Strategic development and planning in the New Zealand hotel industry

Abstract

Individual business success is often the outcome of competent managers utilising strategic planning and development at macro (the business/industry environment) and micro (the business unit) level. The Global Competitiveness Index ranks New Zealand 47th out of 60 countries for the availability of competent senior managers – managers who manage within the macro and micro environment. New Zealand managers have been identified as being weak in: strategic thinking, people and communication skills, leadership, networking and relationship development, international experience and technical skills such as marketing (Mallard, 2006a) – holistically factors that enable industry strategic development and planning and country economic transformation. Given the above position, this research is a stock-take / benchmark of our current position of Strategic Development and Planning (SDP) – as part of management competency, with participants being managers from major hotels in New Zealand. The overall conclusion as presented by hotel managers themselves is that SDP at various levels, in general, is lacking, with managers acknowledging more needs to be done in this regard to ensure business and industry profitability and sustainability. Hotel managers have mixed experience in engagement with SDP and are often restricted in engagement in SDP by the day-to-day issues of operations management. Potentially the more an operation is ‘systemised’, governed and SDP developed by Head Office, the less a manager needs to engage in SDP. This presents lost opportunity for all stakeholders. In general, managers need to more clearly understand the full complexities of SDP and work on advancing skills in these areas as they themselves acknowledge under a theme of Managerial Competencies (Theme 7.4). Potentially the ongoing industry challenges highlighted in this research of: room rates and yield, seasonality and airlines, labour and room stock (supply) are a result of a lack of industry SDP, yet given the time to consider these, many solutions have also been presented. A noticeable theme from this research is the general commonality of challenges and solutions from managers in differing locations and property size. Linking this to the newly developed sub-theme of ‘collectiveness’ gives hope that now managers may be more comfortable in pushing for an element of industry SDP. Managers’ in this research were very clear on two particular points: (1) That as an industry there needs to be more SDP to ensure the long-term sustainability of the industry, and (2) The challenges that the industry faces are not insurmountable with potential solutions within their grasp, but action is required by all. Indeed these points are a demonstration of ‘strategic thinking’ and may have been a result of having ‘time to think’ – the opportunity to spend time ‘on the business as well as in the business’; a key factor that may assist New Zealand’s movement to economic transformation and in the future lift our ranking in the Global Competitiveness Index.