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SCHOOL OF ARCHITECTURE, BUILDING AND DESIGN

Foundation of Natural & Built Environments (FNBE)

Assignment: A Tale of Two Businesses A Comparative Analysis of 2 Businesses of Similar


Industry in Different Geographical Locations
GROUP MEMBERS

NO
1
2
3
4
5

Name
Kiing Kiu Chun
Lau Chin Sheng
Nur Aqilah Syaza
Sabrina Wiora Saidi
Sham Zhen Wen

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STUDENT ID
0318727
0317899
0317731
0317776
0317733

TABLE OF CONTENTS

NO.
1

Title
Summary

1.1 The History of Hotel Business


Brief Bio of The Business

5
6

Page
3

2.1 Comfort Lodge

2.2 Time Capsule Retreat


Comparative Analysis of the Businesses Competitive Traits

3.1 Comfort Lodge

3.2 Time Capsule Retreat


Recommendation

12

4.1 Comfort lodge

14

4.2 Time capsule Retreat


Appendix
References

15
17
27

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SUMMARY
This report is a Comparative Analysis of two businesses of the similar industry in different
geographical locations. This project aims to analyze and compare two businesses on different
settings and let students understand the market competition in the real world. The businesses that
we chose to study are Comfort Lodge, located in Kuala Lumpur and Time capsule retreat in
Kuantan. This report consists of background information and comparative analysis about the
businesses. Face to face interview was used to obtain the information and compare the
businesses competitive traits. After analyze, we had found that Comfort Lodge Is more
commercially successful than Time Capsule Retreat. We also give some recommendation to both
hotels.

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1.1 The history of hotel business


Hotel industry emerged following world war II. The booming postwar economy enabled us to
afford any transportation and travel for leisure purpose. When more people travel to other place,
they need a place to stay. This is when hotel business spark.
Tourism was virtually unknown in Malaysia until the late 1960s. Since then it has developed
very rapidly into major industry and makes an important contribution to the countrys economy.

In year 2009, 31.1% of the tourist expenditures is from accommodation itself.


MALAYSIAN ASSOCIATION OF HOTELS (MAH) was established in 1974. Since its inception, MAH has
constantly enhanced the hotel and tourism industry by integrating member hotels throughout Malaysia.

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BRIEF BIO OF THE BUSINESSES

2.1Comfort Lodge
Comfort lodge is a backpacker hotel which provide the accommodation with a cheap price from
the range of RM45~RM95. The type of rooms they provided are, Single room (with fan), Single
room, double room (standard), double room (deluxe), double room (Superior, attached with
bathroom) and Family room. Besides, Comfort lodge also provides online booking and price list
for each types of room, which provide much more convenience for the customer.
The hotel situated 15 minutes walk to the KL Tower and 20 minutes walk to the PETRONAS
Twin Tower. Their location is 5 star, situated right in the middle of CSD (Central Shopping
District), the Bukit Bintang Area where all the major shopping complexes are concentrated,
e.g. Suria KLCC, Sungei Wang Plaza, Starhill, Times Square and the coming Pavilion Complex.
There are also electronics specialist complexes like Imbi Plaza and Low Yat Plaza that has a
wide range of electronics goods.
The Bintang Walk has a Paris-like road side cafe atmosphere that is filled with energetic
crowd, and a place to be seen. A short walk towards KLCC (Kuala Lumpur City Centre PETRONAS Twin Tower) you will find the night life of KL, the happy crowd that parties until
morning.
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China Town is also 20 minutes walk away and you can shop a variety of imitation goods at a
fraction of the original price. A variety of food, local, Chinese, Indian, Indo, Viet, Thai, Italian,
German, Brazilian, Arabian etc. are available around the corner, about 24 hours daily. Local
called it Glutton Street. Around CSD, are major international brand of hotels and offices of
multinationals. So all you need to do, see and just relax is all within 20 minutes walk.
They are CHEAP, COMFORTABLE, CONVENIENT & CLEAN!!!
COMFORT owns other businesses apart from COMFORT LODGE such as COMFORT INN
located in No.65 Changkat Bukit Bintang
50200 Kuala Lumpur; it is a budget hotel (about 2 star) has 37 rooms, all with ensuite
toilet/shower facilities.

COMFORT also owns COMFORT SERVICE APARTMENT located in Angkasa lmpian 2,


Condo Jalan Sahabat, Bukit Bintang 50020 Kuala Lumpur, Malaysia. It is a luxury condominium
in the heart of Kuala Lumpur city, called Bukit Bintang (Star Hill). Short walk to all major sites,
PETRONAS Twin Tower, KL Tower, major shopping malls and Chinatown.
The founder of the Comfort Lodge is Mr Leong Tian Hock. The reason he started this business is
because 15 years ago, there was very few number of budget hotel and Mr Leong thinks that this
field or business has a great potential and opportunity. Comfort Lodge established since year
1999. Over the past 15 years, the business has changed, become tougher. Comfort Lodge opened
one more branch nearby but the competitors are increasing dramatically.

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2.2 Time Capsule Retreat

Time Capsule Retreat located at in the middle of the Sungai Lembing Town.(Bandar Sungai
Lembing 26200 Kuantan , Pahang , Malaysia.) Time Capsule Retreat is founded at the year of
2014, April. It is a space capsule like hotel. According from Mrs Tan Siow Lan (owners
mother): Mr Kelvin Young (founder of the Time Capsule Retreat) likes to travel around and he
got inspired by the Capsule Hotel in Mexico. When he came back to Malaysia, he had discussed
with my husband, his father, Mr Young to open a capsule theme hotel in Sungai Lembing.

Time Capsule Retreat aimed to provide every guest a pleasure experience with the natural, a
getaway from the concrete jungle. Time Capsule Retreat not only provided accommodation, they
also provided Local tour and arrange some outdoor activities, such as, Hiking the Panorama Hill,
Jungle trekking, visit the Rainbow water fall.
Time Capsule Retreat is currently fully booked until the next two months. Other than that Time
Capsule Retreat has a weekday promotion which the visitor can enjoy a special rate on the
weekday. This promotion is cooperate with Groupon and Agoda. Besides, Time Capsule Retreat
also decides to expand their business in Johor and Selangor in the upcoming future.

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COMPARATIVE ANALYSIS OF BUSINESS COMPARATIVE TRAITS


Comfort Lodge
1. Numbers of competitors of businesses in their respective markets.
According Mr. Aaron, the reception of Comfort Lodge, the number of
competitors in its respective geographical markets is a lot, especially since last
5 years. It is about 10 to 50 in Tengkat Tong Shin area, and around 50 to 150
in Bukit Bintang area. Comfort Lodge shares around 10% in the market in
Tengkat Tong Shin area. (Mr. Aaron, Personal communication, 29/11/2014).
Its top three competitors are Tropical Guess House, Anggun Hotel and Alpha
Genesis Hotel. However, since the past 5 years, they were facing a lot
challenges from the competitors. Comfort Lodge has top three competitors
which are Tropical Guest House, Anggun Hotel and Alpha Genesis Hotel,
they are located in the same area. Tropical Guess House is a bamboo Tropical
guest house located beside Comfort Lodge. Tropical Guess House is famous
with its bamboo tropical build style and great hospitality. On the other hand,
Anggun Hotel is a four-star deluxe boutique hotel with luxury interior and
exterior design. While Alpha Genesis is a bigger hotel compare to other hotels
at that area, and it provides breakfast for guests.

2. Strategies used to compete with its competitors


Comfort Lodge is able to survive and compete with its competitors because it
provides clean and comfortable rooms with reasonable price. The price of
Comfort Lodge is around RM 45 RM90 per night, which are reasonable.
The staff of Comfort Lodge will make sure the room is cleaned by the cleaner
after the customer checked out from the room to ensure the clean and comfy
environment of the hotel. Besides, they will provide proper training for staff
every one year. This can help them to provide a better customer services
compare to other hotels. Moreover, Comfort Lodge has good review and high
reputation from backpackers, people will choose to trust and stay in that hotel
since a lot of people recommended and satisfied with its rooms and services.

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The pricing power of Comfort Lodge is weak, it is following the market


prices, but under certain condition, eg, during peak season, numbers of
tourists will more than rooms that hotels can
provide, hence this cause its
pricing power wont be affected by other competitors. Comfort Lodge has one
more branch, Comfort Inn at Changkat, Bukit Bintang. According to Mr
Aaron, the profit of hotel is still growing from year to year although number
of competitors became more.

In order to enter the hotel market at Bukit Bintang, Mr Aaron mention that it
is not as easy as 15 years ago. The barrier to enter the hotel market is weak
since it does not require a lot of specialized field of knowledge (Mr Aaron,
Personal communication, 29/11/2014). It is hard for a new hotel to survive
because it needs to compete with huge amount of competitors. The existed
hotels around Bukit Bintang area have good reviews and high reputation that
gain by its good services and experienced staff.
According to Comfort Lodge's characteristics, the nature of hotel market at
Bukit Bintang, Kuala Lumpur is monopolistic competition. In my opinion, the
hotel in Bukit Bintang need to face a lot of challenges from their competitors,
the new comer is really hard to survive unless they provide better services and
facilities that can attract tourists and also need to advertise more to increase
their reputation.

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Time Capsule Retreat

1. Numbers of competitors of businesses in their respective markets.


Time Capsule Retreat is located at the center of Sungai Lembing Town Kuantan,
Pahang. It is situated near the famous Rainbow waterfall. The hotel is located near to
a tourist spot. According Miss Tan Siow Lan, the owner of Time Capsule Retreat,
currently they have no competitors at that area, but she thinks that there will be some
potential competitors in the upcoming years (Miss Tan Siow Lan, Personal
communication, 29/11/2014).

2. Strategies used to compete with its competitors


Although Time Capsule Retreat has no competitors now, but the owner thinks
that there will be some potential competitors in the upcoming years. Hence,
the owner of Time Capsule Retreat did applied some strategies to compete
with its potential competitors. First of all, Time Capsule Retreat is cooperating
with Groupon and Agoda by providing special rate during weekday. Besides
that, Time Capsule Retreat did advertise through social media such as
Facebook and Instagram to improve its popularity. In addition, by using social
media, they also provide a platform to their previous customer to share their
thought and experience with others. Moreover, Time Capsule Retreat
provides a lot of services such as arrange outdoor activities and local tour.
Time Capsule Retreat will provide these services for their customers with
reasonable prices if they requested for it. On the other hand, Time Capsule
Retreat acquired inspiration from the Capsule Hotel from Mexico which used
concrete pipe cylinder to replace the normal room.
According to Miss Tan Siow Lan, The pricing power of Times Capsule
Retreat is weak, its prices are following the market prices (price taker).
Although, Times Capsule Retreat has no competitors at that area, but to
prevent customers lost, they chooses to refer others location market price.
(Miss Tan Siow Lan, Personal communication, 29/11/2014).
In order to enter the hotel market at Sungai Lembing, Kuantan, Miss Tan
Siow Lan said that it is hard. The barrier to enter the hotel market at Sungai
Lembing is strong because most of the customers prefer the hotel they used to

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stay rather than new comer. Besides, it requires specialized field of knowledge
to start theme hotel business.
According to Time Capsule Retreat characteristics, the nature of hotel market
at Sungai Lembing, Kuantan is oligopoly. In my opinion, the new hotel in
Sungai Lembing need to face a lot of challenges from its competitors, the new
comer is hard to survive unless they provide better services and facilities that
can attract tourists and also need to advertise more to increase their reputation
so that people will choose to stay at their hotel.

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RECOMMENDATIONS
4.1 Comfort Lodge
1. Undergo Renovation
-Comfort Lodge should undergo renovation to provide a brand image to the customer.
This because current building of Comfort Lodge is kind of out-dated, should follow the
modern trend and design to attract more customers. Redesign the ambient inside the hotel
to create a new atmosphere to the customers.
2. Advertise in variety way.
-Comfort Lodge should advertise more and in variety way. This is because comfort lodge
located inside the deepest part of alley. Hence, they need to advertise their lodge more
frequently. For example, they can create a Facebook page to connect the business with
the customer. Through this way, they can easily connect with the customer and potential
customer and yet people can access the Lodges info easily.

4.2 Time Capsule Retreat


1. Provide more Capsule Room
- Currently there are only 8 Capsule rooms in Time Capsule Retreat and it is insufficient to
the high demand from the customer, to overcome this problem we strongly recommend the
owner to add more capsule room to solve the insufficiency of room.
2. Provide Shutter Bus
- Time Capsule Retreat is located at the urban area, which is facing the inconvenience of
public transportation. If and only if the hotel can provide the shutter bus service then the
inconvenience of transportation will be solved.
3. Held more contest or event to promote the hotel
- We recommend the owner to held contest and event frequently which aim to promote the
hotel. For example, selfie contest; the picture with the most liked and shared on Facebook
can stay in the hotel without paying any money.

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Comparative Analysis Summary Table


Competitive
Traits
Number of
Competitors
Barrier to Entry

Comfort Lodge (Klang Valley- Based)

Time Capsule Retreat(Kuantan-Based)

10-50

0-5

-Weak

-Strong

-does not require a lot of specialized


field of knowledge

- most customers prefer the hotel they


used to stay.

Differentiated
or Standardized

-Differentiated( many type of rooms


from range of RM45 - RM95 )

-Theme hotel requires specialized field


of knowledge
-Differentiated( Capsule like room and
white cottage room)

Pricing Power

-Weak (Price taker)

-Weak (Price taker)

-Due to too many competitors if their


price is higher than market price, they
will lose customers
-Has close product substitutes

-Follow market price in order to


prevent customers loss

-Mutual dependence

-Mutual dependence

-Constant advertising (web page)

-Constant advertising (Facebook,


Instagram)
Oligopoly

Other
Characteristics

VERDICT

Monopolistic competition

-Has close product substitutes

Based on analysis, Comfort Lodge would be more commercially better than Time Capsule
Retreat. This is because compare to Sungai Lembing, the market in Bukit Bintang is more
competitive. However, Comfort Lodge is able to survive and maintain positive growth in profit.
It also opened one more branches nearby. It shows that Comfort Lodge is stronger compare to
Time Capsule Retreat
5. Appendix

Video link 1: http://youtu.be/pB9FYL2Rj3o

Video link 2 and Video link 3: http://youtu.be/NNUH8iCIQ08


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Comfort Lodge

Comfort Lodge
(Website)

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Time Capsule Retreat

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Time Capsule Retreat Website

Time Capsule Retreat Facebook Page

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Comfort Lodge
52 Tengkat tong shin,
Cangkat Bukit Bintang,
50200 Kuala Lumpur, Malaysia.
Tel: +603-2145 1818
Fax: +603-2145 7686
Interview Note
1. When was the business founded?
- 1999(15 years ago)
2. Who are the key founders?
-Mr Leong Tian Hock
3. What prompted the founders to start this business?
-back to 15 years ago there were not that many budget hotels and the founder saw the
potential and opportunity of this business
4. What are your main products or services?
-We provide room with reasonable prices.
5. Who are your customers? (eg. Age group, income-level, education-level, etc)
-Mostly backpacker
6. How many branch offices/stores do you have?
-there is one more branch nearby
7. Can you provide us a brief history of your business?
-Can be obtained from the Comfort lodge web page

8. How was the recent development of the business?


-It is depends, the more the tourists the better the business perform. Overall, its a
positive growth.
9. Do you have many competitors? Who are they? Who are your top 3 competitors?
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-Yes, we do. Since past 5 years, we were facing a lot challenge from the competitors. The
top 3 competitors are Tropical Guess house, Anggun Hotel and Alpha Genesis Hotel.
10. How big is your market share as well as your top competitors?
-Approximately 30%
11. Is the business constantly facing strong competition from other competitors? What
strategies have they used to compete you?
-Normally they provide a lower rate than our hotel, and sometime they do provide a
better service (customers experience).
12. Generally, do you feel it is easy or hard to enter this market? why?
-Not easy to enter the market, because of huge amount of competition, it is tough and not
as easy as 15 years ago.
13. How do you compete with your competitors? What strategies do you employ to divert
customers away from your competitors?
-We improve our customer services, more advance facilities and enhance the hotel
environment become more comfortable.
14. How often do you release a new product or promotion?
-Not really, but like what I said before, we upgrade hotel facilities, well trained the staff
to provide a better service than other hotel.

15. Are your pricing decisions strongly affected by your competitors? Why or why not?
-Yes, pricing is one of the factors, but then if there are more tourist visits and happen to
stay here, then I do say that is doesnt affect that much.

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Time Capsule Retreat


Sungai Lembing Town
26200 Kuantan , Pahang ,
Malaysia.

Interview Note
1. When was the business founded?
- The year of 2014, April
2. Who are the key founders?
-Mr Kevin Young Tien Seng
3. What prompted the founders to start this business?
-Mr Kelvin likes to travel and stay in different type of guest house and this inspired him
to start this business and he thinks this business has a great potential and opportunity at
Sungai Lembing, Kuantan
4. What are your main products or services?
-Other than providing accommodation, we also can arrange some outdoor activities, such
as jungle tracking, visit the Rainbow water fall, climbing Panorama Hill and if they want
to, we can give them a local tour around the Sungai Lembing.
5. Who are your customers? (eg. Age group,income-level,education-level, etc)
-Our customer are from all range age group, mostly local.
6. How many branch offices/stores do you have?
-No, Currently we have no other branches. However, we are considering to open more
branches in the future, maybe around the Johor and Selangor area.
7. Can you provide us a brief history of your business?
-Can be obtained from the Time Capsule Retreat web page
8. How was the recent development of the business?
-The business is doing fine now, and fully booked until the next follow 2 months
9. Do you have many competitors? Who are they? Who are your top 3 competitors?
-No, currently we dont have any competitors.
10. How big is your market share as well as your top competitors?
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-Approximately 0-5
11. Is the business constantly facing strong competition from other competitors?
-(No competition)
12. Generally, do you feel it is easy or hard to enter this market? why?
-Not easy to enter the market. At the early stage of this business, we doubt that we will
have any customers because we dont have any experience before this.
13. How do you compete with your competitors? What strategies do you employ to divert
customers away from your competitors?
-Although we dont have any competitor now but we are still doing some promotion, for
example we cooperate with Groupon and Agoda. Besides, we do alsoe advertise through
Social media such as Facebook and Instagram.

14. How often do you release a new product or promotion?


-Like what I mentioned above, we do cooperate with Groupon and Agoda to provide a
promotion which customer can enjoy a special rate at weekday.
15. Are your pricing decisions strongly affected by your competitors? Why or why not?
-Yes, although we are not facing any competition from other, but we still compare their
rate with our price to provide a reasonable price to every tourist who visit Sungai
Lembing.

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Reference
Fazrol Nasir(2014/10/19). Tidur dalam kapsul. Berita Harian. Retrieved from
http://www.bharian.com.my /
(2014/9/7) . . . Retrieved from http://www.chinapress.com.my/
(2014/5/1). . . Retrieved from
http://www.nanyang.com/nySTO.phtml
Time Capsule Retreat(n.d)In facebook[Hotel . National Park] Retrieved from
https://www.facebook.com/timecapsuleretreat
Time Capsule Retreat(2014) About Us. Retrieved from
http://timecapsuleretreat.wix.com/home#!blank/czr2
Comfort Lodge (2014) About us. Retrieved from http://www.hotelcomfort.biz/html/about.htm

Ministry of tourism, Malaysia(2009) Malaysia Tourism Key Performance


Indicators.(book)
C. Michael Hall, Stephen Page.(2000) Tourism in South and South East Asia Issues
and Cases.(book)

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