIFA.com, 2016)

Figure 20: Map of Nizhny Novgorod with authorized by FIFA Comitee hotels and stadium. (FIFA.com, 2016)

Other marketing ideas for the better positioning of the hotel during FIFA World Cup are:

Companies within the near by area of Hotel:

Make a list of the companies in Nizhny Novgorod in the area around the hotel. Make a brief research about them first, write down what type of needs they could probably have somehow connected to accommodation services. It the company seems to have a demand for accommodation service, contact it and offer some room - packages or offer the conference / co-working hall for holding their meetings and presentations.

During FIFA World Cup many local companies may plan to hold some events in order to raise the consciousness about their brand. This could be a great chance for collaboration: it is likely that the companies may search for the most convenient place for their quests accommodation.

Involve Relationship Marketing

If it has not been done before - start getting the feedback information from the regular customers: ask what went wrong and which upgrades they appreciated. And therefore make a contact database and inform the guests about the special offers and promotional packages - the main aim here is to keep reminding about yourself. Make sure to train all the staff regarding the work with the feedback, both the negative and positive one.

Develop the loyal customer-program:

It is widely believed that a customer - program is equal to the membership-card system. However, this is not necessary like this. What can increase the loyalty of the guests, could be some kind of bonuses and extra services, which can be provided to them upon the arrival. Sometimes even meeting the guest at the reception deck with saying his/her full name can be a vital step on the way to making a guest feeling important.

To complete the recommendations list, hereby the key points gathered from interviews with FIFA experts in international papers (FIFA World Cup Update Magazine, 2010, 2014) are attached. To start with, they consider to come in handy for the hotels to do the following steps while hosting the FIFA World Cup guests:

Up-to-date the hotel systems with the appropriate technology

Russian hoteliers need to realize the need for multiple up-to-date technologies. By using applications and programs for rate calculations, rate shopping, updating rates and inventory, they can keep up with market changes in real-time. With the accurate and detailed management of OTA's by channel managers, the other management can focus on development strategy.

Account for meta-search to drive direct bookings

With the appearance of TripAdvisor, Google Hotel Finder, Kayak and Trivago, the hotel distribution strategy has totally changed. Almost 28% of people today like to compare rates through the means of meta-search, that is predicted over 13% growth in last years. Consequently, keeping in mind this information can bring us to the point that the presence in meta-search is vital in order to make a primary contact with the customer. What is suggested here is to attract the future guests via meta-search and to maintain them with the use of competitive live-rates, encouraging them to make more direct bookings.

Include mobile application in the marketing strategy

What is highly suggested nowadays is to weigh up everything carefully and create a mobile application for smartphone-users. The majority of global OTA's already launched a mobile application or at least an optimized for mobile website. Not being present on mobile platforms could result in losing the effectiveness of the main website of the brand, therefore refusing the chance to get more direct boоkings at better margins.

Mind not to be too gluttonous

Even if it seems ridiculous, but even a dynamic pricing could be appreciated by the customers. It may work out only of the factors affecting the price change are clearly correlated. What is recommended is to have a transparent rate strategy based on the offer and quality of the service, but not on the seasonality. This would not bring much profits during the peak seasons, however this is a really fruitful strategy for the long-term perspective: it helps to build up a customers loyalty, since they would always be sure about which price to expect.

Concentrate on the Social Power

Nowadays the presence and active participation in social media is an absolute “must” for every hotel. Ideally, the hotel's marketing department needs to work in collaboration with the sales depot so as to provote the brand and stimulate the sales at the same time. Scan all the social media to discover what prospective customers are searching for, add the findings in PPC for more effective conversion. In addition, in can come in handy to invest in such mechanics as SEM (Search Engine Marketing), SEO (Search Engine Optimization) and social media marketing campaign.

Do not ignоre 'Online Reputation'

Having 260 million unique visitors per month and more than 125 million opinions and comments, TripAdvisor has gained the status of the biggest travel webpage existing nowadays. As it is discovered by recent studies, 1/3 of customers will not book a room in the hotel without consulting the reviews first (Laterooms Survey, 2012). Reviews with a rate of 4 - 5 have the doubled conversion, compared to the one with 1.0 - 2.9 rate on Expedia. Hotels, which are rated higher and have more detailed overviews on these websites, usually have a placement of the one of the first pages that appear after the search for the destinations. It results in more clicks and more bookings, which, in turn, means more revenued from “online reputation”.

Its vital to mentioned, that in fact it is not really the TripAdvisor to accumulate the main “online reputation”. In fact, many travellers leave review and detailed opininons and descriprions in various blogs and personal pages - and this is a real treasure for the marketing teams. Guest review analysis, completed together with rate, occupancy, RevPAR and channel performance, can give to hoteliers the wide picture. In addition, this could provide the marketing team with fresh and unusual ideas for promotional collaborations and projects.

All in all, there is a range of factors that must be taken into account while aiming to get the market position attractive and suitable from the point of view of respondents. Especially the personnel may be used to their full potential; educating the workers and managing their duties in a manner that they can use their working time more efficiently is not complicated at an average hotel. Keeping the hotel staff proactive with work-related tasks directly impacts customer satisfaction. What's more, this is also beneficial for the workers themselves - they feel busier and more productive.

Making sure that all the marketing channels are working, systematically retaining and trying new ones help the hotel to keep up with the marketing development within the hospitality industry.

Conclusion of the Chapter 3

In the Chapter 3, the recommendations regarding the effective positioning for the hotel in Nizhny Novgorod during FIFA World Cup were given. The respondents demonstrated the high interest in the event, identified the most common way of searching for accommodation, revealed the particular interest in some additional characteristics of a hotel, such as the “location close to the FIFA stadium”. Moreover, the research uncovered an important category of potential visitors: travellers with children, who revealed the concern about the child-related services availability in the hotel. These, and several other significant finding could help the hotel's management in realizing their current discrepancies and enhance the value proposition and positioning in the market before the FIFA 2018.

The aim of the study was never to provide a tactical marketing planning with a fixed timeline, the aim of this research was to create a kind of framework on how the hoteliers may work with developing its value proposition and market positioning; which aspects of the current market positioning actions could be improved and what kind of new marketing actions could be added.

Summing it up, the hospitality industry in Nizhny Novgorod may not have the necessary resources to be as modern and upscale as many of the nationwide chain hotels, but it does have the resources to be innovative and to create an attractive image for the customers. What is required for this - is the idea of the customer's needs and value orientations.

Conclusion

In the nearest future Nizhny Novgorod is hosting for the first time the significant international event : FIFA World Cup 2018. For this reason, many preparations are already being done in the city. However, the hosting industry is the one that must prepare at its most for that particular event, since thousands of guest are expected to come during the FIFA activities.

The tourism industry can be divided into main sectors: hospitality, attractions and event, transport, travel organizers and intermediaries and destination organization sectors. Hotels, of course, are a part of the hospitality sector and as such are the major essential supply components of tourism. Initially, the image of every hotel is affected by the way it positions itself in the hospitality market. Positioning can be described as the act of designing the company's offering so that the services and products are based on some core idea or benefit. What is vital, positioning is always strongly correlated with hotels value proposition. The value proposition developed in the right way can help making it clear why a traveler should stay at your hotel while delivering “value” as defined by owners (in terms of):? increased market share;?increased revenues;?decreased operating costs;?improved efficiencies; lower employee turnover & improved guest satisfaction.

In the current paper the VOM (Value Orientations Method) served as a basis for building the structure of the research. The hypothesis were the following :

1. The community of football fans, who follow repeatedly sportive mega event (FIFA World Cup), form the separate subculture with its own system of value orientations.

2. Having analyzed these value orientations, it is possible to develop the value proposition and recommend the positioning strategy for the hotel based in Nizhny Novgorod so as to attract more visitors and get more profits during FIFA 2018 in Russia.

Therefore, the list of value orientations in this case was designed in the following way:

1. Economic orientation (how much is able to pay?)

2. Activity orientation ( which activities and services needs during FIFA World Cup ?)

3. Relations orientation (travels with family/ small group/big group/ alone?)

4. Communication orientation (how could be reached, through which channels?)

An respondent - completed questionnaire was conducted and has revealed few vital trends, which were presented in the graphs aforementioned in the Chapter 2.

In the Chapter 3, the recommendations regarding the effective positioning for the hotel in Nizhny Novgorod during FIFA World Cup were given. The respondents demonstrated the high interest in the event, identified the most common way of searching for accommodation, revealed the particular interest in some additional characteristics of a hotel, such as the “location close to the FIFA stadium”. Moreover, the research uncovered an important category of potential visitors: travellers with children, who revealed the concern about the child-related services availability in the hotel. These, and several other significant finding could help the hotel's management in realizing their current discrepancies and enhance the value proposition and positioning in the market before the FIFA 2018.

The aim of the study was never to provide a tactical marketing planning with a fixed timeline, the aim of this research was to create a kind of framework on how the hoteliers may work with developing its value proposition and market positioning; which aspects of the current market positioning actions could be improved and what kind of new marketing actions could be added.

Summing it up, the hospitality industry in Nizhny Novgorod may not have the necessary resources to be as modern and upscale as many of the nationwide chain hotels, but it does have the resources to be innovative and to create an attractive image for the customers. What is required for this - is the idea of the customer's needs and value orientations.

Appendix 1

The questionnaire for prospective FIFA-2018 World Cup guests

This questionnaire is a part of a master thesis research of a student of HSE (Higher School of Economics) in Nizhny Novgorod, Russia. It is completely anonymous and it will take not more than 5-7 minutes to complete it.

Thank You in advance for collaboration!

1) Sex

· Male

· Female

2) Age

· 18-25

· 26-35

· 36-45

· 46 and older

3) The region where You live:

· Europe

· Asia

· North America

· South America

· Australia & New Zealand

· Africa

4) Are you planning to visit FIFA-2018 World Cup in Russia?

· Yes

· No

5) If in question №4 You have chosen “NO”, please put the tick next to the reason (s) why:

· Too expensive

· Safety reasons

· Political reasons

· Other (please, specify) __________________________________

If in question №4 You have chosen “YES”:

6) In which way you are planning to travel:

· Alone

· With family (and children)

· With friends ( party size 3-6 people)

· In a big group ( 6 people and more)

7) What is your average income per month?

· Less than 400$

· 400$ - 700$

· 700$ - 1200$

· More than 1200$

8) Which kind accommodation are You planning to choose:

· Hostel / Hotel

· Apartment

· Stay at Your friend's place

· Other (please, specify)_________________________________

If in question №8 you have chosen HOSTEL / HOTEL:

9) Please put a tick next to the 3 options which will attract You MOST while making your choice of a hotel:

· Location close to the FIFA stadiums

· Location close to the city center

· Location close to the transport (such as airport, railway station)

· Low price

· Contemporary design

· Hotel brand name

· Breakfast/dinner included

· The web-site of a hotel available in Your language

· Additional services connected to the FIFA World Cup ( such as: possibility to book tickets to the match at the reception, special events and meetings of teams fan-communities, and etc.)

· Additional services connected to the care about Your child ( special beds, chairs, baby game room)

· Availability of conference-halls for fan meetings

· Other (please, specify)_______________________________________

10) How do You search for accommodation:

· Internet

· Tourist agencies

· Ask friends

· In tourist guides and travelling magazines

11) Are there any services that hotel can provide, which will be very useful for You during Your stay at FIFA World Cup ?

· Yes, (please, specify)_________________________________________

_____________________________________________________________

· No, I do not need anything special.

Thank You for collaboration!



Размещено на Allbest.ru