Introduction
Apex Hotels Ltd. is a family-owned chain of hotels in the mid-range, established in 1996 and headquartered in Edinburgh, Scotland. The brand’s operational portfolio currently exists in a total of 10 properties upon which their hotels have been established in the cities of London, Bath, Glasgow, Dundee and Edinburgh, all of which are in the United Kingdom (UK) (Apex Hotels, n.d.). As a hospitality brand, Apex Hotels provide with the combination of accommodation, food and beverage, as well as other services that could be regarded as normative to be found in such a ‘economy hotel’. With the inherent environmental factors and conditions that it currently faces, it would seem that the propositions associated with growth now seems to appeal to a market entry in the country of Spain.
The concept of the brand primarily stresses upon the term of ‘Apex’, which means delivering the best possible conditions and gaining the topmost positions in what is already a highly competitive market scenario or situation (Apex Hotels, n.d.). The values that this brand identifies most prominently highlights a sense of exclusivity for its market segment of mid-range hotels, which would help in manifesting and presenting all things to the customers. Additionally, it is important to focus upon the fact that the characteristics of the brand is also associated with creating a family friendly environment. Such a combination of elements and factors have aided Apex Hotels in proposing the outcomes by and large.
Market Attractiveness: The most important conditions and factors applicable in this context is determinative with the host country of Spain in which the establishment of Apex Hotels need to be highlighted. In that vein, the macro-environment risks would be the foremost consideration to have beyond all considerations and factors.
Political Risks: Spain’s most important political sphere is defined in terms of having a government that is a parliamentary democracy. This means that the country’s people elect their representatives in order to run the government, at the top of which is the prime minister of the government, but the title of the monarch is referred to as the ‘head’ of the entire state. All things that could be found in any other modern democracy is present in Spain, such as the division of the main powers vested to the government, the hierarchies that divide the state of responsibilities in terms of highly autonomous regional governments etc. (Del Mar Alonso-Almeida and Bremser, 2013) The multi-party system has been enshrined in the country’s Constitution, which have been noted as an inherent point of relevance after the dissolution of the dictatorial regime ruling over the country through its monarchy for much of the 20th century (González-Torres, Rodríguez-Sánchez and Pelechano-Barahona, 2021). Despite certain developments across the political sphere and its players, the state of affairs concerning businesses have remained relatively stable in terms of the conditions by and large. The government has participated and encouraged widespread liberalization of the economy since the 1990s, all of which combined to provide with the opportunity of focus for a company like Apex Hotels to make a market entry. The risks, to a possible extent, involve the notion of shift among the governments regarding which foreign business presence would start hurting the domestic interests to a significant degree.
Economic Risks: Spain boasts a largely diversified and developed economy that is the fourteenth largest in when measured in terms of the nominal Gross Domestic Product (GDP) of £1.03 trillion. The state of the GDP growth, however, had been decreasing before the pandemic from 2.4% in financial year (FY) 2017-2018 to 2% in the FY 2018-2019 (González-Torres, Rodríguez-Sánchez and Pelechano-Barahona, 2021). The pandemic indicated that the growth of GDP in FY 2019-2020 had been negatively skewed at a very high 12.8%, while the growth has rebounded in the ongoing quarters averaging at 7.2% in total (González-Torres, Rodríguez-Sánchez and Pelechano-Barahona, 2021). However, it is important to note that the Spanish economy has shown effects of recovery from slowdown or recession in the recent past, which indicated the country have a high trade deficit. Such concerns could most certainly play roles in far greater extent of stability in other places.
In that vein, it is important to consider that for Apex Hotels the case of Spain involves many other factors and conditions. Under such considerations, it is important to specify that overall economic freedom score for Spain could be accepted to a certain degree. However, the average of freedom for businesses in this scale identified is lower and downwards trending, which could bring potentially concerning circumstances at large (Del Mar Alonso-Almeida and Bremser, 2013). However, the freedom in monetary flows remain high, which indicate the necessary conditions to establish or point to.
Sociocultural Risks: The risks in this particular part concerning this host country encompasses and addresses many distinct factors and conditions altogether. The most prominent factor is that of unemployment, which would be resolved through the current concerns and factors at hand to a degree (Rodríguez-Antón et al., 2020). Furthermore, other points of concerns involve the state of ageing population, low income growth among the population, as well as the concerns regarding nationalism in terms of business presence in exerting immense consequences for all across the board. Still, culturally speaking, tourism constitutes one of the major sectors in Spain, and the hospitality option would most definitely attribute certain favorable conditions and factors, which would need to be pointed out and established (Rodríguez-Antón et al., 2020). The combination of these factors ultimately dictate and establish that although risks in these ways are, in fact, present, they would be potentially resolved in terms of the inherent characteristics that Apex Hotels would bring to the table.
Technology Risks: The country has been advanced in terms of accepting and presenting proper technology solutions in all notable and significant ways. They would dictate and establish that the conditions associating with technology are guided and determined with the help of proposing the availability in technology integration in terms of a great number of opportunities by and large (Gustavo, 2013). The contributions of technology have been significant but it is important for Apex Hotels to actually overcome and deliver the potential results, which might have been delivered in terms of requiring adaptation to competition and other factors (Rodríguez-Antón et al., 2020). However, the overall extent to which technology might favor or threaten this organization in question remains to be seen.
Environmental Risks: The risks in the environmental directly with the important globally relevant factors, such as deforestation, global warming, pollution, desertification etc. all of which have been important talking points in the context of Spain (González-Torres, Rodríguez-Sánchez and Pelechano-Barahona, 2021). The notable significance of tourism implies that all factors and circumstances would relate to the conditions, which would correlate with political and legal initiatives altogether. The indicative relevance of these risks are also tied to the fact regarding the major issues described above would play roles (Rodríguez-Antón et al., 2020). Under such conditions, the viability of proper business related considerations and advantages would themselves become affected at large.
Legal Risks: The overlying legal landscape in Spain is very strong with respect to a strong and independent judiciary that has completely taken into consideration the importance of social welfare. This means that the main risks associated in this case underlines the power of the labor workforce to which Apex Hotels would need to effectively adapt and satisfy. In addition to this, it would bring major issues in terms of functioning and operations, which would reveal the potential risks involved in terms of associating in the long term (González-Torres, Rodríguez-Sánchez and Pelechano-Barahona, 2021). Still, it is important to view and consolidate as to what rather short or medium range temporality would be involved in delivering the outcomes by and large.
In these macro environment risk conditions, it would seem that the market attractiveness of Spain to be in favor of Apex Hotels in actually making the move. However, certain other factors are also involved in determining the conditions, which would be relevant in highlighting and indicating the conditions that are involved with this entire affair.
Key Demand Drivers: As already highlighted above, the tourism sector in Spain is a largely healthy and robust affair with respect to certain key specific conditions and factors with immense implications outlining all other factors. Addressing the hospitality industry directly, however, reveals that its total market size is about £1.46 billion in the current financial year of 2021 (González-Torres, Rodríguez-Sánchez and Pelechano-Barahona, 2021). The current growth rate is supposed to be at 42.08% over the course of time in 2021-2025 at large, which would be highly relevant in terms of specifying the results and the outcomes. Meanwhile, the growth rate annually currently exists at the rate of 6.5% (Fernández-Cavia et al., 2017). By the year of 2025, the size of this market is expected to become £5.97 billion, which indicates the high level of demand indicated and established by and large (Fernández-Cavia et al., 2017). However, it must be kept in mind that the hospitality sector in the country have been affected significantly towards being shrunk in size across the overall period of 2020-2021.
Meanwhile, the conditions associated with delivering the specific segments across the hospitality market is also important to focus upon as well. The rough specification of highlighting the divisions in terms of international and national customers indicate division in market shares as 61% and 39% respectively (Heritage.org, 2021). In terms of financial flow in terms of investments, predictive demands seemingly associated with dominance with economy hotels, which certainly carry a great deal of positive implications for Apex Hotels. Meanwhile, the extent with respect to the volume of customers is also expected to increase to reach 22.6 million by the year 2025 (Gustavo, 2013). Moreover, the unexplored demand opportunities with respect to 13.1% that exists currently in the market is also expected to increase and reach 48.8% by the year 2025 (Del Mar Alonso-Almeida and Bremser, 2013). This indicates opportunities to fulfill for Apex Hotels but also the importantly high competition, which are inevitably by and large.
Domestic and International Competition: Being one of the most notable contributors to the GDP directly indicate that the state of the hospitality sector would be hyper-competitive by all measures and considerations. The state of tourism in the country have directly implied consequential situation in which the shrinkage of the market in question have happened under such consideration, most prominently secondarily valued destinations, towns and other ways of considering options (Line and Runyan, 2012). As a result, most of the focus have contemporarily been driven towards urban centers wherein all conditions reflect the situation according to the growing number of entities in total. Meanwhile, the overall state of the market in terms of competition is neither fully consolidated nor fully fragmented, instead remaining firmly at the center between the two. The dominating competitive players are largely dominated by domestic organizations, such as the Barcelo Group, Melia Hotels International and Eurostars Hotel among others (Fernández-Cavia et al., 2017). However, certain international players have certainly established their immense dominance upon the market at large.
However, these hospitality organizations generally do not have direct state of competition with Apex Hotels as ‘competitors’, which would involve those who purvey the options of economy hotels that are officially rated as either ‘3-stars’ or ‘4-stars’. The major competitor involves the international B&B Hotels, which are numerously present all across the country, especially with respect to this particular case (Gustavo, 2013). Iberostar Group also propose certain cases of these considerations in terms of the 4-star options like B&B had held for the 3-star ones. Room Mate, S.L. could be regarded in the same market category as Apex Hotels on the basis of highlighting and presenting the conditions through which would seem justifiable and relevant in raising the concerns at large (Line and Runyan, 2012). These conditions shall ultimately aid in presenting the possible scenarios with the help of which reflections would guide and establish the proper ways of how to work against the completion altogether.
Strategy for Market Entry: In light of these reflections, one can attribute how the market entry strategy needs to have immediate effects for Apex Hotels but also navigate through the hyper-competition. The latter conditions shall indicate that direct entry could entail significant accumulation of costs until the time the organization would require address all the important concerns, which would be exceptionally oriented towards the delivery of results (Heritage.org, 2021). Meanwhile, completely indirect options like franchising and licensing would only potentially affect even when domestic business initiatives are to be taken in order for to compete (Fernández-Cavia et al., 2017). Therefore, the most preferable entry strategy in this case is probably a joint venture, which would aid in determining the appropriate conditions across the board.
Key Target Markets
The important features in the markets of hospitality require carefully addressed conditions and factors, which would be relevant in specifying and addressing concerns all across the board. In terms of the details associating with psychographic and demo-geographic details referring to the consuming population since hospitality in Spain directly fall into the category of being the commodity market (Fernández-Cavia et al., 2017). Under these concerns, the state of demo-geographic primarily associate with on the basis of age, income, marital status and the purpose behind choosing hospitality service. This would require variations in geography, especially for Apex Hotels in terms of the differences that could be attributed to in Spain relative to its home country of the UK (Apex Hotels, n.d.). The basis of these differences in the characteristics identifiable with the customers could be seen by and large. The segmentation underlines and establishes important factors as they would need to be determined in terms of primarily lower age and income.
The relevance of segmenting must also address psychographic variables as the concerns regarding association with the hospitality service on the whole could be perceived and determined in terms of overall quality. In this vein, the determined outlooks and scenarios shall all focus upon the conditions and factors of qualities associating with various domain associated conditions and relations, which would be important (Heritage.org, 2021). These would include the perception over the state of furnishings in the rooms, the quality and availability of food, and other intangibles at play. When combined among all these factors, the results would reveal the following the following target market categories accordingly.
College Groups: With the options provided by Apex Hotels and Spain being such a prominent destination, it is important to take note and establish that a great bulk of the guests would potentially be younger in age, do not have a strong and significant source of income but would still want a sense of glamor, comfortability and style in their hotel accommodations to a certain extent. This would aid as the cost associated with Apex Hotels would not be as high, and would favor their attention with respect to active participation in terms of activities and behaviors, which would go beyond than just hospitability (Porcu et al., 2017). This targeted segment of the market shall constitute the most notable as multiple individuals would travel and make use of the offerings.
Rural Families/Groups: This particular targeted segment would constitute those people not living in urban areas and have lower income margins than others. The provisions along these lines shall entail and establish the conditions in terms of getting the best possible options economically, which shall be inherently provided across these factors. Moreover, they could arrive from the provincial regions of Spain as well as from other countries in the world (Line and Runyan, 2012). However, the most important point in this context would be to manage and keep control of all the provisions, as well as possibly deliver in terms of completely shattering expectations, which might have existed (Yoo, Lee and Bai, 2011). These details shall also involve the important factors through the help of which delivery of outcomes would seem realistic and possible by and large.
Short-Term Business oriented Individuals: The importance of low cost and short term stay needs to appeal not just to individuals who have business purposes in visiting Spain but also businesses that are involved in it. This would raise the question regarding the combination of appealing costs and other high quality options in the offerings that the hotel shall provide (Yoo, Lee and Bai, 2011). In such cases, this target market seems fairly obvious by all possible means one could establish as well as project (Line and Runyan, 2012). The relevance of the provisions availability would signify importance, and would require certain exceptional factors and conditions.
Brand Positioning Strategy
With the establishment of the target markets, it is now important to undertake the necessity of positioning the brand in the market. In these cases, the entire state of affairs reflecting upon the various entities and forces in the market would have to regard and address. Primary among them are the competitors with whose help the juxtaposition of the positioning would evidently come forth. In terms of the strategy, the key aspects shall adhere to the defining core values and beliefs, which had initially contributed in constructing the brand of Apex Hotels originally (Guisado-González, Guisado-Tato and Sandoval-Pérez, 2013). In this vein, the importance would be to retain the family friendly environment, which had been a great determining factor. However, the focus would change since the target markets in terms of prioritization would change themselves (Rodríguez-Algeciras and Talon-Ballestero, 2017). They would associate with a higher state of regard and considerations with the help of which younger college going groups of people would dominate in Spain rather than non-urban families in general.
The importance of these factors must be carefully noted at all times since the brand would also have to weigh the stark psychographic differences in what the hotels would provide contrasting young adults in groups and families. Clearly, the expectations of what each of these groups would refer to as enjoyment and entertainment must differ significantly (Guisado-González, Guisado-Tato and Sandoval-Pérez, 2013). In such cases, different service provisions made available by the company would need to transform as well in terms of giving the necessary results by and large. These would require proper establishment and focus upon the determinant contributors to the overall quality of different factors and variables, deliverable through the ways of obtaining results by and large (Guisado-González, Guisado-Tato and Sandoval-Pérez, 2013). Therefore, the quality could not be pursued as exceptionally high by these target groups of consumers but they need to be high enough in terms of passing some degree of tolerance.
Brand positioning must remain effectively associated with the outlook over quality as opposed to costs as the ultimate determining quality against everything else. These would be identified in filling the role of delivering the best possible solutions through the help of which better options in terms of its segment would be focused upon (Line and Runyan, 2012). The attractive propositions would combine and deliver all essential and important details related to the satisfaction of the best possible services, constituting accommodations, food and beverage, as well as other intangible factors, which would make the overall scenario justified across the board.
Marketing Mix/Standardization and Adaptation Decisions
The conditions highlighted with the positioning required in light of the Apex Hotels brand directly attribute and establish the conditions with the help of which potential concerns would be raised or described by and large. In these circumstances, the theory of adaptation rather than standardization would seem to relate with and establish the possible directions at large. The necessity of adaptation is clearly justified between the significant changed circumstances among the consumer market for those UK locations compared to Spain (Fernández-Cavia et al., 2017). Primarily, these are based upon the greater volume of customers as tourists, which need to be considered to an exceptional degree. The important factors related to defining and consolidating the outcomes are based upon making certain decisions based changes as well in terms to the overall marketing mix strategy (Guisado-González, Guisado-Tato and Sandoval-Pérez, 2013). They would be signified in terms of all the distinct factors and conditions with respect to the notion of adaptation, which would be important in terms of satisfying the necessary conditions of delivering the best imaginable results or outcomes.
Suitable Locations: The location selections for the initial market entry need to be based upon the most prominent urban areas in Spain, which are said to have the immense contributions in terms of providing the bulk of tourism in the country. The most notable cities of Madrid and Barcelona would be the two places in which the first Apex Hotels would be established (Martínez, Pérez and Rodriguez del Bosque, 2013). Furthermore, it is also important to address the fact that prominence need to be associated with the locations being placed at rather prominent places through which connective and facilitating conditions of tourism concerns would be properly established by all considerations (Fernández-Cavia et al., 2017). Under these circumstances the overlying conditions of the availability of such properties and the costs would need to be properly maintained. A great deal of the necessary establishment regarding this particular part of the mix must make use of the joint venture relationship very prominently.
Product Strategy: The two new hotel units established would have approximately 100 each since they are generally considered not as big. However, every unit shall possess a restaurant and a bar for which the satisfaction of the target consumer groups would be properly arranged for by and large. Under these contexts, it would be necessary to mention that the details under these conditions shall look to deliver the best possible outcomes at large. The allocation in terms of defining the product shall also constitute a couple of conference rooms in which the probable appeal to business-oriented clients could serve in terms of possible concerns and factors (Martínez, Pérez and Rodriguez del Bosque, 2013). These products shall also be provided with an open courtyard, as well as certain opportunities for sporting, which take less space as they are limited across the business concerns of Spain. The product strategy must maintain the fact that all concerns in terms of intangible factors like atmosphere shall have to provide with an open, festive and celebratory space, which nevertheless would signify comfort and safety within the room themselves (Martínez, Pérez and Rodriguez del Bosque, 2013). The décor and furnishings would have to suit such conditions at large, but nothing would be completely difference in terms of stark concerns by and large.
Pricing Strategy: The pricing by competitors in Spain possesses an average of £111 for all concerns, and this include those that are of higher and costlier tier that Apex Hotels serve. The segment of economy class can effectively go as low as £50-60 on an average (Martínez, Pérez and Del Bosque, 2014). All these conditions, however, underline a significance since economy chain of hotels do, in fact, vary greatly given the number of them that are actually present. They would dictate and point to the fact that notable and significant conditions across the board in terms of highlighting results would need to somehow associate with avoiding being as low as the ones that charge at that limit mentioned above (Martínez, Pérez and Del Bosque, 2014). This is certainly a major point of view that might be needed to be addressed in order for delivering the best possible conditions through which necessary results might be obtained by and large (Martínez, Pérez and Del Bosque, 2014). In that vein, the penetration pricing in order to actually establish the market need to be addressed as opposed to straightforward value-adding pricing strategy, which has been utilized in the UK for so long.
Marketing Communications: The importance of these concerns identifies and establish the conditions as they would relate with marketing all across the board. The relevance of being part of the same continent is an important aspect of consideration in the situation by all possible means (Martínez, Pérez and Del Bosque, 2014). These factors shall understand and point to the establishment of the common themes existing between them.
Communications Strategy: The theme commonly attributed to the communications would be to signify the high-quality options that Apex Hotels are bringing to Spain as a way of enhancing and challenging the entire industry by and large. They would also correlate and retain certain aspects of the traditional family based values and concerns, which would be important to establish by and large (Fernández-Cavia et al., 2017). The communications shall happen primarily with digital technologies, as well as through mass media since physical options in terms of external public spaces have been so consistently unavailable for such a long period of time.
Conclusion
In light of all these concerns, it has been recommended that the entry to Spain would be a viable option for Apex Hotels, as it would aid in growing and enhancing the business concerns and conditions at large. In light of all these conditions, it is easy to state and establish that all of these concerns and factors also express a great deal of concerns through which the positioning strategy, entry strategy and the marketing mix are all coherently delivered. The consequential joint venture partner could possess certain hardships for this organization to practically achieve but it needs to be consolidated properly and with exceptional research.
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