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Launching a Budget Hotel Chain in Austria – about Finding Markets and Partners

03/07/2019

Sommersemester 2019 - Andreas Weber

EXECUTIVE SUMMARY

Mr. Andreas Weber is co-founder of „Fairsleep", a hotel brand carried by 15 hotels and motels in Austria and Germany. Starting out as the owner of an AVIA gas station in the city of Gmünd, Mr. Weber has proven his entrepreneurial drive by expanding his business with the hotel, as well as a restaurant. His vast knowledge in the hospitality industry and his entrepreneurial acumen have caused him to seek to seize an opportunity to fill a presumed market gap in the hotel industry. Mr. Weber approached the project team with the task of determining the attractiveness of a market entry with a lean, low-budget hotel chain. The chain is supposed to enter the market in cooperation with a strong and established brand partner. A comprehensive market entry strategy was to be provided by the project team, taking into consideration the three core issues of market attractiveness, ideal locations and suitable partners.

Method and Outcomes

A market analysis consisting of expert interviews and online research helped to identify the four major target groups. Their common and individual needs were examined to determine the main requirements for the hotel chain and its partners. An analysis of competition through expert interviews and a market screening helped to determine whether and where there exists an opening for a budget hotel chain in Austria. A gap in the budget hotel chain industry was revealed to exist outside of metropolitan areas, where no hotels are run by direct competitors. The outcome of this analysis of competition was the basis for step one of a two-step locations analysis. After locations occupied by direct competitors had been eliminated in step one, step two through the analysis of tourism data served to locate the counties with the highest market potential. In the final phase of the project, a market screening was used to identify synergetic cooperation partners to enter the market with. Three potential main, or A-partners, able to provide a strong brand name and space for the hotel were found in the previously uncovered locations. To satisfy demands not covered directly by the hotel chain or respective A-partners, areas for local B-partners were identified.

Strategic Recommendations

The client is advised to choose from the presented A-Partners in accordance with his preferred mode of market entry. Regardless of his choice, the final concept must cater to the largest possible audience in order to prevail. This is to be achieved on the one hand by meeting customers’ basic requirements via the employment of an array of partners. On the other hand, through the consistent incorporation of local elements, a "standardized regionality" approach will enable the chain to achieve a priceperformance ratio superior to that of local competitors without compromising its main proposition of functionality and affordability. Integration into the A-Partner’s customer retention scheme needs to be prioritized as it is of paramount importance for creating and sustaining a lasting customer base. Lastly, careful examination of the market environment of individual locations and the aptness of B-Partners is crucial when deciding where to start; for that purpose, the client is provided with according criteria that ought to be considered.

Cooperation Partner

  • A. Weber GmbH
    Prof. Krejci Graf Str. 2  
    3950 Gmünd
    Österreich

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Contact Person

  • Viktoria Brunner
    viktoria.brunner@s.wu.ac.at

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Student team

  • Alexander Luza

  • Felix Gradinaru

  • Lukas Punzet

  • Viktoria Brunner

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Project-Manager

  • Sophie Quach, M.A.

  • Linn Kretzschmar, M.Sc.

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