Smolyaninova PDF

Hospitality Market Opportunities
for the Business Market Segment

in Borlnge
Dissertation submitted by
Julia Smolyaninova
In partial completion of the award

MA European Tourism Management
Source: Hallmark Hotel (2007)
MA European Tourism Management

Hgskolan Dalarna and Hochschule Heilbronn
Bournemouth University
2007
Declaration
I declare that this dissertation is my own unaided work. I have not included any material
or data from other authors or sources which are not acknowledged and identified in the
prescribed manner. I have read the section in the Student Handbook on Assessment
Offences and understand that such offences may lead the Examinations Board to
withhold or withdraw the award of Master of Arts.
Julia Smolyaninova - ii - (MA) European Tourism Management

Acknowledgements
I would like to thank God for giving me inspiration and also my Family and Friends for
supporting me. I am indebted to all the People who, in spite of being busy, were
generous with their time and enthusiasm regarding the research, and who participated
in the interviews and supplied very valuable information. I am also immensely grateful
to my Tutor, Rune Wigblad, for his motivating ideas and invaluable advice.
Julia Smolyaninova - iii - (MA) European Tourism Management

Abstract
The intention of the current research is to analyse the local hospitality market in
Borlnge, Sweden, and find out the opportunities for establishing a new hotel in the
town which will focus on the business travel market segment. The local hotels under
investigation are four star (First Hotel Brage, Park Inn Gustaf Wasa, Quality Hotel
Galaxen) and three star (Scandic Hotel Borlnge) hotels. Besides leisure tourists of the
town, they serve the business guests of large and small organisations located in the town.
The total room capacity is 437 rooms; provide a broad range of services and facilities
and tend to satisfy their business guests by running customer loyalty programs and
offering some extra facilities as well as high quality service. Nevertheless, various
service aspects do not meet the expectations of the business customers and need to be
improved or changed. Moreover, the room capacity of all the hotels is not enough during
some seasons when most business meetings take place. This dissertation has investigated
the gaps in services and facilities of these hotels from the view point of their customers.
The methods which were used for gaining information were different. The examination
of literature helped to build the conceptual background of positioning strategies. The
business people, namely the employees and guests of large Swedish national
organisations were interviewed individually in order to know their opinions and
preferences concerning hotels in general (when they stay while on business trip) and
their experience of staying in Borlnge hotels.
The combination of these procedures helped the author to understand what business
people expect from hotels and revealed the weaknesses and strengths in the service of
the local hotels. Then these weaknesses, as well as strengths, were used to identify which
kind of hotel is demanded at this particular market and to develop the strategy for
positioning a new hotel which can not only fill the gaps and meet the needs of business
customers, but offer some new unique concept of hospitality.
Julia Smolyaninova - iv - (MA) European Tourism Management

Keywords: hotel, types of hotels, business traveler market segment, market strategies,
segmentation, differentiation, positioning.
Julia Smolyaninova -v- (MA) European Tourism Management

Table of Contents
Contents Page Number
Declaration ii
Acknowledgements iii
Abstract iv
Table of Contents vi
List of Figures and Tables x
List of Appendices xi
Glossary xii
Chapter I Introduction
1.1 Rationale 1
1.2 Aims and Objectives 2
1.3 Methodology and Dissertation Structure 3
Chapter II Analysis of the Hotel Concept
2.0 Introduction 5
Chapter II Part One Hotel Concept 6

2.1 Definition of the Hotel 6
2.2 Importance of hotels 6
2.3 Types of Hotels 7
2.4 The Hotel as Total Market Concept 8
2.4.1 Location 9
2.4.2 Facilities 10
2.4.3 Services 10
2.4.4 Image 11
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2.4.5 Price 11
2.4.6 Ability to Differentiate the Product 11
2.5 Summary to Chapter II Part One 12
Chapter II Part Two Marketing Strategies: Segmentation, Target 13

Marketing, Market Positioning and Differentiation
2.6 Hotel Market Segmentation 13
2.6.1 Segmentation Based on Trip Descriptors 14
2.6.2 Segmentation Based on Tourist Descriptors 15
2.6.2.1 Geographic Segmentation 15
2.6.2.2 Demographic Segmentation 16
2.6.2.3 Psychographic Segmentation 16
2.6.2.4 Usage Segmentation 16
2.6.2.5 Benefit Segmentation 19
2.6.2.6 Price Segmentation 20
2.7 Target Marketing 22
2.8 Market Positioning 22
2.9 Choosing the Strategy for Hotel Positioning 23
2.9.1 Differentiation 24
2.9.2 Differentiation in Hospitality 25
2.9.3 Selecting the Competitive Advantage 26
2.10 Summary to Chapter II Part Two 27
Chapter II Part Three Market Segment: Business Traveler 28

2.11 Target Markets of the Business Travel Market Segment 28
2.12 Description of the Business Travel Market 31
2.12.1 Decision-making and Hotel Selection 31
2.12.2 Priorities of a Business Traveler 32
2.12.3 Expense Management 24
2.12.4 Booking Procedure 24
2.12.5 Occupancy Rate 35
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2.13 Summary to Chapter II Part Three 35
2.14 Summary to Chapter II 35
Chapter III Methodology
3.0 Introduction 37
3.1 Secondary Research 37
3.2 Primary Research 38
3.3 Interviews 41
3.4 Sample 43
3.5 Limitations 45
Chapter IV Local Market Analysis
Chapter IV Part One Borlnge: Description of the Area 47

4.1 Attractions in Borlnge and in the Nearby Areas 48
4.1.1 In the Center of the Town 48
4.1.2 Attractions in the Nearby Areas 49
4.2 Weather 50
Chapter IV Part Two Borlnge Hospitality Market 52

4.3 The Focus of the Research: Four Hotels in Borlnge 52
4.4 First Hotel Brage 52
4.5 Park Inn Gustaf Wasa 55
4.6 Scandic Hotel Borlnge 57
4.7 Quality Hotel Galaxen 60
4.8 Summary to Chapter IV Part Two 64
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Chapter IV Part Three External Analysis of the Market: 66
Opportunities and Threats at the Local Market
Chapter V Analysis of the Interviews. Developing the

Positioning Strategies
Chapter V Part One Analysis of the Interviews 69

5.1 Question Areas 69
5.2 Interviews with business people 69
5.3 Interviews with Travel Service Representatives 74
5.4 Interviews of the Guests of the Companies 76
5.5 Summary to Chapter V Part One 77
Chapter V Part Two Novotel. Uniqueness and Peculiarity 79

5.6 Novotel 79
5.6.1 Differentiated operating structures 79
5.6.2 Brand strategy 79
5.6.3 Other Hotel Concepts: Services and Facilities 80
Chapter V Part Three Developing and Choosing Positioning Strategies 82
Chapter VI Conclusions and Recommendations
7.1 Conclusions 84
7.2 Recommendations for Industry 85
7.3 Recommendations for Further Research 86
Bibliography 87
Appendices 94
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List of Figures and Tables
Figure 1. Dissertation Structure 4
Figure 2. Hotel as Total Market Concept 9
Figure 3. Steps in Segmentation, Targeting and Positioning 14
Figure 4. The Hotel Market from the Business/Leisure Perspective 21

and Benefit Segmentation
Figure 5. Factors Affecting the Choice of a Hotel 36
Table 1. Comparison of Structured, Semi-structured 40

and Unstructured Interviews
Table 2. Interviews Participation in the Research 44
Figure 6. Sample Criteria Used for Interviews 45
Table 3. Assembled Table of Borlnge Hotels Facilities 64
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List of Appendices
Appendix I. List of Questions for Business Travelers 94
Appendix II. List of Questions for Representatives of Travel Service 98

Departments
Appendix III. List of Questions for the Business Guests of the Companies 104
Appendix IV. List of Questions for Hotel Managers 107
Julia Smolyaninova - xi - (MA) European Tourism Management

Glossary
Hotel is a commercial organisation where once can get accommodation and food,
alongside the access to other recreational and relaxation facilities and services.
Business Traveller is a person who travels either individually or with a group of

colleagues for business purposes. The business clients of hotels are considered to be
demanding about facilities and services, and less price-sensitive than leisure travelers
(Page, 2007)
Segmentation is the process of dividing the market into various groups of customers in
accordance with their needs and expectations from the product or service (Zineldin,
2000).
Target marketing is the strategy, derived from segmentation; but target markets, as
distinct from segments focus on specifically one part of the market, on more narrow
groups of customers who have similar needs and desires, (Lewis and Chambers, 1989).
Differentiation is a strategy, by which the company attempts to be unique and different

from other companies, when producing the similar product or service, in the attributes
(one or a few) significant for the consumer (Porter, 1998).
Market Positioning is the strategy aimed at creating the image and perception of the
product in customers minds based on its different attributes (Lewis and Chambers,
1989).
Julia Smolyaninova - xii - (MA) European Tourism Management

Chapter I
Introduction
Business travel is not a new phenomenon. Since ancient times, people were traveling for
purposes of work. The tendencies of the modern world, globalisation, development of
international businesses, growth of new industries and technologies, political and
economic factors make people from different cities and countries work together. The
new approaches in organisational management tend to highlight the value of meeting
each other personally, discuss problems and opportunities for sustaining their businesses.
Moreover, there is a growing trend to travel on business.
That is why the business travel market is one of the largest and most desirable in
tourism. Tourist industries all over the world work at developing of new strategies for
attracting business customers and excel their competitors in services.
Hotel industry did not remain aloof. In conditions of growing competition for the
business travel market share thousands of hotels and hotel chains all over the world
develop their brands and launch product and service strategies in search of competitive
advantages and in attempt to satisfy the needs of the business customer. Market
segmentation, brand strategies, positioning, customer loyalty programs are the basics of
the business travel market strategies within the hotel industry (Schlentrich, in Seaton and
Bennett, 1997). Therefore one of the intentions of this dissertation is to highlight the
importance of sustaining development of the hotels strategies and of focusing on
understanding the business customer needs.
1.1 Rationale
The reason that the topic of importance of the business traveler market segment and
market strategies for this segment in the hotel industry was chosen, is mostly explained
by the personal interest of the author to the organisational customer segment in
hospitality and business event management, as well as by the past research in the sphere
Julia Smolyaninova -1- (MA) European Tourism Management

of organisational change. The business segment is the most fast growing and most
profitable for hotel industry. Understanding the substantial scale and the importance of
the business traveler market for hotels sustaining development will help to reveal the
gaps and find the opportunities for improvement. Nowadays any hotel management
focused of the business traveler segment (as well as on any other segment) should take
into account preferences and needs of its target groups and based on the analysis of those
needs, develop marketing tactic and create the unique positioning strategies which will
help attract and retain the business customer.
1.2 Aims and Objectives
The main aim of this dissertation is to:

Analyse the local hospitality market and find out if there is a need and
opportunity for establishing a new hotel in Borlnge.
To achieve this aim a number of objectives can be identified:

Taking into account the growing significance of the business market segment
worldwide, to analyse the importance of this segment for the local hospitality
market
To determine the important factors that affect the decision-making process by
hotel selection
To reveal the preferences of the business people and their expectations from the
hotel service
To single out the attributes of the hotel that determine the positioning strategy
To identify the gaps in the local hospitality market and to analyse if there is a
need and opportunities for establishing one more hotel in the town.
Find out the appropriate strategy for positioning a new hotel chain in Borlnge

1.3 Methodology and Dissertation Structure
In order to achieve the main aim of the research a range of methods, namely the
combination of primary and secondary researches, were used. First, a literature review
was conducted in order to arrive at a scientific and rigorous conceptual framework and
provide guidance to the further research development. The relevant literature, primarily
in the fields of hotel management, hospitality marketing, business travel, market
strategies, segmentation, positioning and differentiation were scanned, to single out the
essential factors for defining the positioning strategies. The sources used for the
secondary research are books, journal articles and official web sites (ELIN, Questia,
Ebrary, NetLibrary, EBSCO Host, Libris, Google Scholar, World Wide Web).
Secondly, the business people of the local big organisations (SSAB, Vgverket, Stora
Enso,) were interviewed in order to learn about their experience of staying in hotels and
the preferences and expectations of business customers from hotel facilities. Then, based
on the represented theories and the gained information from the interviews, the local
hospitality market was contemplated and the opportunities and needs for establishing a
new hotel within this area were analysed. Finally, the positioning strategy for
establishing a new hotel focusing on the business travel segment market was developed.

Dissertation Structure
Figure 1 shows the conceptual development and structure of the research.
Chapter I Rationale
Introduction Aims and Objectives
Methodology and Dissertation Structure
Introduction
Part One: Hotel Concept
Chapter II Part Two: Marketing Strategies: Segmentation,
Analysis of the Hotel Concept Target Marketing, Market Positioning and
Differentiation
Part Three: Market Segment: Business Traveler
Introduction
Chapter III Secondary research
Methodology Primary Research
Interviews Sample Limitations
Part One: Borlnge: Description of the Area

Chapter IV
Part Two: Borlnge Hospitality Market
Local Market Analysis
Part Three: External Analysis of the Market
Part One: Analysis of the Interviews

Chapter V Part Two: Novotel. Uniqueness and Peculiarity
Analysis of the Interviews
Part Three: Developing and Choosing Positioning
Developing the Positioning
Strategies
Chapter VI Conclusions
Conclusions and Recommendations for Industry
Recommendations Recommendations for Further Research
Figure 1. Dissertation Structure

Chapter II
Analysis of the Hotel Concept
2.0 Introduction
Nowadays traveling is becoming more and more common activity. The growth of
economy in some countries gives the opportunity to not only travel more, but also use
the early retirement opportunities, and thus become consumers of tourism products. The
growth of the youth market has also played a significant role for increase of traveling.
Young people today have become experienced consumers of hotels, air planes and
frequent travelers to various tourist destinations. Technological change is a very
important factor for growing tourism, as development of transportation means (cars,
trains, air jets), telecommunication systems and others gave an opportunity to people to
communicate and travel easily and get all the necessary information quicker. The social
change influenced the increase of consumption in all aspects. The growing influence of
mass media and expanding the facilitating means (credit cards, store cards, mail order,
television shopping channels) made products and services more available. Increased
globalization made the influence of multinational companies more significant and made
traveling a necessary prerequisite of developing and expanding business (Williams,
2002).
These factors insured the expanding of tourism; nowadays the increasing number of
people can afford traveling. Jones (Jones in: Buhalis and Costa, 2006) claims that every
day 300 million people sleep away from home. Today the motivations that make people
stay away from home can be different: business, meetings, leisure, culture, religion,
education and health, visiting friends or relatives. And when people visit some place,
very often, they stay at a hotel.

Chapter II Part One Hotel Concept
2.1 Definition of the Hotel
At the heart of hospitality industry lies a simple idea of providing hospitality, that is
providing people with food, drink and place to sleep (Jones in: Buhalis and Costa, 2006).
According to Medlik's definition, a hotel is an establishment providing for reward
accommodation, food and drink for travelers and temporary residents, and usually also
meals and refreshments and sometimes other facilities for other users (Medlik, 1994:4).
Hotels are not only places where one can get good food and comfortable rooms, they
are also centers of community life, with facilities for meeting, entertainment,
communication, and personal services. Their stock in trade has always hospitality and
service, and hotels have made dispensing comfort, pleasing the palate, and creating an
atmosphere of home for guests (Henkin, 2001:1).
2.2 Importance of hotels
Hospitality is defined as one of the major industries and one of the largest employers in
the world (Kotler et al, 2003). Hotels play a significant role in the development of
economies and societies, transport, distribution systems, industries and communication
systems of a country though offering facilities for recreation and entertainment, business
transactions, for corporate meetings and conferences. In many areas hotels are also
important attractions for visitors and foreign currency earners, hotels employ labour and
they are product outlets of other industries (building and modernisation are provided by
construction industries, equipment, furniture and others are supplied by various
manufacturers), sources for amenities for local residents (hotel restaurants, bars,
conference halls, party halls) (Medlik 1994).

2.3 Types of Hotels
There are different types of hotels: luxury, resort, commercial, residential. The type of a
hotel determines the target group as well as the location of the hotel. In this way, the
hotel will be located closer to the guests and areas which make up most of that market.
The following classification, suggested by Medlik (1994) and Page (2007), describes the
main types of hotels, dividing them according to various criteria:
Location According to location, hotels can be in cities and towns, countryside hotels,
coastal and mountain resorts (Medlik, 1994).
Actual Position According to hotels actual position, it can be located centrally, in the
suburb or near the motorway (Medlik, 1994).
Transport According to the location of the hotel in the area close to transport, it can be
a railway hotel, sea pot hotel, air port hotel (Medlik, 1994).
Seasonality Depending on the season (high season or low season), there are seasonal
hotels which can have high or low demand during some months of the year. Ski resorts
in summer or sea resorts in winter can be confronted by the problem of seasonality
(Page, 2007).
Purpose of Visit According to the purpose of visit or the reason the hotel guests stay at
this particular hotel, it can be business hotel, tourist hotels, holiday inn, convention hotel
(Medlik, 1994).
Length of Stay According to the length the guests stay at a hotel, the hotel can be
transit or residential (Medlik, 1994).

Range of Facilities and Services According to the facilities and services a hotel offers,
it can be open to residents and non-residents, it can provide overnight accommodation
and breakfast, and thus be a htel garni or apartment hotel (Medlik, 1994).
License for Selling Alcohol The availability of the license for selling alcoholic liquors
in a hotel is an important factor in the scope of services provided in a hotel, thus the
hotel can be licensed and unlicensed (Medlik, 1994).
Size According to the room or bed capacity, the hotels can be determined as big with a
few hundred of beds, medium-sized with about two hundred beds, and small with less
than a hundred. The concept of the size of the hotel is very relative and depends on the
country and the location of the hotel (Medlik, 1994).
Scale The hotels are distinguished according to their scale. One of the hotels grading
systems is dividing them into different scales: budget, economy, mid-scale, upscale,
upper upscale hotels. And, in most countries, either the scale or the number of stars or
both are used as an indicator of the standard of services and quality: for example, five
stars and one star hotels provide respectively the luxury services and the most basic set
of services (Medlik, 1994), (Page, 1997).
Ownership and Management The hotels can be owned by individual independent

person, a hotel consortium or cooperative, as well as can belong to hotel chain and be
owned or franchised by a company (Medlik, 1994).
2.4 The Hotel as Total Market Concept
According to Medlik, (1994:14) hotel is an institution of commercial hospitality,

which sells its services in various combinations. Hospitality is a product, which is
depicted from the main factors that affect the way this product is constructed,
represented and sold to customers (Page, 2007). In order to determine and preserve the
market segments, hotels develop some attributes, which Medlik calls the elements of the

hotel total market concept, and includes five elements (hotel location, facilities, services,
image and price) (Medlik, 1994). Page adds to this list the ability to differentiate the
product to different customers (Page, 2007).
Location of the Establishment Facilities Service
The Accommodation Product
Ability to Differentiate the

Product to Different
Customers and Incentives
Image Price to Encourage Key Clients
Figure 2. Hotel as Total Market Concept

Source: Page, 2007
Figure 2 displays the elements which constitute the total hotel concept. The combination
of these factors meets the demands of customers and provides them with the
accommodation they seek (Page, 2007).
2.4.1 Location
Hotels are in direct contact with their customers; they produce and provide their services
right at the point of sale. That is why these services must be offered, where the demand
exists. Location is the part of hotel product (Medlik 1994:8).
The geographical location of a hospitality property is an important factor. The choice of

the hotel location is determined mostly by the target group the owners of the hotel want
to focus on; and vice a versa, the target group is determined by the location of the hotel

(a business area, the sea coast, the mountain area, the country side). The strategically
significant location makes the hotel more accessible and convenient for its customers
(Medlik, 1994). Go and Pine state that the location determines the destination and
hotels position within this destination (Go and Pine, 1995:10). As a matter of fact
hotels, located in the city centers serve business travelers, and resorts cater leisure
travelers. But this distinction is blurred nowadays (Go and Pine, 1995), as, for example,
many hotels are oriented on a few segments, and holiday resorts can provide facilities for
conferences and meetings, as well as urban hotels can offer special services for families
with kids during weekends and serve the business customers during the weekdays.
Jones (Jones in: Buhalis and Costa, 2006) forecasts the location trends for future, saying
that hotels will be built in urban centers mainly for business travelers, in resort areas
mainly for leisure travelers, and alongside the major transportation networks, such as
airports, train stations, motorways. Some destination-based concepts use the location as
the unique selling offer.
2.4.2 Facilities
Most hotels provide the standard set of facilities, which include bedrooms, restaurants,
bars, function rooms, meeting rooms, as well as recreation facilities, such as swimming
pool, sauna, golf fields or tennis courts (Medlik, 1994).
2.4.3 Services
Every hotel offers a set of services (type of the hotel determines the range of services)
which are provided through hotel facilities. The quality of services is determined by a lot
of factors, such as time of service delivery, the work and behaviour of personnel
(Medlik, 1994). For hospitality service production the past experience of doing things is
not enough; the workers are continually faced with novel situations that require unique
methods to react appropriately to the customer. The delivery of hospitality services
Julia Smolyaninova - 10 - (MA) European Tourism Management

requires a high capacity to process information (Bowen and Ford, in: Jayawardena,
2004:7).
2.4.4 Image
The image is the way the hotel presents itself to the customers and the way it is being
perceived by the customers (Medlik, 1994). The strong image of the hotel raises
customer confidence and trust in its accommodation and amenities. Customers
perceptions of the hotel affect their expectations, their reactions to its offers. Hotel image
depends not only on functional attributes of price and convenience (Michman, 1995).
The image is created by the hotel location, by the services and facilities it provides, and
it is also affected by such elements as the hotel brand, name, appearance, atmosphere,
architecture, interior design, colors and advertising.
2.4.5 Price
Price, as a matter of fact, indicates the value and is determined mostly by the hotel scale,
location, image, the set of facilities and quality of services (Medlik, 1994).
2.4.6 Ability to differentiate the product
Ability to differentiate the product to different customers and incentives to encourage

key clients includes the development of different customer loyalty programs (Page,
2007), or other strategies for attracting and retaining the customers. Jones (Jones in:
Buhalis and Costa, 2006) call this differentiation ability brand development. Because
hospitality markets are becoming more and more segmented and the customers have
more choice concerning the various types of accommodation and services, the hotel
company creates the brands in order to differentiate the hotel from its competitors and
that can be easily recognizable and distinct from others. Medlik (1994) does not include
this element to the hotel total market concept.

The importance of these elements can be varied, depending on the needs and interests of
the customer. However, these elements are interrelated (Medlik, 1994).
Chan and Wong (2005) in their research mention that such intangible hotel attributes as
security, dependability, service quality, reputation and staff behaviour and tangible
attributes as price, the appearance of facilities, location, the presence of alternatives,
word-of-mouth communication, advertising, a familiar name and past experience were
identified by a lot of researches as the most desired by hotel users. But they also mention
that the most determinate factors are convenient hotel location and overall services.
2.5 Summary to Chapter II Part One
In Part One, the types of hotels, as well as their importance in the modern world were
highlighted. Medlik describes the hotel concept in a simplified form, including only the
main needs of the customers which are met by most hotels. The customers needs are
mostly brought to a place to sleep, food and drink, and to food and drink for organised
groups of people. Thus the main requirements of the guests, which are defined as the
principal hotel products, are accommodation, restaurants, bars and functions (Medlik,
1994:16).
Every hotel product consists of the components of location, facilities, services, image,
brand and price, which are aimed to meet the needs of the customer. The total hotel
concept location, facilities, services, image, brand and price can be further
subdivided into categories in accordance with the needs and desires of customers
(Medlik, 1994). In the following part the marketing strategies will be examined and it
will be shown how the above mentioned factors are emphasized to define market
segments.

Chapter II Part Two Marketing Strategies: Segmentation, Target
Marketing, Market Positioning and Differentiation
Strategy is defined as a major determinant of business. The critical element is to have a

clearly defined business with a distinctive image serving the needs of a specific market
segment (Go and Pine, 1995:29).
In order to understand and analyze the market, it is important to understand the concepts
of differentiation, segmentation and target marketing. These tools help the hotel to
outstrip the competitors, focus the marketing efforts and thus meet the needs and desires
of customers. As Lewis and Chambers (1989) state, these concepts are different, but still
interrelated, as they are involved in the product marketing.
2.6 Hotel Market Segmentation
Market segmentation is the process of breaking down the heterogeneous tourist market
into relatively homogeneous segments (Go and Pine, 1995:79); it is a strategy
complementary to market differentiation. Market segments are the homogeneous groups
of people, that have the same needs and wants on one or more dimensions (Lewis and
Chambers, 1989:204). Zineldin defines segmentation as the division of a market into
different groups of customers having similar desires and needs, sharing similar buying
approaches, are substantial enough to be profitable, and can be defended against
competition (Zineldin, 2000:75). Stroud (2005:103) states that market segmentation
divides consumers into smaller groupings of likeminded individuals to create better
consumer strategies, leading to better research, product development and
communications. all aspects of marketing improve by having a better understanding
and more refined focus on the customer. Segmentation, according to Paley (2001),
helps to strengthen the market position of the company, direct the strengths against the
weaknesses of competing companies. Every market segment requires different services.
As Dolniar affirms, segmentation defines the following strategies and activities of the
company concerning the offered product and service, advertising strategy, it affects the
choice of distribution channels, pricing policy, etc (Dolniar, in: Crouch, 2004).

According to Kotler et al (2003), market segmentation is the first of the three major
steps in target marketing.
Market Segmentation Market Targeting Market Positioning
1. Identity bases for 3. Develop measures 5. Develop positioning

segmenting the market of segment for each target
2. Develop profiles of attractiveness segment
the resulting systems 4. Select the target 6. Develop marketing
segment(s) mix for each target
segment
Figure 3. Steps in Segmentation, Targeting and Positioning

Source: Kotler et al, 2003
There are different approaches to the concept of segmentation. Seaton (Seaton, in:
Seaton and Bennett, 1997), referring to Smiths categorization, grouped all the ways of
segmenting into two bigger categories:
Segmentation based on trip descriptors
Segmentation based on tourist descriptors
2.6.1 Segmentation Based on Trip Descriptors
This type of segmentation focuses on describing the person, and not the type of trip
he/she takes. The four basic segments are identified: recreational pleasure, visiting
friends and relatives, business, other (Seaton, In: Seaton and Bennett, 1997). Go and
Pine (1995) single out two main segments: pleasure travel and business. Pleasure travel
segment is considered to be the largest segment, which includes the people with different
travel purposes (visiting friends or relatives, educational trips, treatment), long- or short-
term (from one day to a few years). This segment is more price-sensitive and thus easily
influenced by economic conditions. The pleasure market segment consists of several sub
segments: package tour, free independent traveler, the resort segment, the senior

segment, the singles segment, the teenage segment, the eco-tourism, adventure segment
(Go and Pine, 1995).
Alongside with the pleasure travel market segment, Go and Pine (1995) single out the
business travel segment. The focus of the current research is the business segment and it
will be described and examined in more detail in Chapter Two Part Three
2.6.2 Segmentation Based on Tourist Descriptors
The most common variables, approved by such researchers as Lewis and Chambers
(1989), Zineldin (2000), Kotler et al (2003), Paley (2005) and others, are geographic
segmentation, demographic segmentation, psychographic segmentation, usage
segmentation (Lewis and Chambers 1989) and, after Kotler et al (2003) behavioral
segmentation. Zineldin (2000) adds to this list benefit segmentation, usage segmentation,
loyalty segmentation, occasion segmentation, segmentation by service. Lewis and
Chambers (1989), include in this list price segmentation, benefit and usage
segmentation. Stroud (2005) identifies age segmentation as an important and sufficient
category.
2.6.2.1 Geographic Segmentation
Segmenting by geographic location is one of the most widespread approaches to

segmentation. In terms of geography, the segmentation can be by country, region, city,
town, part of city, even neighbourhood (Lewis and Chambers, 1989), urban, suburban,
rural, by population density, city size, climate (Paley, 2001).
This strategy can be easily implemented, as individual segments can be clearly defined
on a map (Paley, 2001:130). There are differences in climate conditions, availability of
transport means, regional customs and traditions, habits, which make it easier to
understand, explain and predict behaviour and expectations of the customer in this
particular segment. This segmentation is efficient if the needs and buying patters are

reflected (Parley, 2001) and by analyzing the segment such factors as population, ethnic
mix, growth, income, discretionary spending, household size and others are taken into
account (Lewis and Chambers, 1989). The risk in this strategy is that while developing
and targeting market efforts in one area, the company can ignore other areas and buyers.
2.6.2.2 Demographic Segmentation
Demographic segmentation is considered to be the most widely used, as demographic

factors can be easily measured and classified by sex, age, family size, family life cycle,
racial or ethnical belongingness, religion, education, income, occupation (Paley, 2001).
For the hospitality industry, however, it can be tricky as Lewis and Chambers note
(Lewis and Chambers, 1989), as the age, the similar income, the marital status, and
having kids do not separate a college professor, a lorry driver and an accountant, whose
needs and expectations can be different. The demographic lines become blurred and not
always the income of the person can reflect his preferences and expectations from the
product or service. In this case the company should understand the meaning of the
demographic factors and their relation to other segmentation basics.
2.6.2.3 Psychographic Segmentation
Lewis and Chambers state that psychographical variables are based on attitudes,
interests, opinions, self-concepts and life-style behaviors (Lewis and Chambers, 1989),
personality, self-image and cultural influences (Paley, 2001). The psychographic
analysis helps the marketers and strategic developers to understand what the customers
want and to work out the appropriate approaches that will conform to the life styles of
those particular groups of people.
2.6.2.4 Usage Segmentation
According to Kotler et al (2003) usage segmentation is a part of behavioral

segmentation, which is based on the knowledge of people, attitude, use, or response to a

product. Lewis and Chambers (Lewis and Chambers, 1989) consider that the usage
segmentation is the more appropriate approach for the hospitality industry and covers a
range of categories:
Purpose
Frequency
Purchase size
Timing
Nature of purchase
Where they go
Variety seekers
Purchase occasion
Heavy, medium and light users
Purpose is a common segment and it consists of two categories, such as business

purpose, submarkets of which are different: conventions, associations, corporate,
expense account, etc. These subcategories are of great importance as depending on the
purpose of their stay, be it a conference, or a corporate meeting, the needs and
requirements will vary.
Another category is social or pleasure or leisure purpose. To this market the travelers
with different purposes, other than business, can be referred.
Frequency segments deal with usage regularity. The customers come back to the hotel
and remain loyal (this category is also referred as loyalty segment). For a commercial
hotel, as Lewis and Chambers demonstrate with an example (Lewis and Chambers,
1989), the frequency of usage can be high (once in a month), for a resort (once in a year)
and low, which is as an important segment as the customers may, for example, use the
hotel once a year, but come in a big group, which is very profitable for hotel.
Purchase size is the segment, which is represented by the people who are also called
big spenders. In hotel the people of this segment use expensive rooms or suites, eat at

the hotel restaurants, give big tips, uses the expensive service s and facilities of the hotel
(Lewis and Chambers, 1989).
Timing has to do with periods of the calendar: days, weeks, months, seasons. Timing
consists of two subcategories: low season and high season. Some people seek for
quietness and rest, and prefer to stay at a hotel when there are almost no other guests.
But this segment is also important for the hotel (Lewis and Chambers, 1989). Timing
segments can be based on the time the customer buys the service. For example, for some
international conferences or trade fairs the hotels are booked a few years in advance.
Nature of purchase can vary and it depends mostly on the character of the person.
Customers are commonly divided into three categories of convenience (buying product
or service if it is convenient for them), impulse (buying without fore thinking or
analysing if they need it or not) and rational (buying only after thorough deliberation)
buyers. Impulse buyers often pay extra for the rooms with views or buy expensive wines
and order room service. Rational buyers need more information and explanation about
the service, and buy it if they decide it is really worth it (Lewis and Chambers, 1989).
Where they go is the segment, the representatives of which regularly go to some

particular destinations. They might prefer, for example, the hotel to be close to the train
station, or some famous district. They dont look for innovations, but prefer to stay at a
tried and tested reliable place (Lewis and Chambers, 1989).
Variety seekers, as opposite to the previous segment, look for innovation and some new
experiences (Lewis and Chambers, 1989).
Purchase occasion is the group of people which use services only on some occasions or
events, such as wedding parties, anniversaries. Some business people often stay at hotels
when they are on business trip, or participating in some event, but they might rarely or
never stay at a hotel when they are on leisure trip (Lewis and Chambers, 1989).

Heavy, medium and light users are different segments which reflect how often they
use the product or service. Hotels mostly tend to please heavy users and adjust the
facilities according to their preferences. But this strategy can be risky and have negative
effect and lead to loss of other users (Lewis and Chambers, 1989).
Each of the segments has particular needs and expectation, and some of them are very
similar or common. A hotel can serve all the segmentation groups mentioned above,
which is quite complicated, but is possible and reflects the complex nature of the
hospitality business. It demonstrates that focusing only on broad segments as business or
leisure can lead a hotel to a difficult situation, because the hotel, as a matter of fact, can
not afford use the same approach to all people. User segments are more narrow and
predictable in distinct from the psychographic, demographic and geographic
segmentation, as its possible to know what influences them (Lewis and Chambers,
1989).
2.6.2.5 Benefit Segmentation
Benefit segmentation relates to the benefits the customers get when using the product or
service. This approach is focused on the question why the customers buy this product or
service, and not, for example, who buys it, as in demographic variable (Zineldin, 2000).
These benefits, the customers get, can be prestige, comfort, suitable price, safety and
quietness, friendly atmosphere. The weakness of this category, as well as the
psychographics, is that it is difficult to measure it. But on the other hand, once the
measurement is reliable, the desires and expectations of this group can be easily
predictable.
Benefit segmentation is a market-oriented approach, which seeks for the reasons, why
the customers need and buy this particular product or service. The research of benefit
segment of business customers made in Scandinavian hotels revealed that business
people do not perceive the hotel homogeneously and that the expectations of people
were different. That research showed the strength of the benefit segmentation and also

incorrectness of treating business people as one broad target group (Lewis and
Chambers, 1989).
2.6.2.6 Price Segmentation
Price segmentation is also benefit segmentation, but more visible and tangible (Lewis
and Chambers, 1989). Nowadays hotels are segmenting a lot on prices. There is price
difference not only between classes of hotels, such as upper scale and middle scale, but
also within the scale, such as upper upscale, middle upscale. This slight difference is not
always considered as segmentation, as the customer prefers to pay more mostly because
of the intangibles, such as service, prestige, professionalism. But on the other hand, for a
lot of customers, price is an important factor, which is almost always is taken into
consideration and influences their choice of a hotel (Lewis and Chambers, 1989).
Parasuraman, et al (1990) urge that the room price in the hotel must depend on the
segment, which allows the customers to categorize themselves to the appropriate
segment, based on their needs, behaviour, willingness to pay.
Summarizing the above described methods of segmentation it is essential to note, that

most effective market segmentation involves multi-dimensional measures. Depth and
diversity of analysis are necessary for identifying the niche markets that may exist in
apparently homogeneous mass markets (Schlentrich, in: Seaton and Bennett, 1997:47).
Figure 4 illustrates the combination of different categories of segmentation:

segmentation into business and leisure traveler (trip descriptors), and segmentation from
benefit perspective (tourist descriptors), where the motives for different hotel market
segments are depicted.

Travelers Requiring Hotel Accommodation
Purpose of Trip
Business Traveler Leisure Traveler
Travel Mode Travel Mode
Independent Group Independent Group

Destination
Destination
Destination
Destination
In-transit
In-transit
In-transit
In-transit
Figure 4. The Hotel Market from the Business/Leisure Perspective and Benefit Segmentation
Source: Go and Pine, 1995
Marketing strategies must be based on the principle of marketing concept, namely on

satisfying needs and wants of the customer. According to Michman (1995), a lot of
hotels failed to satisfy their customers as they did not focus on some specific markets
and thus failed to satisfy these markets. It is not enough just to provide accommodation
and some facilities, without specifying the services and amenities for some particular
market segments.
Market segmentation requires a thorough scientific approach and the relationship

between the segmentation and market strategies should be analysed. Market
segmentation has become necessary because of increasing competition. As Lewis and
Chambers (1989) state, the use of only differentiation as a market strategy can be
effective, but can as well lead to high costs by obtaining a market position. Market
segments are considered to be more stable and long-term, because they are in direct
relation with customer needs and the methods, these needs can be satisfied.

2.7 Target Marketing
Target markets are derived from segments, but as distinct from segmentation, focus on
more narrow groups of customers, on specifically one part of the market (Lewis and
Chambers, 1989). An illustrative example here can be the business traveler segment,
which is quite broad, as it may include the people from different spheres of business:
salespeople, account travelers, self-employed all these people have different interests
and thus different expectations from services in hotels, thats why should be divided into
different subsegments, which are target markets.
2.8 Market Positioning
Strategic position deals with impacts of the external environment on the strategy, with
strategic capability of the company (various resources) and the expectation and
influences of stakeholders (Johnson et al, 2005). Market positioning is based on the
market segmentation and market targeting, as they define to which market the
positioning is directed. Market positioning is the third step in the target marketing and it
deals with developing a competitive positioning for the product and an appropriate
marketing mix (Kotler et al, 2003:264). Positioning is creating the image of the product
in customers minds (Lewis and Chambers, 1989). A products position is the perception
of customers about the product based on its various attributes. Marketers choose the
positions which, in their opinion, will be successful in the selected target market, and
then create the marketing mix to gain this position (Kotler et al, 2003). When the hotel
marketers understand the target market, know about the images the customers have
about the perfect stay at a hotel, the process of developing the positioning strategies can
be effective.
There are two types of positioning: objective positioning and subjective positioning
(Lewis and Chambers, 1989). Objective positioning deals with creating the image about
the product with concrete, objective attributes. Objective product positioning in hotel can
be the availability of some specific facility, on which the hotel can be positioned and that

the customers can find only in this particular hotel (atrium lobby in Hyatt Hotels).
Budget hotels, for example, are positioned on the low price. The most important factor
of effective positioning is uniqueness of the product or service (Lewis and Chambers,
1989).
Subjective positioning deals with creating the image of a product based on subjective
attributes of a product or brand. Subjective positioning is the perceived image that
belongs not to the product but to consumers mental perception (Lewis and Chambers,
1989:261). These perceptions and the images not always reflect the real physical
features of the product.
Kotler et al (2003) identify two other categories, which are similar to the above
mentioned. First, the positioning of the product based on its specific attributes, both
objective (price, location) and subjective (fun place, meeting place for singles). The
second category is positioning the product against an existing competitor that positions
that product highlighting its difference from similar products in the market.
Moutinho (Moutinho in: Witt and Moutinho, 1994:333) notes, that positioning is
efficient only if it affects the target market segment, and summarizes the categories of
product positioning. Product position can be based on specific attributes or features; on
the benefits the customers get by using this product; on specific usage (which also
relates to benefit positioning); on user category; against another tourist product; tourist
product class dissociation (which is effective by introducing a new product distinct from
others in the product category); a hybrid positioning strategy, combining a few of the
above mentioned categories and usually requiring multiple branding strategies.
2.9 Choosing the Strategy for Hotel Positioning
Positioning process consists of three stages. First of all, the marketers identify a set of
possible competitive advantages on which the position can be based, then select the most
appropriate competitive advantages and, at last, communicate and deliver the developed

position to the target market (Kotler et al, 2003). A hotel can differentiate itself from
others and gain competitive advantages, but offering unique product or the same product
as competitors but with some peculiarity in price or other attributes.
Utrasun and Gutirrez (2005) consider, that establishing the hotel and defining the
positioning strategy requires a decision, whether this hotel will conform the position of
the competitor or will be differentiated. The researchers also note that combination of
both strategies is possible. Locating the hotel close to competitors and positioning the
product similar to others can become an advantage because of the economic and
institutional environments. On the other hand, locating the new hotel far from its
competitors in geographic and product aspects will help to escape the local competition
and achieve the competitive advantage. A new business should differ from its
competitors on those dimensions in which localized competition would erode its rents
and should conform to competitors on those dimensions that offer the potential to deliver
agglomerative and legitimacy rewards (Utrasun and Gutierrez, 2005:385).
2.9.1 Differentiation
According to Porter, differentiation is a strategy, when the company attempts to be

unique and different from other companies, when producing the similar product or
service, in the attributes (one or a few) significant for the consumer (Porter, 1998).
Lewis and Chambers define the concept of differentiation as, simply differentiation of
your product from those of others for the entire potential market (Lewis and Chambers,
1989:197). That is making the product distinct from the one of competition, so that
demand meets the supply.
The challenge of the marketer is to make the product unique and show the customer that
this particular product or service is of high utility, has better price value, better quality,
and can become a better problem solution (Lewis and Chambers, 1989). As Porter states
(1998:263), differentiation can be based on the product itself, the delivery system by
which it is sold, the marketing approach and a broad range of other factors. The

differentiating strategy in the industry is considered to be successful if its price premium
exceeds the costs of differentiating (Porter, 1998).
2.9.2 Differentiation in Hospitality
There are a few types of differentiation based on physical attributes (physical design of
the building and environment of the hotel), service (particular services in a hotel, such as
in-room check-in, special reservation systems), personnel (customer-contacting people
should be specially trained and have particular skills of communicating with clients,
quickly reacting to their request, be respectful, accurate, considerate). They can also be
differentiated, for example, with their elegant dresses or special uniform), location
(convenient location close to transportation means, sightseeing, business organisations,
industries) and image (the message of the company or brand image should communicate
the products main benefits and positioning. The strong image can be imparted through
advertisements, by services a hotel offers, by its brand, location, personnel) (Kotler et al,
2003).
Lewis and Chambers (1989) assert that differentiation in hotel industry is internal, as the
product is used right on the place and is mostly intangible. It is difficult to show to the
customers of the hotel that this particular hotel is different from others, as the hotel
building, hotel rooms and other facilities can be very similar to the ones in thousands of
other hotels. Michman (1995) supports this theory, saying that difficulties in marketing
of services arise because of their intangibility. A lot of hotels, which offer unforgettable
accommodation and services, can not really demonstrate these in a tangible way.
The intangible things, such as service, friendly atmosphere, can be the differentiating
attributes. In this case, it is a challenge to the hotel to communicate to the customer
through advertisements about the peculiarity and uniqueness of the hotel, and create the
perception that this hotel is different from others. This situation, though, impedes
promotion. Therefore, as Michman affirms, image is an important factor in the process
of differentiating the product from the competitors (Michman, 1995).

In order for differentiation to be effective, it should be meaningful and required by
guests. As Lewis and Chambers show in the example, the research in the Days Inn
revealed, that guests prefer the in-room coffee service to the standard amenities such as
shampoo, soap and others. As Levitt (Levitt in: Lewis and Chambers, 1989) points,
producers of goods and services tend to be different from competitors in features that
can be visually or measurably identified, cosmetically implied, or rhetorically claimed
by reference to real or suggested hidden attributes that promise distinction from
competitive goods (Lewis and Chambers, 1989:203).
Concluding the above said, product differentiation, according to Lewis and Chambers
(1989:203) is any perceived difference in product when compared with othersit
provides an opportunity in competitive strategyand it forms the basis of positioning
strategy. Product differentiation, as a positioning strategy can be based on physical
attribute differentiation, service, personnel, location and image differentiation.
2.9.3 Selecting the Competitive Advantage
After discovering a few potential competitive advantages, the hotel marketers should
focus on the ones, on which they will base their positioning. Some marketers suppose
that the company should promote actively one benefit, and make their brand famous or
unique based on this feature (Kotler et al, 2003). Others consider that hotels
should position themselves on a few differentiating factors. A hotel, for example, may
claim that it offers the best price and services in its scale.
Not all the brand differences are valuable, advantageous and can be used as a positioning
attribute. By analysing the available differences, the hotel marketers should consider if
they are important, distinctive, superior, communicable, preemptive, affordable and
profitable (Kotler et al, 2003).

The next step is communicating and delivery the selected position to the targeted
markets. All the marketing mix activities (price, product, promotion and distribution)
should be directed to support the positioning strategy (Kotler et al, 2003).
2.10 Summary to Chapter II Part Two
Product differentiation, market segmentation and target marketing, applied all together
or separately, are crucial and essential for successful positioning of a product and
developing a marketplace. Product differentiation applied as a positioning strategy can
be based on physical attribute differentiation, service, personnel, location and image
differentiation. In order to get the market share the hotel marketers should discover a few
competitive advantages and base the positioning on one or a few unique attributes.
In order to select the positioning strategy it is important to understand the market

segment and define the target markets on which the hotel is focused. In the following
part the business traveler market segment will be analysed.

Chapter II Part Three Market Segment: Business Traveler
Defining a market segment is a prerequisite of success as the company recognizes the

needs and compatible target markets. This helps to produce a proper service, at a proper
time and for the people who need it.
Business travel market segment is represented by the business travelers. Business

travelers are the people traveling for purposes which are related to their work
(Davidson in: Swarbrooke and Horner, 2002:3). As Page (2007) notes, business clients
seek for time-savings, very demanding concerning services, facilities and time, but less
price sensitive than leisure travelers.
2.11 Target Markets of the Business Travel Market Segment
Business users of the hotels are the employees of organisations, who come to some place
in order to participate in the activities related to their job. They usually take part in some
meetings and conferences, visit some exhibitions and trade fairs. They use the hotel
because of accommodation and food, and also for functional purposes, such as
conference and meeting, or entertainment and relaxation (bar and swimming pool).
Their demand for accommodations tends to be town- or city-oriented, non-seasonal and
less price-sensitive, except in case of some event attractions such as conferences and
exhibitions, which may be usefully regarded as a separate category Medlik (1994:17).
There are a few approaches to targeting the business traveler market segment based on
various criteria: the purpose of their trip (meetings, conferences, educational courses,
etc.), the number of travelers (individual of group), frequency of travel (daily, weekly,
monthly), distance (local, national, international), duration of trip (long-term or short-
term), lead-in time to plan trip or event (hours, days, months, years), degree of
compulsion on business traveler to take a trip (obliged, some choice), business travel as
an element of ones occupation (business travel is an essential part of work, business
travel as a reward for good work, little or no business travel involved in job), who makes

the decision on travel destination (traveler, employer, client organisation, partner
organisation, external organisation such as exhibition organizer) (Swarbrooke and
Horner, 2002).
The approach to target marketing described in this research is conceived from

Swarbrooke and Horner (2002). The authors suggested the following typologies based
on the purpose of travel:
Meetings, Conferences and Conventions
Exhibitions
Training Courses
Product Launches
Incentive Travel
Meetings, Conference and Convention
Davidson (Davidson, in: Swarbrooke and Horner, 2002:5) defines meeting as an

organised event that brings people together to discuss a topic of shared interest In the
meeting a few persons or a few hundreds of people can take part and the meeting can
endure from a few hours to a few weeks. Meetings, as opposed to conventions and
conferences, are identified as smaller gatherings of people. These meetings are usually
planned not long in advance and they can be organised by travelers themselves, by travel
service department, etc (Swarbrooke and Horner, 2002). Conferences and conventions
are considered to be bigger meetings (Swarbrooke and Horner, 2002), usually held
annually and consist of general sessions, committee meetings, special interest meetings.
Associations choose the convention place and make the appropriate bookings and
planning a few years before (Kotler et al, 2003).
Exhibitions
Exhibition is demonstration of goods or services, and they can also be called the trade
fairs or expositions (Swarbrooke and Horner, 2002).

Training Courses
These are events, when people meet in order to participate in some educational programs
or courses (Swarbrooke and Horner, 2002).
Product Launches
Events organised by a company in order to represent a new products. These events are
usually not long, but involve a lot of participants (media, clients, sponsors, etc) and also
very large budget (Swarbrooke and Horner, 2002).
Incentive Travel
Incentive traveler is a business tourist who uses the leisure trip as a reward for good
performance in individual or group work (Swarbrooke and Horner, 2002), (Kotler, et al,
2003).
All these sub segments of business travelers show how much different their needs can be
during the business trip, and that is why the approach to these different groups within a
broad segment business travelers should be individual. For example, some of them
(participants of meetings, conferences, and conventions) need meeting and conference
facilities during their stay at a hotel. Or, if the event lasts a few days and they also stay in
a hotel a few days, they might need more facilities (swimming pool, sauna, bars) than
those who stay in a hotel only one or two days. Product launches travelers might only
use the facilities of a hotel (meeting rooms, conference halls, restaurants), and not use
accommodation at all.

2.12 Description of the Business Travel Market
Hotel is a supplier of business travelers demand. As Lewis and Chambers claim (1989),
the business traveler market is the most desirable for the hospitality. There are a few
reasons for that: first of all, it is the largest major segment, secondly, its the least price-
sensitive market. Business traveler is a customer who is utilizing the product because of
a need to conduct business in a particular destination area (Lewis and Chambers,
1989:233).
The sources of demand of business people can be either institutional or transit.

According to Medlik, institutional source of demand are the industrial and commercial
enterprises, governmental organisations, educational institutions and other
establishments in the public and private sectors, which are involved in the economic life
and administrative activities of the society (Medlik, 1994). Transit source of demand
arise from individual or group travelers which use the hotels as transit accommodation,
that is, the destination of their interest is not the area where the hotel is located.
2.12.1 Decision-making and Hotel Selection
As Chan and Wong (2005) claim, for business guests most important factors by selecting
a hotel are the image of the hotel, service quality and security. Not less meaningful
attributes are convenience for their business and work, positive reputation of the hotel,
friendly atmosphere.
Chan and Wong (2005) in their survey identified the factors affecting the hotel selection
by the frequent travelers, into which the group business people are also included. The
research revealed the following data: the most important factors appeared to be
convenient hotel location, their past experience of staying at the selected hotel, the
membership in some customer loyalty program, reputation of the hotel, good service
provided by the hotel stuff, the availability of various facilities as a swimming pool,
sauna, fitness center, restaurant providing food of different cuisines.

The sources, from which the guests get the information about hotel, are the following:
recommendations of travel agency, by the company, by friends or relatives. A lot of
guests also use travel magazines, web sites as the sources of information (Chan and
Wong, 2005).
2.12.2 Priorities of a Business Traveler
Location
The priority of business people concerning the hotel has always been location and
cleanliness (Lewis and Chambers, 1989). Since nowadays the cleanliness is not anymore
an issue in most of the hotels, especially in midscale and upscale, business people prefer
to choose the hotel, which is most conveniently located, close to the area of their
business. Even if some facilities in the hotel do not meet their needs, but the hotel itself
is appropriately located, business people would most probably select this hotel.
Price
As Page (2007), Lewis and Chambers (1989) and other researches note, the business
market segment is less price-sensitive. But considering the fact that organisations tend to
reduce the expenses for business travel, price is still taken into account. When the
location and services in the hotel are satisfying, the price becomes a decisive factor in
selecting a hotel. Nowadays price has become an important issue for a lot of business
travelers. Most of organisations have contracts with hotels, in which they discuss the
prices and conditions, according to which the business travelers can get a suitable price
for hotel rooms, get discounts and various bonuses that they can later use for their
individual purposes. On the other hand, if the price in the hotel is significantly higher
than the one of competitors, the choice will be made towards the lower price. Thus, the
hotel can obtain the market share

The organisations usually have contracts with a few hotels or hotel chains in some
particular area. As a matter of fact the price is not very different and the facilities and
services in these hotels are approximately the same. In this case business people prefer to
stay at the hotels, in which they can get points and use them later, for example, for
private stay with a family.
Facilities and Services
As it was mentioned above, the facilities and services are important for business clients
and can affect their choice of this or that hotel. Hill (1995:96) quotes Jim Evans, the
senior marketing vice president of Hyatt Hotels, who said that business travelers of
today are not only expected to meet their objectives when they travel but also to stay in
touch with what's going on back in the office. There are some facilities and services
which have become a must in a hotel, such as wireless Internet access in the room,
conference and meeting rooms, writing desk, access to copy and scanning machines, fax,
projector, communication facilities and many others. Blank (2005) agrees with that
statement, saying that business people require more advanced technologies and
amenities, which challenges a hotel to develop and adapt to new trends in technology
and business.
The conference rooms in hotels have become concurrent and a lot of hotels specially
build and design them including all the necessary conference and meeting facilities, such
as high quality audio-visual systems, air purification and air conditioning, lightning
equipment, multifunctional chairs and tables, etc (Go and Pine, 1995).
Nowadays more and more hotels try to create the business environment in a hotel
applying various facilities, such as a bed transforming into a couch, which gives more
space in the room and creates the atmosphere of an office. Marriott uses the concept of a
Room That Works, which includes different facilities necessary for business purposes.
According to the survey made by Marriott Group, more than 70% of business travelers
used their room as an office while being on a business trip (Hill, 1995). That is why the
concept of room is an important element in hospitality. In the year 2006 Starwood Hotels

announced about their project of upscale extended stay, according to which studios
and bed-room suites are to be redesigned into residential accommodations with kitchens,
office space, fitness equipment (Churchill, 2006). Marzella (2007:42) points out in his
research that the majority of business travelers find a premium quality mattress and
premium quality bed linen extremely or very important features when selecting a hotel,
motel or resort for business travel
Two other most desirable services in a hotel are fast check-in/check-out procedures and
billing procedure (understandable, accurate and in time delivered bill) (Lewis and
Chambers, 1989).
2.12.3 Expense Management
Concerning the question who pays for the hotel, which includes accommodation and
very often some services, in the context of a business trip the company pays for its
employees. Most of the organisations provide nowadays their employees with corporate
credit cards, which they can use for paying for accommodation and some facilities, and
some other business purposes when on business trip. As shown at the case study
presented by Business Travel World (2007), the companies are very concerned about
their annual expenses on business traveling and trying to find solution by integrating
different travel booking programs and systems.
2.12.4 Booking Procedure
It is important to differentiate between the individuals who make decisions to buy an

accommodation in a hotel and who pay for it (Medlik, 1994). Business people
sometimes ask their secretaries to book a hotel room, having informed them beforehand
about the necessary or desired location and the preferences concerning the facilities and
services. The booking a trip can also be made by the employees of travel service
department or a travel agency, the partner of the company.

And, as it was mentioned earlier, business travelers usually make reservations in hotels
not long in advance, if they are not going to visit some annual event, but have meetings
or workshops with colleagues and partners, which are usually planned not long in
advance (Medlik, 1994).
2.12.5 Occupancy Rate
The hotels, whose main clients are business people, as a matter of fact achieve the
highest occupancy rates on weekdays, and have fewer guests on weekends (Medlik,
1994).
According to the data represented by Lomanno (2007) in Trends and Stats, the
occupancy rates in luxury, upscale and midscale hotels are growing, and one of the main
reasons of this growth is the dominance of group and transient business travelers during
the week. Blank (2005) in his article notes, that hospitality industry is developing
because of the upturn of the business travelers.
One more reason for increasing hotel occupancy by business people is the increase in the
number of conferences and meetings. As Blank (2005) notes, people prefer to meet and
interact with each other instead of communicating via video conferences, the Internet or
by means of telephone.
2.13 Summary to Chapter II Part Three
The business travel is a large and growing market segment. The business trips are related
to peoples jobs, but still the purposes of these travels can be different: meeting,
conferences, exhibitions, etc. This market is characterized as less price-sensitive, but still
price conscious. Business travelers demand high standard and fully functional facilities
as well as fast and high quality service. The factors, identified on the basis of literature
research, affecting the choice of a hotel are location, price, facilities, services, which

create the image and particular perception about a hotel and make customers remain
loyal.
Location
Image Price
Brand
Hotel
Services Facilities
Figure 5. Factors Affecting the Choice of a Hotel
By studying the literature it was identified that the most important factors affecting the
hotel selection are location, price, facilities, services, which create the image and
particular perception about a hotel brand and attract the customers of various market
segments.
2.14 Summary to Chapter II
The literature review provided the context of the dissertation. In Chapter II the general
concept of hotel and the hotel total market concept were examined and it was concluded
that every hotel product consists of the components of location, facilities, services,
image and price, which are aimed at meeting the needs of the customer and are also
contributers in defining the market segments. Then the different approaches to the
marketing strategies for successful positioning of the product were represented, which
included segmentation, target marketing and differentiation. Finally, the business
traveler market segment was described and such aspects as choice defining attributes,
preferences, needs and expectations of business customers were analysed.

Chapter Three
Methodology
3.0 Introduction
The purpose of the chapter is to represent and analyse the techniques which were used in
the dissertation for achieving the aim and objectives of the research and clarifying the
special approaches of the study. Initially, the selected methods of secondary research
(literature review) and primary research (interviews) will be analysed. The reasons of
using these particular methods will be explained and corroborated with theory. The
advantages and limitations of these methods, as well as the research itself, will be
demonstrated. The method of literature review was used in order to highlight the main
findings and approaches to marketing strategies and the business travel market segment.
The method of interviews was the practical part of the research and helped to reveal the
main tendencies in business travel and preferences of business people concerning hotels
and their facilities. Both these methods helped to analyse the local market, find its
strengths and weaknesses, and thus develop the strategy for positioning a new hotel.
3.1 Secondary Research
Secondary research or secondary sources are defined as data that has already been
collected for some other purpose (Saunders et al, 2003:188) or those sources where
the information has already been sifted and structures by someone else (Preece,
1994:81). Secondary research is usually incorporated into literature review, which refers
to qualitative study. It is especially efficient at the early stages of research process, as it
helps to define the research problems (Preece, 1994), see what has already been found
concerning the investigated areas, different view points and approaches, and reveal the
opportunities and directions for further research. The weakness of this approach, as
Preece (1994:81) ascertains, is that the information from books or other sources is not
wholly truth, as it can present an authors view point and can be subjective. In order to

avoid subjectivity, the author tried to represent a few approaches of different authors to
the same concepts.
In this study the general overview of the hotel concept, the business travel segment and
marketing strategies are outlined, which gives the context and the overall picture of the
researched area.
Secondary research gave the factual ground for the primary research. Veal (1997) states
that this method is less expensive and time-consuming, as one can use the data, which
have already been collected and tested before. The sources used by the author for the
secondary research were books, journals and the data from the official websites of
municipalities, institutions and organisations. In order to collect information for the
theoretical background the author used extensively the electronic databases of Dalarna
Hgskolan and Bournemouth University, as well as the resources of Dalarna Hgskolan
Library.
3.2 Primary Research
Alongside with the secondary research, the primary qualitative research was applied to
collect the practical data and learn about the business peoples experience of staying in
hotels, about the decision making processes, decision affecting factors concerning the
choice of the hotel. As Preece (1994:80) singles out, the essence of a primary source of
information is that it involves the researcher in the direct experience and observation of
the real world.
For the current research qualitative method of investigation was chosen as the most
appropriate, because the aim of the research is not to generalise (as in quantitative
method), but come out with deep understanding of the case, what people need and want,
discover relationships and new opportunities. Qualitative research investigates how the
social reality is produced, experienced, understood, interpreted. It looks at the individual,
subjective qualitative nature and characteristics of the case studied. Social sciences

extensively use quantitative methods to investigate behaviour of people. However, how
people act is a result of decision-making process, which is very complex and variable
from case to case. Thus looking only at the result does not take into account the many
different forces, which in common interaction influence and create the final decision.
Qualitative methods look at peoples behaviour in the light of their background,
experiences, environment, aspirations. These characteristics are especially relevant in
tourism, which pays big attention to tourists motivations, perceptions, attitudes (Veal,
2006).
Qualitative research usually includes only a small number of cases, but goes very deep
inside. The aim of qualitative research is not to come up with general conclusions and
trends representative for a whole population. What qualitative research tries to create is
better understanding of a phenomenon, discovering new relationships, examining factors
included in the process. Data collected by qualitative method are connected with and
relevant for the certain time and place of their collection (Veal, 2006).
One of the qualitative techniques that provides the basis of the primary research is
interview. Jennings (Jennings, in: Ritchie 2005:99) observes that in the latter half of the
20th century and in the early phases of the 21st century, interviews maintain their position
as the research method of choice within the social sciences and, as a consequence, also
within the field of tourism. So much has the interview method dominated that we have
been described as living in an interview society. The interview, the question-answer
interaction, both on formal and informal levels, gives an understanding of the world
values, events, tendencies. There are a few types of interviews, and they all have
different guidelines and approaches, and are based on different philosophical
backgrounds (Jennings, in: Ritchie, 2005).
Jennings (Jennings, in: Ritchie 2005) singles out three types of interviews: structured
interview, semi-structured and unstructured.

Comparison of structured, semi-structured and unstructured interviews
In-depth Interview,
Semi-structured
Descriptor Structured Interview unstructured
Interview
interview
Specific protocol of
Style Conversation-like Conversation
question and answer
Design Structured Semi-emergent Emergent
Researcher stance Objective Subjective Subjective
Researcher
Outsider Insider Insider
perspective
Consequence of
researcher stance Limited reflexivity Reflexivity Reflexivity
and perspective
Exchange issues
during the research Limited reciprocity Reciprocity Reciprocity
process
Informant,
Informant, participant
Language used Subject/ respondent participant co-
co-researcher
researcher
Data, representation, Empirical materials, Empirical materials,
Material/ Data checklist, some slice of life, field slice of life, field
collection open-ended note, transcription note, transcription and
questions and recordings, recordings,
Mathematical and
Basis of analysis Textual analysis Textual analysis
statistical analysis
"Findings" Numeric Deep and thick Deep and thick
expressed as representation description description
Writing style for
Scientific report Narrative Narrative
reporting research
Table 1. Comparison of structured, semi-structured and unstructured interviews

Source: Jennings, in: Ritchie, 2005

Jennings refers structured interviews (the question-answer format) as a quantitative
methodology, and semi- or unstructured interviews (conversation style), as qualitative
methodology. For qualitative interviews the researcher usually apply flexible designs of
questions, albeit prepares plan of questions, elaborate the structure. It results in obtaining
deep knowledge and understanding of the investigated topic (Jennings, in: Ritchie,
2005).
3.3 Interviews
In the current research the type of semi-structured interview was used. Semi-structured
interviews have a flexible agenda or list of themes to focus the interview, although
between interviews with different participants the order of discussion will vary
(Jennings, in: Ritchie, 2005:104). This type of interview allows talking to the
interviewee face to face, following the prepared structure, but at the same time have
more informal and casual discussion, ask different question and direct conversation to
the necessary for the interviewer topic. By the individual interview there is less risk to
get the standard or not full reply; the interviewer can also see the reaction of the
interviewees to various questions, their desire and readiness to reply. The interviewer
can facilitate the behaviour of interviewees by creating a friendly and trusting
atmosphere, and thus helping interviewees to uncover themselves. As the experience has
shown, some people who did not feel comfortable to talk in the beginning of the
conversation and were used to not giving complete answers, by the end of the interview,
just did not want to stop and tried to recollect and share all their experiences during their
stay in the hotel.
The aim of these interviews was:
to underpin the theoretical facts with practice
achieve deep understanding of the problem
reveal the tendencies in the business travel of nowadays, inquire what factors are
determining by selecting a hotel for a business purpose
based on the gained information, find out what positioning strategy can be
successful by establishing a new hotel in Borlnge

The participants for the interviews were the employees of the large Swedish
organisations (SSAB, Stora Enso, Vgverket) located in Borlnge. This choice was
based on the fact that they have experience of business travel. The reason why the author
chose these particular companies was that these companies have their offices and
customers both in Sweden and abroad, thus their employees have experience of traveling
for business purposes. The author also contacted Banverket, the Swedish Railway
Administration, asking for cooperation and participating in the interviews, but got no
reply from this organisation.
In total, twenty seven people were interviewed, and all of them were interviewed
individually. There were three different categories of questions aimed for three groups
of interviewees:
1. The employees who have abundant experience of travelling on business within
Sweden and abroad (twenty persons from SSAB, Stora Enso and Vgverket)
2. The representatives of travel departments responsible for organising trips for the
employees of their company (three persons from SSAB, Stora Enso and
Vgverket)
3. The guests of the companies who come for working or educational purposes to
Borlnge (four guests of SSAB and Stora Enso)
The managers of the local hotels were also contacted in order to get some information
concerning hotel strategies and facilities for business guests. This stage appeared to be
less successful than was expected. Perhaps due to the extreme pressure of work of hotel
stuff, there was no reaction to the assistance requests of the author and meetings did not
occur.
The strengths of these approach is not only in personal interaction with people and
gaining information at first hand, but also in the variety of concepts covered by the

topics of questions, such as the factors affecting the decision making process, hotel
positioning. Additionally, a lot of preferences and tendencies of business customers are
revealed, which can make a determining factor by selecting a strategy for positioning a
hotel.
The disadvantage of this approach is that it is very time consuming, both for an author
and interviewees, as one interview takes from thirty minutes to one hour twenty minutes.
It was also one of the reasons why not many people wanted to participate. Secondly, the
time limitations of the current dissertation did not allow interviewing more people.
Finally, it should be taken into account that the obtained replies reflect the subjective
opinions. But, firstly, what is very important, they are based on the private experience of
people; secondly, after some number of interviews, it was clear that the replies, given by
the interviewees, were only slightly different from the replies to the same questions of
previous informants. That proves that the opinion of a number of people concerning
some attributes in hotels concurred.
According to Preece (1998:121), very little information will be obtained from a rushed,
ill-prepared and unrecorded interview. For the interviews the author has prepared the
four different lists of questions (the questions designed for hotel employees were not
used) assigned for different groups of respondents. During the interviews the author was
making notes (writing down new ideas, impressions concerning reaction of people
during replying some questions, etc) and also used the digital voice recorder in order to
avoid missing any information.
3.4 Sample
As Veal (1997:23) states, it is usually not possible to interview all the people who are in
the focus of research, that is why the process of sampling is necessary. Sample can be
referred as the part of population studied (Finn, et al, 2000). Sometimes the group of
people under investigation can be too big and too variable (for example, business people
who have experience in staying at hotels), therefore the research should be confined to

some narrow group (for example, business people from one particular organisation who
go for a business meeting with their partners and during their trip stay at a hotel). Sample
should not be biased towards any sub-group or characteristics, which can be achieved
by random sampling (Preece, 1998:128).
As far as the interviews are concerned, the author attempted to get a big quality sample
of business people having experience of traveling for business purposes by interviewing
the employees of three large Swedish national companies during a two month period.
Each person was interviewed individually in the English language. Nevertheless, the
author initially planed to include into these interviews more workers from these and one
more big company, but due to methodological problems, only the representatives of
three companies participated in the research.
The total sample size is shown in Table 2.
Company SSAB Stora Enso Vgverket Period
Business People 11 persons 6 persons 3 persons

28th June-
Travel
1 person 1 person 1 person 10th
Department
August
Guests of
3 persons 1 person 0
Companies
Table 2. Interviews Participation in the Research
Notwithstanding that a lot of people were busy or were away on holidays (during the
summer months) and could not contribute to the data collection, the rate of participating
in the interview is comparatively high for the selected methods of gathering primary
information, as the qualitative research presumes a small number of people included
(Veal, 2006). The interviews with hotel managers for obtaining information about the
local hotels and obtaining practical advice from experts, did not occur because of a range
of reasons:
Some hotels did not react to the request of assistance which can be due to
extreme business or disinterest of employees in participating in research

One manager promised to help, but the meeting did not take place due to some
technical difficulties
Possible underestimation of the importance of research in this particular field
In terms of sample selection process the author included the people into interviews
according to the following criteria
Sample Criteria
The employees of organisations who have any experience in traveling for

business purposes
The employees of organisations who participate in organising the business
trips for the employees of their organisation
The independent companies (travel agencies) who organise the trips for the
employees of some organisations
The business travelers who come to the town for business purposes
The competent employees of hotels
Figure 6. Sample Criteria Used for Interviews
The study investigates the viewpoints of every person who has experience of business
travel. The sample criteria is rather broad and flexible, as the aim of investigation is to
get any opinion concerning the experience of staying in a hotel, and thus get deep
information and understanding of business peoples attitude to services and facilities in
hotels and find out what factors are really important for business customers of hotels.
3.5 Limitations
There are a number of limitations in regard to the data of the current study. First of all,
the results of unstructured interviews lack of quantitative data, the quantifiable, reliable
data that are usually general to some larger population (Kline 1999:N/A). Quantitative

method besides counting and measuring includes also the powerful analytical procedures
of statistics and many other techniques, which surely play an important role when
assessing the influential factors and the overall tendency in hotel selection. Additionally,
the fact that only twenty seven people were interviewed, mostly Swedish people, might
be not representative enough to make general conclusions concerning the preferences of
all business travelers. Thus, the involvement of more people, especially from other
countries, could make this research more significant and demonstrative. The choice of
qualitative method is explained by the need of deep exploring a new previously
unknown field. This methodological gap can be filled by further quantitative
investigations.
Due to the fact, that most people were on holidays during the summer months, the
number of participants were smaller than it had been expected. That is why a longer
period of investigation could have increased the sample size and given a deeper insight
into business traveler market. Another limitation concerns the amount and objectivity of
information gained at the web sites and registration documents of the hotels. Chain
hotels sometimes give very little information about particular hotels and their offers that
is separate from the description of the whole group (enumeration of services, facilities,
location, price). Moreover, the information given over there has got mostly advertising
character and does not reflect the real picture of customer satisfaction about services and
facilities in a hotel. This gap was supposed to be filled up by interviewing the hotel
managers, but the interviews did not take place.
Nevertheless, amount and quality of the obtained data are satisfactory, and these
materials can be used as a qualitative base for further research.

Chapter IV
Local Market Analysis
Chapter IV Part One Borlnge: Description of the Area
Borlnge is a town, located on the western River Dal in southeastern Kopparberg County
in central Sweden. The population in the year 2005, according to the data of the
Borlnge Municipal Facts, is 47 000 inhabitants (Borlnge Municipality, 2007).
According to Borlnge Municipality (2007), the three main spheres of business in town
are material technology/sheet metal, transport and LCD technology. Borlnge is an
important industrial center (the steel mill of Domnarvet SSAB (SSAB, 2007) and the
paper mill of Kvarnsveden Stora Enso (Stora Enso, 2007) and the seat of head offices of
the National Rail Administration (Banverket, 2007) and National Road Administration
(Vgverket, 2007).
Annually in Borlnge a few business forums are taking place, which help companies to
establish business in the area, expand the area of their activities or start-up a new
business. The town is also an important commercial center and a famous tourist
destination.
Borlnge has sufficient transport communication with other cities of Sweden and Europe
through motorways, rail way and air traffic (Dala Airport). Dala Airport is a small
airport and serves only few local and international flights, but as far as railway transport
and motorways are concerned, they have very good connection with Swedish and other
cities of Europe. According to the data of Borlnge Municipality (2007), it takes 2.5
hours by car or bus, and less than 2 hours by X2000 train to get to Stockholm, 5 hours by
car or bus, 5.5 hours by train to Gothenburg. By air one can get these cities in 10
minutes. The town of Falun is located 20 kilometers from Borlnge - 15 minutes by car,
25 minutes by rail and bus.

4.1 Attractions in Borlnge and in the Nearby Areas
Borlnge is situated in the tourist region of Dalarna and has a significant historic
meaning for the county.
The town can attract the people with different interests: culture or history, business or
shopping, nature or sport. Besides typical Swedish red houses and numerous barns, huge
lakes and woods, there are a lot of cultural and historical places both inside and outside
Borlnge (Borlnge Turistbyr, 2007).
4.1.1 In the Center of the Town
According to the information of the Borlnge Tourist Board, there are a few museums in
the town which are famous with their unique collections. In the heart of the town one can
find Jussi Bjrling Museum, which is devoted to the Swedish famous tenor, who was
born in Borlnge. The exhibition illustrates the life of Jussi Bjrling and one can find
there the recordings, stage costumes, personal objects and various documents of the
great singer (Borlnge Municiplity, 2007).
CTH-Fabriksmuseum is the Swedens largest hat museum. Framtidsmuseet is the

Museum of the Future with the exhibitions of natural science and technology, and where
one can watch the outer space in Kosmorama Planetarium. Gammelgrden is one of the
largest local heritage societies of Sweden and the birthplace of psalm writer Johan Olof
Wallin. Geological Museum has a collection of minerals, precious stones and fossils
from all over the world. Pylonen Vgverkets Museum is the Swedish Road Authoritys
Museum, with a display of tools and machines which have been used since the beginning
of the 20th century for constructing roads (Borlnge Municipality, 2007).
Aqua Nova is a Swedens water adventure center with different attractions for children
and adults, such as wave-machines, artificial water-falls, slides, and also facilities for
relaxation, sauna, solarium (Borlnge Turistbyr, 2007)

.
Kupolen is the biggest shopping mall in Dalarna region, located in the center of
Borlnge and offering goods from famous Swedish and international brands, as well as
various services (Borlnge Turistbyr, 2007).
4.1.2 Attractions in the Nearby Areas
Amsbergs Kapell, wooden chapel, is located 6 kilometers north-west of Borlnge. It was

founded in the 1600s and its main attractions are the unpainted pews with carved candle-
holders. Ornasstugan, which is located 8 kilometers north-east from the town, is one of
the oldest Swedish museums, which is devoted to the memory of Gustaf Wasa, the first
king of independent Sweden, and important historical events. The collection contains the
Wasa Bible, weapons, armour, royal portraits. Another famous place in the Borlnge
surroundings is the Rommehedslgret, which is located 7 kilometers south-east from the
town. It was the Dala Regiments meeting and parade place in 1796-1908 and now it
represents the life and customs of the military of that time. The famous churches are the
Torsngs Kyrka (8 kilometers to the east from the town) and the Stora Tuna Kyrka (5
kilometers south-east from the town), which represent the cultural and artistic
uniqueness of the region. Not far from Stora Kyrka there is the Frostbrunnsdalen, a
picturesque valley. In Stora Tuna theres also an ostrich farm with variety of breeding (6
kilometers from the town) (Borlnge Turistbyr, 2007).
Dalhalla is an open air theatre which was established right in an ancient lime stone
quarry near Rttvik, Dalarna and it presents up to thirty events during every summer
season. The magic effect of a performance is created by the acoustics in the mine, the
lightning of the outdoor stage and the nature around (Dalhalla, 2007).
Stora Kopparberget is the Falun Copper Mine, which was founded in 1347 is located in
Falun, approximately 20 kilometers from Borlnge. The opencast part of the mine is 95

meters deep, 400 meters long and 350 meters wide. The former Mine Office building is
now a famous technical museum of Sweden. (Falu Copper Mine, 2007).
There are opportunities for both winter and summer recreation in Borlnge. In summer
one can take pleasure in the nature, swim or canoe in lakes (Ulvsjn, Siljan)), enjoy the
views of Dala river. In winter one can do all kinds of winter sports. Romme Alpin is a
famous ski resort, with a variety of ski runs (19 slopes up to 250 meters). Lake Osjn
and Lake Runn offer opportunities for long-distance ice-skating (Borlnge Turistbyr,
2007).
Dalsj Golf and Business Club is located 8 kilometers from the center of Borlnge and
offers its guests a variety of services and packages for organisations and individual
clients, such as golf course, packaged accommodation, restaurant (Dalsj Golf, 2007).
4.2 Weather
The important factor for tourism is weather conditions. According to Dalarna County
Administrations official website Dalarna.se, the region is located in the northern cold
temperature zone, with the average temperatures during the winter months lower than -
3C. The climate is humid and, in the south-eastern part of the county, where Borlnge
lies, the precipitation level can gain 600-800 mm a year. (Dalarna.se, 2007)
In the south-eastern parts after 25th of May the average temperature is over 0C during
24 hours, and the first summer day, when the average temperature is above 10C usually
comes on the 20th of May. The first autumn day, with the average temperature still above
10C, comes around 20th September. And winter, when the average temperature can be
below 0C is usually marked on the 20th of November in the south-eastern areas.
In the south-eastern parts the ground is covered with snow usually from 18th November
till 16th April. And according to the data of Dalarna.se, eighty per cent of Christmases
are white in the south-eastern parts. (Dalarna.se 19.07.2007). In summer the sun sets at

about 22.30-23-00 and rises at 3.00-4.00 (Borlnge Energi, 2007), while in winter the
sun rises at about 8.00 and it gets dark already around 14.30-15.00, thus the total number
of hours of sunshine is 1600-1700 a year.

Chapter IV Part Two Borlnge Hospitality Market
As the analysis of the area has shown, due to numerous industries and businesses, there
are the prerequisites for development of business traveling in Borlnge. That creates the
demand for different sorts of accommodation, be it a hotel, hostel or a private apartment.
According to Borlnge Tourist Information Board (Turistbyr, 2007), in total there are
about 1000 beds in town available for visitors. The Borlnge hospitality market is
heterogeneous and diverse and meets the demands of different segments.
Alongside with several hotels and inns (ActiveStay Hotel, First Hotel Brage, Hotel
Kupolen, Hotell Saga, Park Inn Gustaf Wasa, Quality Hotel Galaxen, Scandic Hotel,
Ulfshyttans Country Estate), there are also camping sites (Mellstaparkens camping,
Tunastrands camping, Tyllsns Udde camping) youth hostels (Dala Backpackers AB,
Haga Hostel, JustStay Hostel, STF Borlnge Hostel and Tourist apartments, Tyllsns
Udde camping, stugor och vandrarhem), and cabins (Cottage Aspeboda/Strtjrn,
Cottage Brukshuset north and south, Cottage Duvns, Cottage, Finnset and others)
(Turistbyr, 2007).
4.3 The Focus of the Research: Four Hotels in Borlnge
The focus of the current research is the hotels of a particular scale (three and four stars),
located in the center of Borlnge and serving the particular market segment, one of
which is business travel market segment. These hotels are: First Hotel Brage, Park Inn
Gustaf Wasa, Borlnge Scandic Hotel and Quality Hotel Galaxen. Presented below is
the description and analysis of these four hotels that will help to understand if there is a
need and opportunity for establishing a hotel of a different brand, currently not existing
at the local hospitality market.
4.4 First Hotel Brage
The First Hotel Brage is a four star hotel, which was founded in 1965. It is one of the 51
hotels, belonging to the First Hotel Chain, whose hotels are located in the cities and

countryside of Sweden, Denmark and Norway (First Hotels, 2007). First Hotel Brage is
located in the center of Borlnge and offers its accommodation and services to different
target groups: business people and leisure travelers (First Hotel Brage, 2007).
Room Types
The total number of rooms in the First hotel Brage is 92, of high standard, one of which
is a handicap room, and 78 rooms are non-smoking. There is a TV-set, radio, telephone
and hairdryer in each room. The hotel also offers to its guests room service, pay TV,
laundry (First Hotel Brage, 2007).
Services
The hotel offers various services such as sauna and solarium. There is also a recreation
area, a lobby, where the guests can watch a TV or read (First Hotel Brage, 2007).
Restaurant and Bar
In the same building with the hotel two restaurants (Bakfickan restaurant/take away
and Stationsgatan bar and restaurant) and one night club (Bolanche) are located, to
which the guests of the hotel have free access, as well as to the nearby nightclub S2
(First Hotel Brage, 2007).
Conference and Meeting Facilities
First Hotel Brage has at its disposal a boardroom and three conference rooms, which can
seat up to 60 people. Internet access is available in all the conference halls (First Hotel
Brage, 2007).

Special Offers
First Hotel Chain has various special offers and customer loyalty programs. One of them
is First Member, a customer loyalty program that gives bonus points for all expenses
customers have during staying at First Hotels, as well as at partner hotels Comwell or
Rotana, and which includes expenses in restaurants, bars or for other services. The First
Member program membership can also be used with a number of other companies, in
order to earn bonus points or get discount for some goods and services (OLearys
Restaurants, Fritidsresor, Hertz) (First Hotels, 2007).
First Meeting is a basic package of services for those who arrange meetings or
conferences in one of the First Hotels. The hotels provide the business customers with
LCD-projector, Internet access in the meeting rooms, whiteboard, stationery, as well as
serve lunch, dinner or mineral water and coffee during meetings (First Hotels, 2007).
First Hotels also have special offer for women the First Lady rooms, where they can
find such facilities as beauty products, bath robe, make-up mirror, iron and iron board,
special magazines and others (First Hotels, 2007).
IT @ First is a concept which guarantees that in every First Hotel the customers will be
provided with reliable Internet connection. The computer, for those who dont have a
portative computer along with them, and printing equipment are also available in the
halls of the hotels (First Hotels, 2007).
Location and Transport
First Hotel Brage is located in the center of the town and close to the main sightseeing
and shopping area. The central train station is two hundred meters and Dala Airport is
five kilometers away from the hotel (First Hotel Brage, 2007).

Nearby Companies
SSAB Tunnplat is seven hundred meters, Banverket Head Office is two hundred meters,
Vgverket is eight hundred meters, Stora Enso Papermill is five kilometers away from
the hotel (First Hotel Brage, 2007).
4.5 Park Inn Gustaf Wasa
Park Inn is a mid-scale hotel brand, which besides Radisson, Regent and Country Inn,
belongs to the Rezidor Hotel Group (275 hotels, nearly 55 000 rooms). Park Inn Hotels
are located in Europe, Middle East, Africa. Park Inn offers its hospitality services to
leisure and business travelers (Park Inn Hotels, 2007).
Park Inn Gustaf Wasa is a four-star hotel, known as one of the leading hotels in
Borlnge, offering quality accommodation and services to business people and leisure
travelers (Park Inn Gustaf Wasa, 2007).
Room Types
In total there are 76 guestrooms in the hotel, both for business visitors and for families.
The room for business people contains a work area, minibar, in-room modem access and
other services such as buffet breakfast, room services are also provided (Park Inn Gustaf
Wasa, 2007).
Services
Park Inn Gustaf Wasa offers a range of services, such as indoor swimming pool,
solarium, sauna and other relaxation facilities. For the customers of the hotel the free
parking is also provided (Park Inn Gustaf Wasa, 2007).

Restaurant and Bar
There is a restaurant, bar and bistro in the hotel. Wasa Gourmet Restaurant offers to its
visitors dining services and the facilities for special events, parties and different
celebrations. The American Bar and Bistro Broken Dreams is designed in the style of
50's and 60's and provides lunch and dinner for its guests (Park Inn Gustaf Wasa, 2007).
There are five meeting rooms with natural daylight, internet access and with the guest
capacity up to one hundred people (Park Inn Gustaf Wasa, 2007).
Special Offers
Park Inn Hotel Chain is providing facilities for different events: parties, business
meetings and others. The concept of the Colourful Meetings is implemented in all the
hotels of this chain: the red colour is for those who want to organise a party or a launch
event, blue is for business meetings and conferences, the yellow colour stands for
creativity and inspiration. The concept of creativity can be expressed through finding
new ways of organising meetings and other activities, through using new ideas, thoughts,
revealing hidden desires and dreams. The Green Meeting concept includes the idea of
having a healthy and harmonious meeting which includes healthy vegetarian food,
massage, spa, golf, various relaxation activities during the stay at the hotel. The
peculiarity of the Colourful Meetings concept is that the hotel doesnt offer a pre-
packaged meeting. The approach for every event is individual and is based only on the
needs and preferences of the customer (Park Inn Hotels, 2007).
Park Inn Hotel Gustaf Wasa offers a Golf Package, which includes the accommodation
in the standard double room, buffet breakfast, and the pass to Dalsj GK or Falun -
Borlnge GK courses throughout the golf season (Park Inn Gustaf Wasa, 2007).

The hotel also has a special family package which includes accommodation with
breakfast buffet, voucher for the Wasa restaurant and entrance to Aqua Nova for four
persons (Park Inn Gustaf Wasa, 2007).
Park Inn Gustaf Wasa is located in the center of Borlnge, in the same business area as
Swedens largest steel, rail and road corporations, close to the main sightseeing of the
town and the shopping area. The railway station is one hundred meters and Dala Airport
is five kilometers from the hotel (Park Inn Gustaf Wasa, 2007).
Nearby Companies
SSAB Tunnplat is eight hundred meters, Banverket Headoffice is one hundred meters,
Vgverket is three hundred meters, Stora Enso Papermill is five kilometers away from
the hotel (Park Inn Gustaf Wasa, 2007).
4.6 Scandic Hotel Borlnge
Scandic Hotel Borlnge is a three star eco-labeled hotel; it belongs to the Scandic Hotel
Chain, which in turn belongs to the European Private Equity Group. Scandic has its
properties (129 hotels, around 23 thousand rooms, over a thousand meeting rooms)
(Quick Facts about Scandic, 2007) in big cities as well as in rural areas in ten countries:
Sweden, Denmark, Norway, Finland, Lithuania, Estonia, Germany, the Netherlands,
Belgium and Italy.
Room Types
There are in total 141 rooms in the hotel, most of them are non-smoking. Three suites
and one room are equipped for the guests with disabilities. Scandic Hotel Borlnge
offers two types of rooms to its guests: standard and superior, which can be suitable both

for business and relaxation aims. In the standard room one can find on-demand movies,
TV-set, Scandic Hotel film show (pay TV), TV-cable, TV-standard, satellite channels,
wireless Internet access in some rooms, radio, telephone, working desk, hair dryer,
trouser press. Superior room is bigger and has extra facilities, such as Internet
connection, teletext TV, king, queen and wall beds, sofa bed, iron and ironing board, tea
and coffee making facilities (Scandic Borlnge, 2007).
Services
Scandic Hotel Borlnge provides the following services: indoor swimming pool, sauna,
table tennis and relaxation area, playroom for children with toys, puzzles and computer
games, Easy Access Point business corner, Scandic shop which is open 24 hours and
where the guests can buy snacks, soft drinks, coffee, as well as toiletries, books, gifts,
toys. One can also lend a cycle from the reception and make a tour round the area
(Scandic Borlnge, 2007).
Restaurants and Bars
There is a restaurant and a bar in Scandic hotel. Scandic restaurant can seat up to 180
guests. It provides organic buffet breakfast and buffet lunch and a la carte lunch, and
dinner, which include international and local specialties. In the lobby bar one can get
snacks and drinks bar and relax near the fireplace (Scandic Borlnge, 2007).
Scandic Borlnge has three big meeting rooms and five smaller rooms, which in total
can place up to 180 people. All the conference rooms are equipped with conference
facilities and have wireless Internet access (Scandic Hotel Borlnge, 2007).

Special Offers
Meeting Package in Scandic The Meeting concept of Scandic is the all-in-one

packages, which include providing the conference or meeting members with the
following facilities: free LCD projector is a meeting of ten or more people, CD player,
DVD and VHS recorder, free Internet access in all meeting rooms (Scandic Hotels,
2007).
There are two alternatives of meeting all-in-one packages and the one can choose
between a day package and a 24-hour package. The standard package meeting includes
standard equipment in the meeting room, such as flipchart, projector, whiteboard as well
as lunch with beverages and soft drinks, coffee, tea, dried fruit during the meeting. The
24-hour package includes buffet breakfast, lunch and dinner and accommodation in a
single or double room (Scandic Hotels, 2007).
Weekend at Scandic Scandic Borlnge offers an opportunity to spend the weekend at

the hotels and have recreation from the everyday working life. This offer includes
accommodation in a shared double room and buffet breakfast. For early booking one can
get the discount up to 30 percent. Children under 13 years old stay free of charge
(Scandic Hotels, 2007).
Romantic Stay Special offer for couples, who want to spend a few days together.
Choosing one of the rates, early or flex, allows getting discount up to 30 per cent for
early reservation or save money in case of changing the date or cancellation of the
booking. Children up to 13 years old can stay with parents room free of charge. A
breakfast buffet is included in this offer (Scandic Hotels, 2007).
Golf Package The golf package includes the stay in a double room with breakfast buffet
and attending the Dalsj golf course. Children up to 13 years old stay free in the parents
room.

Scandic has also special rates for children up to 13 years old and from 13 to 18 years old.
Scandic runs a customer loyalty program. According to the conditions of the program,
first, the customers will have an opportunity to exchange their HHonours1 points into
Scandic points and get the same status that they used to have with Hilton. Now the
Scandic members will get points for all their expenses at Scandic: for parking, for garage
renting, expenses in bars or restaurants, for buying things at Scandic shop. All Scandic
Hotels are divided into reward categories which affect the number of points one gets
while staying at the hotel of a particular category. The gained points can be later used for
free accommodation at Scandic hotels or for getting airline miles (Scandic Hotels, 2007).
Scandic Hotel Borlnge is located in the center of the town, two hundred meters from
the train station and five kilometers from the airport (Scandic Hotel Borlnge, 2007).
Nearby Companies
The large Swedish companies are located relatively not far from the hotel. SSAB
Tunnplat is two kilometers, Banverket is 2 km, Future Valley Teknikdalen is 2 km,
Vgverket is 2 km, Stora Enso Papermill is 3 km away from the hotel (Scandic Hotel
Borlnge, 2007).
4.7 Quality Hotel Galaxen
Quality Hotel Galaxen is a four star hotel, located in the center of Borlnge. The hotel
belongs to the Choice Hotel International, the worldwide franchisor of Cambria Suites,
Comfort Inn, Comfort Suites, Quality, Sleep Inn, Clarion, MainStay Suites, Suburban
1
2001 Scandic was acquired by the London-based Hilton Group Plc. And in 2007, EQT bought Scandic
from Hilton Hotel Corporation (Quick Facts about Scandic, 2007).

Extended Stay Hotel, Econo Lodge and Rodeway Inn brand hotels (Choice Hotels
Scandinavia, 2007).
Room Types
There are in total 128 rooms (183 beds in total) in the hotel, 100 of them are non-
smoking, and two rooms are equipped for guests with physical disabilities. All rooms
have cable/satellite TV, wireless Internet, writing desk hair driers and trouser presses.
Some rooms have computer hook-up, steam baths coffee makers, iron and ironing board
(Quality Hotel Galaxen, 2007).
Services
Besides the room service the hotel provides also the number of other services. Theres a
fitness center and a sauna, a whirlpool and a hot tub. Computer with Internet is available
free of charge, and copy and fax machines are disposable for extra payment. The pets are
allowed in the hotel and a parking site for cars and buses is available (Quality Hotel
Galaxen, 2007).
Restaurant and Bar
There are three restaurants and one bar in the Quality Hotel Galaxen. The Flying
Scotman Pub caters lunches, dinners and cocktails, while the Stora Bjrn restaurants
offers traditional Swedish cuisine, and the Trollstens Restaurang provides breakfasts and
lunches. The restaurants can seat up to 700 guests. The lobby bar offers drinks, snacks
and entertainments (Quality Hotel Galaxen, 2007).
There are ten meeting rooms with guest capacity from 12 to 26 persons, and also three
bigger conference halls Stora Bjrn which can place up to 380 persons, Orion up to 40

persons and Filmsdalen up to 84 persons. The total conference capacity of the hotel is
1235 guests (Quality Hotel Galaxen, 2007).
Special Offers
The Choice Hotel International offers a variety of customer loyalty programs, with the
help of which its customers get discounts and can gain points for staying and using
services of the hotel.
With the reward program Choice Privileges the customers can gain points for stays at
Comfort Inn, Comfort Suites, Quality, Sleep Inn, Clarion, Cambria Suites, MainStay
Suites and Suburban Extended Stay Hotel locations throughout the U.S., Canada,
Ireland, Mexico and the Caribbean and then redeem they points for free nights at the
hotels where the Choice Privileges programs are valid, or free nights at Preferred Hotels
& Resorts and Summit Hotels & Resorts, or for Airline Rewards or other travel rewards,
or for gift cards, entertainments, restaurants, gas stations and services in Choice Hotels,
or for memberships or even for charitable donations. One can also earn Airline Rewards
by staying at Comfort Inn, Comfort Suites, Quality, Sleep Inn, Clarion, Cambria Suites,
MainStay Suites, Suburban Extended Stay Hotel, Econo Lodge or Rodeway Inn (Choice
Hotels Scandinavia, 2007).
Government Programs in all Choice hotels give the opportunity to the military and
government travelers to get the special rates for accommodation at the hotel (Choice
Hotels Scandinavia, 2007).
In Choice Hotels, according to the program 50+, people after 50 and 60 years old can get
the price reduction up to 10 or 30 per cent.
The program of Choice Hotels Gift Cards allows the guests to redeem this card for
accommodation and other goods and services provided in Choice Hotels (Choice Hotels
Scandinavia, 2007).

Quality Hotel Galaxen is located in the center of the town, eighty meters from the train
station and five kilometers from the airport (Quality Hotel Galaxen, 2007).
Nearby Companies
The large Swedish companies are located relatively not far from the hotel. SSAB
Tunnplat is seven hundred meters, Banverket Head Office is two hundred meters,
Vgverket is eight hundred meters, Stora Enso Papermill is five kilometers away from
the hotel. As one can see, the Internet connection is available not in all the bedrooms
(Quality Hotel Galaxen, 2007).

4.8 Summary to Chapter IV Part Two
Table of Hotel Facilities

Hotel First Hotel Brage Park Inn Gustaf Wasa Scandic Hotel Borlnge Quality Hotel Galaxen
**** **** *** ****
Rooms Total 92 rooms Total 76 rooms Total 141 rooms Total 128 rooms
78 non-smoking 3 suites and 1 room for 100 non-smoking
1 for handicaps disabled 2 for disabled
Services Sauna, solarium swimming pool, swimming pool, sauna, Fitness center, sauna,
solarium, sauna table tennis, playroom, whirlpool, bath tub,
free parking business corner, business corner
Scandic shop, parking
cycle rent
Restaurants 2 restaurants 1 restaurant 1 restaurant 3 restaurants
and Bars 1 nightclub 1 bar & bistro 1 bar 1 bar
Conference 1 boardroom 5 meeting rooms 3 big meeting rooms 10 meeting rooms
facilities 3 conference rooms capacity: 100 people 5 smaller meeting rooms 3 conference halls
capacity: 60 people capacity: 180 people capacity: 1235 people
Internet some bedrooms all conference rooms wireless in some rooms wireless in all rooms
all conference and in-room modem access all meeting rooms wireless in all meeting
meeting rooms rooms
Special Offers First Member Colourful Meetings Meeting Package Customer Loyalty
First Meeting Golf Package Weekend at Scandic Program
First Lady Family Package Romantic Stay Government Program
IT@First Golf Package 50+ Program
Scandic Customer Choice Hotel Gift Cards
Loyalty Programs
Location center center center center
Airport 5 km 5 km 5 km 5 km
Train Station 200 m 100 m 200 m 80 m
SSAB 700 m 800 m 2 km 700 m
Stora Enso 5 km 5 km 3 km 5 km
Banverket 200 m 100 m 2 km 200 m
Vgverket 800 m 300 m 2 km 800 m
Table 3. Assembled Table of Borlnge Hotels Facilities

Table 3 represents the composite range of facilities and services in Borlnge hotels. The
hotels are positioned at midscale and upscale markets, and focus on leisure and business
market segments. The total amount of rooms in all four hotels is 437. They provide such
services and facilities as swimming pool, sauna, solarium, gym, as well as restaurants
and bars. Conference facilities include meeting rooms and conference halls, where
wireless Internet access is available alongside with meeting and office equipment, such
as copy machine and scanner, fax, projector, etc). All the hotels are centrally located, in
the same hotel market area, in a walking distance from each other and close to the large
Swedish companies, as well as other smaller companies and transport means (train
station and bus station, except airport which is five kilometers from hotels).

Chapter IV Part Three External Analysis of the Market: Opportunities and
Threats at the Local Market
Exploration and description of the area and of the local hospitality market will help to
make an external analysis and find the opportunities and threats created by the
environment.
Borlnge is located in the central Sweden, though not very close to Stockholm.
Nevertheless, even taking into account weak air traffic connection, it is very well
connected by means of railway transport and motorways with the major cities of
Sweden, as well as with other countries.
Proposition: the town is easily accessible
Local Area Attractions
Another advantage of the area is that there are opportunities for discovering cultural and
historical places, as well for enjoying the nature (forests, numerous lakes) which in
Sweden is so much valued and protected.
Proposition: there are a lot of opportunities for recreation for business people.
Industries
The population is not big (47 000 people), but the town is an important business and
industrial center, as four large Swedish companies are located there, alongside with other
smaller organisations and businesses.
Proposition: Borlnge is an important business and industrial center.

Customers
Borlnge is a meeting point of business people from different countries, who come to
town on business to visit their partners and colleagues from local organisations.
Unfortunately, there are no exact figures concerning the number of business people
coming to Borlnge every week, but as the interviews revealed, there can be more than
one hundred guests weekly to a big company. The accommodation capacity of the hotels
is not always enough for all the guests of the town, and people have to stay in apartments
or in the nearby towns, which is not always comfortable during the business trip.
Proposition: the empirical data of the study indicate that there is a need in
establishing a new hotel.
Competitors
The examining of the hospitality market in Borlnge revealed both threats and
opportunities for developing strategies for positioning a new hotel.
As it was described in Chapter Four Part One, there are different types of
accommodation in the town. But the four main hotels, which offer hospitality services to
business people, are First Hotel Brage, Park Inn Gustaf Wasa, Scandic Hotel Borlnge
and Quality Hotel Galaxen. The segments served by these hotels are business and leisure
travelers. All the hotels are strongly positioned at the midscale and upscale hospitality
market and the brands of the hotels are known all over Europe and in other parts of the
world. The hotels have positive images and are known for their high standard service
and customer loyalty relationship.
The hotels provide the customers with standard set of services and facilities; they offer
various customer loyalty programs and packages for different customer segments.
During interview a few respondents, who had experience of staying at these hotels or
accommodating the guests of the company there, expressed an opinion, that the hotels
are too standard and inflexible and people did not feel cosy there. This statement, first,

shows that people try to escape standardization and inflexibility in services and facilities.
Only Park Inn Gustaf Wasa was mentioned to be a cosy hotel with nonstandard rooms,
but the size and capacity of the hotel does not meet the demand. At the same time
Scandic was mentioned to be flexible with meal timing, which is very comfortable for
business guests, as they can arrive late at night and leave early in the morning. Quality
Hotel Galaxen was called too much official hotel with big halls. A few people even
said that they avoid lodging their colleagues or friends there.
Proposition: the investigation revealed the indicators of demand for non
standardized hotel accommodation and for services flexibility.
Summary to Chapter IV Part Three
The author realizes that the above given examples and opinions of people are not devoid
of bias, as they represent their subjective attitudes, but still they are not groundless as
their opinions are based on private experience of staying at these hotels.
Based on the analysis of the external market, the following conclusions can be done. The
town is centrally located and well connected with other important business and industrial
centers of Sweden and Europe. The local big companies and other smaller organisations
contribute significantly to developing and expanding the hospitality business market, and
create the demand for new hotel establishments in the town, which will be focused on
business travelers, but at the same time can provide special type of accommodation and
facilities combining both business and home atmosphere.

Chapter V
Analysis of the Interviews
Developing the Positioning Strategies
Chapter V Part One Analysis of the Interviews
5.1 Question Areas
The questions asked concerned different aspects of the topic business peoples
experience of staying in hotels. The main themes are:
Frequency, duration and destination of business traveling
Responsibilities by organising a trip
Factors affecting the choice of a hotel
Types of hotels and preferred facilities
Service quality and complaints
Travel expenses
Borlnge hotels
5.2 Interviews with Business People
As it was mentioned before, in total the author interviewed individually twenty

employees of companies, who have experience in travel on business and namely staying
at hotels.
Frequency, Duration and Destination of Business Traveling
The people interviewed are heavy, medium and light users of hotels, whose sources of
demand are either institutional or transit. The purposes of their trips are various:
meetings, conferences, educational courses, etc. They travel either individually or with a
group of colleagues. The frequency of their business trip varies from 10-20 days a year

to 80-120 days a year. They travel both within Sweden and abroad and stay at a hotel
from one night to two weeks.
Responsibilities by Organising a Trip
The responsible parties for the trip can be the company employing the traveling person
or the host company which the person should visit. The business traveler can book a
hotel himself/herself, appeal for it the companys travel department or the travel agency
which serves this company. In case the host company books a hotel, its choice can
depend on the cooperation contracts with hotels, the convenient location and, the
preferences of the traveler can also be taken into account.
Factors Affecting the Choice of a Hotel
Concerning the choice of accommodation, business people, as a matter of fact, do have a

choice, but it is limited. The travel departments have the databases of employees
preferences concerning a room, such as smoking or non-smoking. But as far as the
choice of a hotel is concerned, there are a number of limitations. In the Chapter II Part
Three , it was stated that business travelers are less price sensitive than leisure travelers.
First of all, the person cannot choose a very expensive hotel, as for most companies, as
well as for employees, the value for money is an important issue. Secondly, a person can
choose only from the list of hotels (mostly four star hotels, more rarely three star) with
which the company has a corporate agreement. In case there is no such a hotel at the
necessary destination, or they are fully booked, then a business traveler can choose the
hotel at his/her convenience, taking into account primarily the price. The price is an
important factor, but the organisations take care of their employees and allow choosing
four star hotels, and assume even five star if the hotel offers some discounted
accommodation.
As far as the sources of information about this or that hotel are concerned, business
people usually contact the travel department of the company or the travel agency,

sometimes they ask for the recommendations of colleagues or the host company (as it
knows the local market better), or search for information on the Internet (which, as it
was mentioned, is not always reliable).
In the situation when business travelers can select a hotel, the following factors (to put it
more precisely, the combination of these factors) were identified as most important and
affecting their choice: location, price, image/brand, facilities and services.
Most respondents consider that the convenient location is the most important, of course,
if the price of accommodation does not exceed the allowed level. The preferred location
is the one close to the company they visit or to the transport means (train station or the
airport). Here there is also an assumption. The choice will also depend on the activities
they have the next day. If, for example, the person stays at a hotel and then he/she should
catch a flight next day early in the morning, it will be more convenient for him/her to
stay at a hotel closer to the airport.
The brand and image of a hotel are also important. As a matter of fact, the companies
have agreements with chain hotels, which guarantee approximately the same level of
service and range of facilities in different cities and countries. That is why, when making
an agreement, the manager does not need to go to each hotel included in the corporate
agreement and check if the quality of services and facilities fall short of the requirements
of the company, but just rely on the image or brand reputation.
The brand can be the issue of choice, as most business people have membership cards
and can gain points for their staying at a hotel and using its services. That can be a
reason, why business people may prefer one hotel to another, as later they can exchange
membership points for free accommodation during private stay. All the hotels in
Borlnge, as well as most chain hotels in the world, run the customer loyalty programs
according to which the guests can get points for staying at a hotel.

Services and facilities are mentioned as very important factors. Some interviewees even
said that location is not that important for them, as they can take a taxi in order to get to
the airport or to the company. Among the desired services were mentioned flexible
check-in and check-out, as business travelers are very time conscious; availability of late
dinner and early breakfast, as sometimes they can arrive at a hotel late at nigh and leave
it early in the morning; fast reactions to their requests, concerning some services and
billing procedures. Of course, friendly and attentive personnel are a big advantage.
As to facilities, the clean and spacious bedroom, preferably with wireless Internet
connection, working table and a good comfortable bed were noted by most respondents.
The meeting and conference rooms in a hotel are not obligatory. Some people mentioned
they are too expensive, and in most cases they can use the meeting rooms of the host
company. One person mentioned, that if they have a meeting with a small number of
people, they usually rent a suite in the hotel they stay in, and not a meeting room, as it is
much cheaper. Those who use the meeting rooms in hotels, say that not all hotels
provide a good projector for free, and the business meeting group sometimes can bring
their own in order to avoid extra expenses. But this is not very convenient, especially
when they have to travel with this projector.
Internet connection of good quality and easy in use (when one does not need to buy a
card, then enter a code or pay for every hour of use) was mentioned as a must in any
hotel, especially if they stay there for a few nights. During a business trip people usually
have to work even in the evening. For that they need wireless connection in their room,
so that they can work lying in bed and not being disturbed. Moreover, the necessity of
some other facilities such as gym, a swimming pool, sauna, a bar and others is
appreciated, but not a must. The availability of these facilities is not important, if a
person stays at a hotel only one or two nights and does not have time to use them. But if
the stay at a hotel more than two or three days these facilities are very much desired.

Types of Hotels
Cosy and friendly atmosphere is preferred by business, with an assumption of duration

of their stay. If a person has to stay only one night at a hotel, the atmosphere in a hotel
does not actually matter. But if the stay is longer than two nights, business travelers want
to feel more like at home and escape formality. But there was also an opinion that when
a person is on a business trip, he/she does not want to relax but rather be focused on
work and thus prefers a more formal atmosphere of a business hotel.
As it was mentioned earlier, the interviewees have experience of staying at a hotel

mostly not longer than two weeks. Those, who have experience of long business trips
(more than a month), said they lived in a specially rented apartment, and not in a hotel,
as, first, it is too expensive for the company, second, they wanted to live in a cozier
atmosphere and feel like at home. The statement that people, being on a long business
trip prefer to stay in an apartment rather than in a hotel, creates the demand and
opportunity for local hotels to establish a few apartments in their hotels, where the
person can stay not less than a month and pay the same price as he/she would pay at the
normal apartment.
As pointed out before, most companies have contracts with midscale and upscale hotels,
which can provide their employees with high quality accommodation. To the question
whether the position of a person affects the scale of a hotel which will be offered to
him/her, the author got a negative reply. All the employees, notwithstanding their
position, have equal opportunities and stay at the hotels of the same scale. There was an
opinion that the General Manager of a company might live in a hotel of a higher
category, but no one knew for sure.
Service Quality and Complaints
To the question about the quality of service in hotels people replied, that they are
generally very satisfied. The reasoning for that was that the companies have contracts

with hotels and a lot of business people may come constantly to one and the same hotel.
That is why the hotel personnel try not only to satisfy the needs of their customers, but
also offer them some extra amenities and services in order to keep them loyal.
A few unpleasant situations, such as lost clothes after laundry, the suit was not cleaned
in time before a meeting or dirty room in a hotel were mentioned, but in those cases
business customers got some bonus stay or other free services. In general, business
customers are satisfied with the quality of service in the hotels they stay.
Travel Expenses
All the employees have corporate credit cards, which they can use during a business trip.
The allowed expenses are for the accommodation, transportation (plane, train, bus, taxi),
food and some entertainments in case they invite a business partner. The expense limits
are determined by the position of a person in respective companies.
5.3 Interviews with Travel Service Representatives
As it was mentioned above, the two persons from the travel services of SSAB and Stora
Enso were interviewed. Their responsibilities include organising the business trips of the
employees of their companies inside Sweden (SSAB. Carlson Wagonlit Travel Agency
is responsible for all the business trips abroad) and outside the country, as well as the
stay of guests of the company. The business people contact them every day asking to
organise their trips, which usually last from one day to one week, rarely two weeks.
Decision-making, Choice and Responsibilities
The price was mentioned as the decisive factor by selecting a hotel. But the companies
have some particular standards of accommodating their employees, which define that
accommodation should not be very cheap and not very expensive. The four star hotel is
usually booked for business people. In cases when the hotels are fully booked, the

employees can stay at a budget hotel, the service of which meets the needs of a
customer.
Hotel Selection
The companies have the agreements with chain hotels all over Sweden and abroad about
the special prices for their employees. Employees have the right to choose a hotel among
those with which their company has agreement. In the situation when they can choose
between the hotels with equally convenient location and approximately the same scale,
they give the preferences to the hotels where they have membership and can gain points.
Travel Expenses of the Company
To the question about the companys annual expenses of its employees traveling, no
one could name the exact sum.
Organising the Stay of Companys Guests in Borlnge
Depending on the season, there can be up to one hundred companys guests a week both
from Sweden and from abroad. They come both for a short stay (from one day to two
weeks) and long stay (up to half a year). The companies are responsible for providing
accommodation to these people.
The guests coming for a short stay are accommodated in Borlnge hotels: First Hotel
Brage, Quality Hotel Galaxen, Park Inn Gustaf Wasa and Scandic Hotel Borlnge.
Both interviewees named Park Inn Gustaf Wasa the coziest hotel of the town and said
that they always recommend it to their guests, if they do not have particular preferences
concerning other hotels.

It was mentioned also that there are only two comparatively good restaurants in
Borlnge which belong to hotels Park Inn Gustaf Wasa and First Hotel Brage, where the
business people from abroad and from other parts of Sweden can be invited.
Those guests who stay in the town for longer periods are usually accommodated in
special apartments, where they can feel more comfortable and what is less expensive for
the company.
The companies are also responsible for the entertainment program of their guests.
They usually recommend them to visit the places in the town and its surroundings.
5.4 Interviews of the Guests of the Companies
The guests of the companies come from all over Sweden, as well as from other countries
and stay usually from one night up to half a year.
The company is usually responsible for accommodation and expenses for other facilities.
Usually the manager of the host department or the employee of the travel service
contacts a guest and asks about his/her preferences concerning accommodation and
recommends some hotels in the town.
If the guests come for a longer period, they prefer to stay in one of the apartments
belonging to the host company. The position of that person does not affect the scale of
the hotel he will be accommodated in. (That fact was explained by the culture of equality
in Sweden).
As far as location of the hotel is concerned, all the guests agreed that, in general, it is
important. But in case with hotels in Borlnge it does not play a decisive role, as all the
hotels are located in the center, I a walking distance from each other and from most of
the companies (except Stora Enso). In this case the service and atmosphere are more
important. And again, those guests who stay in Borlnge longer than two nights,

mentioned Park Inn Gustaf Wasa as a cosy hotel, where customers can feel more like at
home.
In general, the guests were satisfied with the services and facilities offered by the local
hotels. The guests were also recommended by their colleagues from the company to visit
some local sightseeing.
5.5 Summary to Chapter V Part One
Although the author had fixed lists of questions for the interviews, the quantitative
approach of investigation allowed expanding and deepening the area of questions. This
exploration helped to find the replies to the questions investigated in the current
research, to make some conclusions and work out some propositions in terms of
opportunities at the local hospitality market.
The replies concerning the frequency, duration and destination of business travels helped
to evaluate the scope of business travel in general and proved the fact presented in the
theoretical part that business customers are the large and growing market in most parts
of the world, they often use the hotels services and facilities.
Proposition: the business travel segment is growing, which leads to the rise of
demand in hospitality, namely business hotels.
The business people come to Borlnge and stay there for short and long periods of time,
and prefer to live respectively in hotels or apartments. Besides, they expect to have also
all the necessary facilities concerning their business.
Proposition: there is a demand for hotels which can combine both business
atmosphere of office and cosy atmosphere of home, as well as for apartments,
which can be also offered by hotels.

Companies have cooperation agreements with chain hotels according to which
organisation can get special prices for hotel accommodation of its employees. Moreover,
the chain hotels with good reputation are very much preferred by organisations.
Proposition: there is an opportunity for establishing a hotel belonging to a famous
chain brand with good image.
Business customers are less price sensitive, but still the organisation is price conscious.
Organisations have particular requirements to hotels standards. The price should not be
very high; the four start hotel is acceptable, especially if the hotel offers special prices to
organisational customers.
Proposition: there is an opportunity for establishing a four start hotel.
Location is an important factor that in most cases affects the choice of a hotel.
Proposition: the new hotel establishment should be located in an easily accessible
place, closer to train station and most of the companies (center of the town).
The range of expected facilities and services from business hotels are broad.
Proposition: flexible check-in/check-out, flexible meal timing, spacious room with
comfortable bed, wireless Internet connection in every room, fast reactions and
rapid performance of requests, friendly and attentive personnel, as well as business
meeting facilities and other recreational facilities are expected from the hotel
focused on the business traveler market.
The availability of two high standard restaurants belonging to hotels Park Inn Gustaf
Wasa and First Hotel Brage creates the need for establishing a new restaurant.
Proposition: a hotel with a good restaurant is demanded (preferably serving twenty
four hours a day).

Chapter V Part Two Novotel. Uniqueness and Peculiarity
5.6 Novotel
Novotel is an international four star hotel chain and worldwide known brand, which
belongs to the Accor Group and operates with four hundred properties, business and
leisure hotels, in fifty-eight countries. Novotel sets the standard in upper midscale
lodging (Accor Registration Document, 2006:5) and its hotels are located mostly in the
big international business and tourist centers, in city centers and suburbs, close to
airports, train stations, motorways (Novotel, 2007). Seventy per cent of its customers are
business people, and thirty per cent are leisure travelers.
5.6.1 Differentiated Operating Structures
As mentioned in the Accor Registration Document (2006:8), Accor's strategy is to tailor

a specific hotel operating structure to each market segment and host country, depending
on return on capital employed and earnings volatility.
Accor Group applies a new model of business, focusing on brand strategy and segment
and region operation structures. The brand strategy is communicated through strong
brands, which are sold on the basis of management contracts and franchise agreements
(Accor Registration Document, 2006). Novotel is a standardized brand, clearly
positioned at the market of midscale accommodation.
5.6.2 Brand Strategy
In the year 2006 it was decided by Accor Group to renew the brand and create the new
image of Novotel chain. As the governance of the Accor Group consider, the brand will
achieve its full potential by rethinking not only the design and layout of rooms and
common areas, but also relationships with customers and partners. To achieve these
purposes the new advertising campaign of repositioning the brand was launched. The

project statement is Novotel: designed for natural living, which aims to represent the
well-being and style aspects of the chain new products (Registration Document,
2006:16). The main idea of this new position strategy is to change the image of the city
breaker and focus on a new type of traveler. Fluent in new technologies, this new
breed of traveler is breaking down the barriers between business and leisure, and feels
naturally at home in the new Novotel. The design of the new-branded hotels is aimed to
remind the guests about their unity with nature and to create homy and cosy atmosphere
(Registration Document, 2006).
5.6.3 Other Hotel Concepts: Services and Facilities
Restaurant is open twenty four hours seven days a week

Two children under sixteen years old get free accommodation and breakfast.
Novotel hotels offer various recreational facilities: fitness center, spa, swimming pool,
games room for kids. Flexible and fast check-in/check-out, late check-out on Sunday
evening (Novotel, 2007).
Novation, the International Comfort Standard
Novotels comfort standard is expressed in its concept of Novation room. One of

Novotels brand differentiating attributes is its concept of Novation room, which is
claimed to represent the international comfort standard and meet the demands of
business and leisure travelers (Novotel, 2007).
Restaurants
The dining concept of Novotels restaurants is that the customers can eat and drink any
time of a day. Every country is responsible for the cuisine and standards in its
restaurants, which represent the culture and traditions of that country (Novotel, 2007).

Novotel offers meeting rooms of different sizes with practical facilities and equipment,
which include ergonomic furnishings, sturdy and easy-to-maneuver flip charts, power
outlets and computer connections. The aim of Novotel is to meet the demands of every
business group, help achieve the aims and purposes of every meeting, providing the
necessary services and facilities (Novotel, 2007).
In every Novotel hotel in the world, the Meeting@Novotel service is provided for the
business guests, which presumes the seven-step approach to quality of meeting events:
attentiveness, anticipation, assistance, meals and breaks, leisure activities, transparency
and follow-up (Novotel, 2007).
Customer Loyalty Program
Accor is running a customer loyalty program in Novotel, called Accor Favourite Guest,
which gives the members the following privileges:
1. Guaranteed Best rate: 10% - 50% reduction at more than 2000 Accor hotels
2. Reservation Priority: a room and exclusive services are always available
3. Rewarded Loyalty: granting gift vouchers for leisure stay
4. Partner Advantages: Reduction for the services of Accors partners (Europcar,
Club Med) (Novotel, 2007).

Chapter V Part Three Developing and Choosing Positioning Strategies
Novotel was chosen as a hotel chain, which can meet the demands of business people in
Borlnge and fill the gaps in the hospitality market of the town. Novotel can differentiate
itself from other hotels in Borlnge and gain competitive advantages, by offering unique
product.
As it was described in Chapter II Part Two hotel positioning process consists of three
stages.
1. Identify the set of possible competitive advantages, on which the position can be
based
2. Select the most appropriate competitive advantages
3. Communicate and deliver the developed position to the target market
This 3-step model will be applied in order to develop the unique positioning strategy for
Novotel at the local hospitality market.
1. There are a number of possible competitive advantages at the local hospitality market,
such as flexibility in services (restaurant is open twenty-four hours a day, fast check-
in/check-out, etc.), image of the business hotel, meeting facilities, brand strategy,
differentiation based on customer relationship concept, etc.
2. The positioning strategy suggested in the current research is differentiation based on

the hotels unique brand strategy Novotel: designed for natural living. As ONeill
notes, brand matters for some types of hotelsbrand is a significant contributor to the
market value of upper upscale, upscale, midscale (ONeill, 2007:19)
The hotel should focus mostly on the business segment market. According to the new
hotel strategy, Novotel will create the atmosphere of harmony with nature, make people
feel like at home and help them relax. At the same time, according to the concept of a

hotel, it will provide business people with all the necessary meeting facilities and
services, which will create the working atmosphere.
Other facilities and services, offered by Novotel will be of big advantage for the image
of the new hotel. Based on the analysis of the area and interviews, the following
conclusions can be made:
Borlnge is an important business and industrial center there is a need in
establishing a new four star hotel Novotel is a four star hotel focused on the
business segment market, belonging to a famous chain brand with good image
There is a demand for non standardized hotel accommodation and for services
flexibility Novotel offers twenty four hours restaurant services (high standard
quality restaurant), flexible check-in/check-out, the concept of Novation hotel
room, etc.
There is a demand for hotels which can combine both business atmosphere of
office and cosy atmosphere of home Novotels new brand strategy
corresponds this requirement
Business meeting facilities and services Novotels Business Meeting Concept
The recommendations that could be made by hotel establishment:

The hotel should be located in the center of the town, close to the main business
activities and big companies
Considering the fact that the atmosphere of the hotel should not be too official, it
is recommended to build a small- sized hotel, approximately 100 rooms
Besides standard rooms for short stay, the hotel can offer its customers apartment
suites, where the business guests can stay for longer than a month
3. The new brand and image (the unique atmosphere of business and harmony with
nature) should be communicated and delivered to the targeted markets as the best
solution for the business traveler, as something they can not find at other hotels.

Chapter VI
Conclusions and Recommendations
7.1 Conclusions
The purpose of this study is to analyse the importance of a business travel market
segment for the local hospitality market in Borlnge and find out the opportunities for
establishing a new hotel in the town. The aim of this chapter is to conclude the findings
from the research regarding the aim and objectives set for the research.
The main aim of the dissertation is to:

Analyse the local hospitality market and find out if there is a need and
opportunity for establishing a new hotel in Borlnge.
To achieve this aim a number of objectives were set:

Taking into account the growing significance of the business market segment
worldwide, to analyse the importance of this segment for the local hospitality
market
To determine the important factors that affect the decision-making process by
hotel selection
To reveal the preferences of the business people and their expectations from the
hotel service
To identify the gaps in the local hospitality market and to analyse if there is a
need and opportunities for establishing one more hotel in the town.
Find out the appropriate strategy for positioning a new hotel chain in Borlnge
In order to achieve the main aim, the five objectives were identified for obtaining
relevant information.
The first objective was successfully attained in Chapter II Part Three, highlighting the
growing significance of the business travel market segment for the hospitality

organisations all over the world. Then, in Chapter IV the importance of the business
travel segment for the Borlnge hospitality market was demonstrated. This segment is
sufficient due to the presence of the large organisations in the town and their
relationships with national and international companies that attract a lot of business
customers to this area.
As far as the factors affecting the decision-making process are concerned, on the basis of
literature study and interviews, the following attributes were identified as the most
important: location, price, services, facilities and image/brand. A range of preferences
and expectations concerning facilities and services from the hotels were revealed: cosy
atmosphere, flexible services, rapid performance, etc.
In the Chapter IV the local hospitality market was analysed and the following
propositions were made on the basis of this investigation: the town is an important
industrial center, which is very well connected with other cities of Sweden and other
countries by means of transport. There are a few hotels in Borlnge, but because of
industries and big amount of business guests in the town, not always the room capacity
of these hotels can accommodate the customers. That is why the proposition of an
opportunity for establishing a new non standardized hotel can be given.
Finally, when the needs and opportunities for positioning a new hotel in Borlnge were
identified, the author suggested Novotel as a hotel brand that can be located in the town
and that can position itself and get its market share by implementing differentiation
based on the hotels unique brand strategy.
7.2 Recommendations for Industry
The hotels all over the world are competing for the market share and develop new
strategies to leave the competitors behind. In order to improve the image of the hotel,
and accordingly increase the benefits, hotels should put more efforts to investigating the

needs and expectations of their target groups. Only the deep understanding of the desires
of their customers can help the hotels keep their customers loyal.
As far as the business segment is concerned, the author would recommend hotels to
revise their perceptions concerning the needs of business people. Some hotels managers
consider that a hotel focused on business customers should be very formal, as some
interviewees said, without soul. A lot of business people have to spend one third of the
year traveling, and very often they want to come to a hotel, relax in a cosy atmosphere
and feel like at home. And it is a task of hotels to provide the business people with this
atmosphere and offer the necessary services and amenities.
7.3 Recommendations for Further Research
The author would recommend the Novotel hotel chain to take into account the
opportunities found in the current research for establishing its property in Borlnge. The
investigation revealed that there is a need for a new hotel, and the strategies of this
particular hotel can meet the demands of the business customer.
Novotel marketers should first investigate the local market, interviewing business people
in order to get deeper knowledge about their preferences and expectations. Other
important step is to get a contract with local big and small companies for
accommodating their guests in a hotel, offer the organisational clients corporate
discounts and various customer loyalty programmes.
The method of investigation used in this research was qualitative, based on individual
interviews with business people of the local companies. For the aims of the further
research, this study can be supplemented with more quantitative market survey, which
can give generalized results and represent the opinions of larger number of business
people. The more extended exploration of the local hospitality market will determine
more precisely the strategies that can be developed for Novotel to gain the market share
and expand its presence in Sweden.

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Accor Registration Document (2006)

http://accor.com/gb/upload/document_reference/ACCOR_DRF06_VGB_HD_BAT.pdf
20.07.2007
Borlnge Municipal Facts (2006)

http://www.borlange.se/upload/15247/AssociatedFiles/Municipal%20facts%202006.pdf
(12.06.2007)
Quick Facts about Scandic (2007) Scandic Hotels AB

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(12.06.2007)
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http://www.banverket.se/sv.aspx (16.06.2007)
Borlnge Energi, 2007

http://www.borlange-energi.se/ 19.07.2007
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http://www.borlange.se/default____130.aspx 10.06.2007
Borlnge Turistbyr (2007)

http://www.borlange.com/default____4.aspx?epslanguage=EN (12.06.2007)
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Appendices
Appendix I. List of Questions for Business Travelers
1. Personal Information
Name of the company

Name of the department
Position of the person
2 Questions Concerning the Travel Experience
How often do you travel for a business trip: abroad or within Sweden (during a year)?
Decision-making, choice and responsibilities
If you travel abroad to visit your business partners, who is usually responsible for
organising your staying there, your company or the other party? Who pays for
accommodation and food?
If your company is responsible for your trip, who particularly organises it? The
secretary, special department or you can do it yourself?
Do you have a choice concerning accommodation? Do you discuss your preferences

beforehand? With whom?
What are the factors that affect the choice of a hotel?

How do you usually learn about this or that hotel? From your friends, colleagues (word
of mouth), or from Internet sites?
Factors affecting the choice of a hotel

If you get information about some particular hotel from the Internet, how can you be
sure this hotel is good for your business trip?
Is brand of the hotel important in this case?
Do you prefer chain hotels, the reputation of which is known all over the world?
Is location important?
Is price important? (if the location or facilities are a little bit better that in other similar
hotel)
Does the price usually indicate the quality of service in the hotel?
If you have a choice between two similar hotels, will you choose the cheaper one?
Are image and brand of the hotel important?
Is service of a hotel important (if, for example, the price is less or the location is better)
On the scale of importance, from one less important to five most important, what
would you mark as most important and what as less important: location, facilities, price,
image or services?
Type of hotels and accommodation
How long do the trips usually last?
Where do you stay during the business trip? Hotel or special apartment?
If you have a long-term trip, do you stay in a hotel or apartment? Would you like to stay
in an apartment in case you have to stay at this town/city longer?
What kind of hotel do you usually stay at? (upscale, midscale: number of stars).
Does your position affect the type of the hotel you stay at?

If you travel to one and the same place a few times, do you stay at the same hotel or at
different? If yes, why is it like that? Does your company have any contract of
cooperation with this hotel?
What is the name of this hotel in Sweden?
Do you like it? What is your personal opinion about it?
FacilitiesWhat do you usually expect from the hotel, when you are on a business trip?
What kind of hotel would you prefer to stay at? What facilities would you like to have
on your business trip (conference hall, swimming pool, gym)?
Do you use laptop during your business trip? Is Internet connection in hotel/room
important? Will it affect on the choice of the hotel (if theres no Internet)?
Can you remember your best experience in the hotel during your business trip? Maybe
something that really impressed you? Was over your expectations?
If you have the conferences or meetings, do they usually take place right at the hotel or
anywhere else?
What are special facilities for the business visitors?
If you stay at one and the same hotel for a few times, do you get some bonus, which you
can use for your private trip, for example, with your family?
What can you say about the service quality at those hotels?

What do you specially like concerning service?
Are personnel always friendly?
Have you ever had any negative experience while staying at a hotel? Have you ever had
conflicts or problems while staying at the hotel?
If yes, how they were solved?
Will you come back to the hotel where you had some negative situation?
Travel expenses
How much can a person spend during one trip?

Is there some limited expense rate for every trip?
Do you use corporate travel credit cards? Or you just bring the bill after your trip?
If your have extra expenses during the business trip (for emergency cases, Internet,
mobile), do you need to explain and confirm, why you had to have these expenses?
Are the expenses limits depend on the position of a person?
Borlnge Hotels
Do you have experience of staying at Borlnge hotels?

What do you know about them?
What do your colleagues say about them?
Which one did they mention as the best one?
Which could you recommend to the guests of the company or to your friends?

Appendix II. List of Questions for Representatives of Travel Service Departments
Name of the company

Name of the department
Position of the person
2. Travelling abroad or within Sweden
Tell me shortly about the service of your department? Do you organise trips within
Sweden and abroad?
How often do departments ask for organising their business trip? How often do people
usually travel?
Decision-making, choice and responsibilities
If people go to visit other company, which party is responsible for organising the trip?
Do the departments always ask to organise their trip or sometimes they can do it
themselves?
Do you have a database about preferences of each employee of the company?

Tell me about their preferences concerning hotel. Do they have some particular
preferences (not only standard: non-smoking, clean). Can they discuss their preferences
beforehand with you?
Do they want to stay in some particular hotel/hotel chain/brand?

In which hotels do you usually organise their staying? Why these ones? Does the
company have contract with them?
What are the factors which affect the choice of a hotel? Maybe some particular
facilities? Do they meet the standard requirements?
How do you usually learn about this or that hotel? From your friends, colleagues (word
of mouth), or from Internet sites? Maybe you even can go to these hotels yourself to see
if everything is good?
Hotel positioning
If from the Internet, how can you be sure this particular hotel is good for the business
trip?
Do you usually cooperate with chain hotels, the reputation of which is known all over
the world?
What is important?
Is price important? Priority?
Does the price usually indicate the quality of service in the hotel?
If you have a choice between two similar hotels (the same location, but services and
facilities are different), will you choose the cheaper one?
Is service of a hotel important?

image or services?
Do people from different levels of organisation (top management, middle management,

personnel) have the same type of accommodation and services? Does the position of the
person determines in the hotel of what scale he/she will stay?(ex. 5 star for general
managers)? If yes, what is the difference?
How long do the trips usually last? If they have a long-term trip, can they stay in the
apartment? Do they usually ask about it?
What kind of hotel do they usually stay at? (upscale, midscale: number of stars)
If you travel to one and the same place a few times, do you stay at the same hotel or at
different? If yes, why is it like that? Does your company have any contract of
cooperation with this hotel?
What is the name of this hotel/hotel chain in Sweden?
Facilities
What kind of hotel do the employees would prefer to stay at? What facilities do they
want to have during their business trip? (conference hall, swimming pool, gym)? Is
Internet a must now? Will it affect on the choice of the hotel?
What are special facilities for the business visitors?
If they have the conferences or meetings, do they usually take place right at the hotel or
anywhere else?

If business persons stay at one and the same hotel for a few times, do they get some
bonus, which they can use for their private trip, for example with the family?
Service Quality and Conflicts
What can you say about the service quality at those hotels? Personnel?
Have the employees ever complained that they had conflicts? If yes, how they were
solved? Have they then asked not to accommodate them in that hotel anymore?
Travel expenses
How much does the company (department) spend every year for business travel?
How much can a person spend during one trip?

Is there some limited expense rate for every trip?
Do you use corporate travel credit cards?
Are the expenses limits depend on the position of a person?
3 Business guests visit to Borlnge
Business Guest, length of staying
How often do you have business guests from other cities or countries, who have to stay
in Borlnge at least for one night?
Are they from abroad or from Sweden?
How long do they usually stay in Borlnge? Long-term or short-term?

Who is responsible for trip arrangements? Price and expenses
Does your company organise his/her staying here and responsible for expenses?
If yes, is the company sensitive to price of the accommodation?
Does the position of this guest affect on the scale of hotel he/she is going to stay at?
Do they have a choice or preferences?
If the guest comes for long-term, can they live in apartments if they want?
Where do you usually accommodate your business guests? Is there some particular hotel
or accommodation in Borlnge for your guests?
Do you recommend hotel in Borlnge to the companys guests? Which one?
Do you have cooperation with this hotel/company? Does the company have agreement
with this hotel?
Are there more facilities than in other hotels? What kind of facilities and services does it
offer?
If there is a conference, where does it usually take place? Do you use the facilities of any
hotel in Borlnge?
Is the location of the hotel important for your guests?
Is that important that hotel is close to the company?

Or they would prefer to live closer to shopping area? Or some other places?

If the guests have a choice of a hotel, what is affecting their decision: location, price,
image, services, facilities?
Is Internet connection in hotel/room important? Will it affect the choice of the hotel?
What do your guests say about accommodation in Borlnge? Are they satisfied? Maybe
they have said, that wanted to have some better service or facilities? Or maybe they had
some preferences?
What about the entertainment part of their stay here? If they stay short-term, where do
they usually go? What are their opinions about Borlnge?
If they stay long-term, what do they prefer to do? Which places do you recommend them
to visit?
Borlnge
Have you ever stayed at the Borlnge hotels? If yes, which ones?
Were you satisfied? Or you would like to have some improvements?
Are they good for business people in terms of facilities, service quality? Which one
would you recommend to your business partner?

Appendix III. List of Questions for the Business Guests of the Companies
Name of the company you visit?

Name of the department you visit?
What is your position?
2. Questions to the guest of the company
Business Guest, length of staying
Where do you come from? Country, city?
How often do you have business trips when you have to stay in Borlnge at least for one
night?
How long do you usually stay in Borlnge? Long-term or short-term?
Who is responsible for trip arrangements? Price and expenses
Does your company organise your trip to Borlnge and is responsible for expenses? Or
maybe its the inviting party (company in Borlnge)?
Is the company sensitive to price of the accommodation?
Who was responsible for all the arrangements concerning you visit the company in
Borlnge? Who contacted you asking about your preference?
Does you position in the organisation affect the scale of hotel you are staying at?

Did you have any preferences about some particular hotel or facilities before you came
to Borlnge?
If you come for a long period of time, would you prefer to stay in a hotel or live in an
apartment?
Is there some particular hotel or accommodation in Borlnge for all the guests of the
company?
Do you like this hotel? What kind of facilities and services does it offer?
If you have a conference, where does it usually take place? Do you use the facilities of
any hotel in Borlnge?
Is the location of the hotel important for you?
Is it important that hotel is located close to the company?

Or you would prefer to live closer to shopping area? Or some other places?
If you have a choice of a hotel, what factors affect your decision: location, price, image,
services, facilities?
Do you use a laptop during your stay in a hotel?

Is Internet connection in hotel/room important? Will it affect the choice of the hotel?
What is your opinion about accommodation in Borlnge? Are you satisfied? What
preference do you have? Maybe you would like to have some other facilities or better
service?
Do you have any comparison example, such as staying in Stockholm compared to

Borlnge?

What about the entertainment part of your stay here? If you come for a short-term, where
do you usually go? What is your opinion about Borlnge?
If you stay long-term, what do you like to do here? Which places have you visited? Who
recommended them to you?

Appendix IV. List of Questions for Hotel Managers
Name of the hotel

Name and position of the person
2. Look at the information below and say if its correct. Can you please comment it?
(The author was to represent the information about the hotel which is given in Chapter
Four Part Two)
3. Hotel Segmentation
What segment is the hotel focused on?

What strategies the hotel use to position itself at the market (differentiation,
segmentation, price leadership)
What does the hotel do to get the image of a quality and cosy hotel?
How can you describe business traveler? Needs and expectations? Is he a demanding
client? Whats the difference between leisure and business guest?
Business people travelling
What is the percentage of business guests in the hotel? How often do they stay at the
hotel (a year)?
What is the occupancy rate at the hotel?
Who usually organizes their stay at the hotel?
Way of payment
Do they mostly book accommodation and services through the Internet?

How do they usually pay? With a corporate credit card?
Cooperation with local companies
Do you have agreements with local companies for accommodating their guests or for
serving their conferences?
With which companies do you have contracts?
What privileges do the customers get from it?
If the customers travel with a group of colleagues, do they get some discount?
Choice of the hotel
How do they usually learn about your hotel? From friends? Colleagues? (word of mouth)
Internet sites? Brochures?
Which factors are importand by choosing a hotel?
Hotel positioning

Do you think the reputation of a chain hotel gives affects positively on their decision?
Is price important for business travelers? Can it be a priority?
Do you think the price indicates the quality of service in the hotel?
If one has a choice between two similar hotels (the same location, but services and
facilities are different), will he or she choose the cheaper one?

Is service of a hotel important in the context of decision-making?
image or services?
Do people from different levels of organisation (top management, middle management,

personnel) have the same type of accommodation and services? Does the position of the
person determines in which room he or she will saty?
If yes, what is the difference?
How long do the stays usually last?
Are there people who live in hotels for more than two weeks?
Facilities
What facilities the business people prefer to have in a hotel? (conference hall, swimming
pool, gym)?
If they have the conferences or meetings, do they usually take place right at the hotel or
anywhere else?
Do you have Internet access in every room?
What customer loyalty program is applied at the hotel?

Your hotel belongs to the famous brand, which has very good image in Sweden (Europe,
world). Tell me about the service quality in your hotel. What does the hotel do to
improve it.
Tell me about some conflict situations with business people. What were the reasons?
How the problems were solved?

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Hospitality Market Opportunities

for the Business Market Segment

In partial completion of the award

Source: Hallmark Hotel (2007)

MA European Tourism Management

Julia Smolyaninova - ii - (MA) European Tourism Management

Julia Smolyaninova - iii - (MA) European Tourism Management

Julia Smolyaninova - iv - (MA) European Tourism Management

Julia Smolyaninova -v- (MA) European Tourism Management

Chapter II Analysis of the Hotel Concept

Chapter II Part One Hotel Concept 6

Julia Smolyaninova - vi - (MA) European Tourism Management

Chapter II Part Two Marketing Strategies: Segmentation, Target 13

Chapter II Part Three Market Segment: Business Traveler 28

Julia Smolyaninova - vii - (MA) European Tourism Management

Chapter III Methodology

Chapter IV Local Market Analysis

Chapter IV Part One Borlnge: Description of the Area 47

Chapter IV Part Two Borlnge Hospitality Market 52

Julia Smolyaninova - viii - (MA) European Tourism Management

Chapter V Analysis of the Interviews. Developing the

Chapter V Part One Analysis of the Interviews 69

Chapter V Part Two Novotel. Uniqueness and Peculiarity 79

Chapter V Part Three Developing and Choosing Positioning Strategies 82

Chapter VI Conclusions and Recommendations

Julia Smolyaninova - ix - (MA) European Tourism Management

Figure 1. Dissertation Structure 4

Figure 2. Hotel as Total Market Concept 9

Figure 3. Steps in Segmentation, Targeting and Positioning 14

Figure 4. The Hotel Market from the Business/Leisure Perspective 21

Figure 5. Factors Affecting the Choice of a Hotel 36

Table 1. Comparison of Structured, Semi-structured 40

Table 2. Interviews Participation in the Research 44

Figure 6. Sample Criteria Used for Interviews 45

Table 3. Assembled Table of Borlnge Hotels Facilities 64

Julia Smolyaninova -x- (MA) European Tourism Management

Appendix I. List of Questions for Business Travelers 94

Appendix II. List of Questions for Representatives of Travel Service 98

Appendix IV. List of Questions for Hotel Managers 107

Julia Smolyaninova - xi - (MA) European Tourism Management

Business Traveller is a person who travels either individually or with a group of

Differentiation is a strategy, by which the company attempts to be unique and different

Julia Smolyaninova - xii - (MA) European Tourism Management

Julia Smolyaninova -1- (MA) European Tourism Management

1.2 Aims and Objectives

The main aim of this dissertation is to:

To achieve this aim a number of objectives can be identified:

Julia Smolyaninova -2- (MA) European Tourism Management

Julia Smolyaninova -3- (MA) European Tourism Management

Part One: Borlnge: Description of the Area

Part One: Analysis of the Interviews

Figure 1. Dissertation Structure

Julia Smolyaninova -4- (MA) European Tourism Management

Julia Smolyaninova -5- (MA) European Tourism Management

2.1 Definition of the Hotel

2.2 Importance of hotels

Julia Smolyaninova -6- (MA) European Tourism Management

Julia Smolyaninova -7- (MA) European Tourism Management

Ownership and Management The hotels can be owned by individual independent

2.4 The Hotel as Total Market Concept

According to Medlik, (1994:14) hotel is an institution of commercial hospitality,

Julia Smolyaninova -8- (MA) European Tourism Management

Location of the Establishment Facilities Service