A SWOT Analysis of Le Meridien Dubai Hotel & conference Center

Researched and compiled by NCMT College Student

Abstract
One among the famous hotels in Dubai, the Le Meridien Dubai Hotel & conference
Center has, a few years ago, been acquired by the giant Starwood brand. Starwood Hotels
& Resorts Worldwide, Inc. has other famous hotel brands such as the Sheraton, the St. Regis,
the Westin, the Four Points, etc. These hotels are found all over the planet and they total up to
1000units comprises of various sizes and standards.

The Le Meridien Dubai Hotel & conference Center is a five star accommodation and service
unit located on the west coast of Ma him Island in the Dubai exotic tropical islands‟
destination. It offers the best competitive rates of its genre and targets groups, families and
businesses market segments. With that in mind, this hotel has a high potential demand for its
services. It has been exploring and exploiting these segments profitably up to now as per its
strengths and opportunities. Parallel to that, there have also been difficult times as per its
weaknesses and threats. This hotel has managed to navigate its way through its
business environment by facing the many changes that influences the micro and macro
environments of organizations.

This study is a snapshot of its current methods and strategies of management effectiveness and
efficiency. It portrays how this hotel is facing its internal and external business environments
so that it can generate profits and continuity within the hotel industry of Dubai. In the
management vocabularies; this report is a SWOT analysis of the hotel in question.

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Table of Contents
Introduction 01
The Le Meridien Dubai Hotel & conference Center Hotel 02
Organization Structure 03
Business Environment04
PESTAL analysis 04
Analysis of LE MERIDIEN DUBAI HOTEL Internal Attributes (strengths & weaknesses)
Analysis of LE MERIDIEN DUBAI HOTEL External Conditions (opportunities & threats)
SWOT Analysis Structure of LE MERIDIEN DUBAI HOTEL 10
Conclusion & Recommendations (goal & strategy formulation) 12
References 14
Appendices

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Introduction
Any analysis of an organization or business entity is recommended to begin by using
the system thinking approach towards it. This would help understand the organization’s system
inter relationship between its different components or departments within. Its application is
known as systems analysis and the important tool for this analysis is the systems thinking.
“System thinking is a way of helping a person to view systems from a broad perspective that
includes seeing overall structures, patterns and cycles in systems, rather than seeing only
specific events in the system ”www.systemsthinker.com, 2010. It is also defined as
“Systems thinking is a way of understanding reality that emphasizes the relationships among.

A system's parts, rather than the parts themselves” www.systemsthinker.com, 2010. Both the
definitions highlight the fact that system thinking is the understanding of the system on the
whole including all the parts of it and the relationships they maintain with each other.

Likewise this report is in line with emphasizing students of the hospitality management to
understand and use the system theory and approach for analyzing hotels‟ structure, operation,
performance, etc. Important part of systems thinking is the analyzing and evaluating of the
SWOT Analysis. This report focuses on both. In the same spirit, the data gathered for the study
have been sourced out by going to the subject hotel. It is to be noted that the management of
the Le Meridien Dubai Hotel & conference Center (LMD), was not cooperative. Statistical data
was not given, thus a quantitative analysis has been difficult if not impossible. The qualitative
system approach of the study has been mainly conceptualized and realized through personal
observations and questions on site.

Le Meridien Dubai Hotel & conference Center

In 1972 Air France launched Le Méridien as an extension of its business ventures to
support its growing airlines in many destinations around the world. From 1972 to 1994,
Le Meridien had 21 Hotels opened in Europe, Africa, and Middle East. In 1997, Meridien was
sold by Air France. Up to date Starwood owns 1000 hotels including 120 luxury & upscale
hotels in over 50 countries. Starwood Hotels acquired Le Méridien in 2005 and the following
year, Le Méridien transitioned into Starwood systems and standards.

LE MERIDIEN DUBAI HOTEL closed its doors in 2004 and after a one year renovating
construction project reopened as a 5 stars + hotel now part of the Starwood group. It has in total
124 rooms categorized as Suites (4), Superiors (38), deluxe beach front (11), and Standard
garden view (71). The hotel consists of two main restaurants; the Mangrovia (Buffet) and the
Cocoteraie (A la carte).There is a Tapas/Sandwich bar and a main bar (Le Patchoulie) attached
with the lobby.

The Le Mangrovia Restaurant is open from 7 to 11 am for Buffet breakfast and from 7 to 10pm
for Theme night Buffet dinner. The price is 45 euro per person excluding 10% service
charge. The La Cocoterai Restaurant is located at the pool side. It offers a la carte Creole
special & Grill for lunch, and, an a la carte fine dining experience for dinner. All prices
includes 10% service charge.
The rooms‟ rates per nighton B&B are 325 Euros for Standard garden view, 360 Euros for
superior ocean view, 425 Euros for Deluxe beach front view and 495 Euros for Suite. The rates
given exclude the 10% service charge. HB can be included at 45euros + 10% per person.

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 The core mission statement of LE MERIDIEN DUBAI HOTEL is regulated and the
Starwood group and most of the objectives alike. The training manager provided the two main
mission points they focused a tot upon. These are to provide to their guests not only a great
stay but also an active discovery that they themselves control. Their stay must inspire them to
be creative by giving them a new perspective. That LE MERIDIEN DUBAI HOTEL creates
for the guests feeling of personal growth, enrichment and a sense of community and affiliation
beyond delivering a beautiful design, an accommodating room and a comfortable bed.

Organization Structure of LE MERIDIEN DUBAI HOTEL

Decision.
Decision Making
Quality and timely decision making is essential for the success of any firm. In fact, how
an organization chooses to design its decision-making rules are one of the most fundamental
aspects of its internal design. A firm’s ability to make good decisions is particularly important
in the face of increasing global competition, and the greater uncertainty from exposure to more
competitors and a greater number more markets that this brings, (2004).

The decision making strategy of the LE MERIDIEN DUBAI HOTEL is as per its
Organization Structure (OS) portrays; it identifies a balance of power within the executives
personnel or the management segment and the junior authorities within the structure. There is
both a flat and tall tendencies within the structure. This would suggest that the decision takings
can be both centralized a decentralized. It is obviously reasonable to assume that these two
are used systematically and contingently as per situations arises. This is helpful in
deciding upon the most effective solutions to solving major and minor problems respectively,
and to yield maximum benefits from the globalized product markets and from the internal
potentials. As a member of the Global Starwood group, the centralize aspect of LE MERIDIEN
DUBAI HOTEL OS reflects the corporate ‟management system. It is a mean of having a
contingent control over its various hotels‟ market outlets.

Business Environment of the LE MERIDIEN DUBAI HOTEL

Business covers complex activities of industry and commerce involving organizing
production, delivering product to customer with ultimate objective of profit maximization.
Business Environment consists of factors that have a bearing on the business, such as the
strengths, weaknesses, internal power relationships and orientations of the organization;
government policies and regulations; nature of the economy and economic conditions; socio-
cultural factors; demographic trends; natural factors; and, global trends.

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PESTEL Analysis
Political and Legal factors: In Dubai there exists a strong socialist political regime and
a planned economy that is gradually being transformed into a more free type of market. This
dictates a mixed type of economy which means the government still holds major control over
the tourism industry. The political power is tested through an every five year contest decided
by the citizen. The next election is due in 2011 which gives LE MERIDIEN DUBAI HOTEL
one more guarantied year of the macroeconomic stability it is enjoying. It should be noted
that the government of the day offers many opportunities through concessions and minimum
policies and regulations for hotels. This is enjoyed by LE MERIDIEN DUBAI HOTEL as an
opportunity. As a small island state, there is a scarcity of labor to sustain the many hotels, thus
as a threat LE MERIDIEN DUBAI HOTEL has to import foreign labor increasing cost. The
Dubai Company Law of 1995 is the framework for the current legislation on corporate
governance locally. Under the Company Law, a company is a separate legal entity in which
Directors represent the company. Dubai belongs to the Indian Ocean Island state tourism
destinations below the line of equator which offers an ideal climate for the growing world
tourist market demand. In this group there are countries like Mauritius, the Maldives, Reunion,
Madagascar, Rodrigue which are direct competitors. Indirect competitors are Sri Lanka,
Malaysia, Vietnam, Thailand, Singapore, Myanmar, Cambodia, etc. Indirectly it affects LE
MERIDIEN DUBAI HOTEL by minimizing its potential customers though marginal.
As Dubai enjoys a stable political environment the hotels operates in a comfortable
environment benefits them both economically and politically. This compliments the
enjoyment of investments on an international playground with brands such as Starwood thus,
Le Meridien, Hilton, the Bayan Tree and the Constance group. This has brought major
economic gains for the country because of its political preferences. All countries have laws and
regulation that governs business so that it has a coneatrol of what is happening in the business
environment. Some laws are beneficial to parties concerns and some may create discomfort in
their business environment.

Economical factor:
Dubai is considered as a developing country. Due to the government policies and
treasure of national resources, the GDP growth has been increasing rapidly from last few
years. The NSB Statistical Bulletin August 2016 shows an increase in the Bed Occupancy per
night from previous years, from 24.3 to 33.7 in thousands. Visitor arrivals have increased
by 6% from 2015 in contrast to the first three months of 2016. This is an opportunity for LE
MERIDIEN DUBAI HOTEL. Dubai has exclusive tourism resources such as beautiful
beaches, all year warm climate, rich marine fauna and flora. It is among the most
expensive tourist destination on earth. Exchange rate Dubai Rupee (SCR) per US dollar ~12.50
(2016) compare to ~ SCR08.00 in 2013. The tourism sector and hotels provide major source of
income for industrial production from 12.3% in 2013 to 14.6% in 2016, thus the government
encourages through attractive laws and regulations, all to invest in the local industry. Increase
in hotels is evident and that means increase competition for the LE MERIDIEN DUBAI
HOTEL. The scale of economies and the scope of production have increased progressively,
and the base of technology also improved as well. An international competitive have mutually
increased in this industry affecting the macro environment. Then within the country
the government allowed schemes for the training, development and empowerment of the

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people in this sector, increase local specializations and skills. This leads to the LE MERIDIEN
DUBAI HOTEL business improvement.
The hotel contributes towards the economic benefits of the country, not only towards the tax
that the government receives or the employment made, but also what economist called the
multiplier effects.
The LE MERIDIEN DUBAI HOTEL believes in a policy of buying locally, in doing so helps
generates the multiplier effects within the micro economy. In simple terms it means that the LE
MERIDIEN DUBAI HOTEL creates other small businesses to operates and prosper, it creates
jobs for families, it excites the economic activities within the country, etc. As part of an
international group LE MERIDIEN DUBAI HOTEL is among hotels that the profit is leaked is
out into countries of origin. This is what economists described as leakages in the
system. In addition to that, the lack of specialists (especially managerial human resources) on
the local market, LE MERIDIEN DUBAI HOTEL has to import them thus leaking more
earnings.

Social factor:
Dubai has a small population increasing at a slow rate, currently estimated at 85000
of which a significant number lives in foreign countries. The workforce when removing
pensioners and scholars can be estimated at around 40000, thus importation of labor is
essential. Females are roughly equal to males which mean lesser potential workforce. The
above suggest a very high labor cost. Essentially above 95% of its populations are literate.3.6%
of their GDP is spent on education. This country has a rich diversity of cultures and social
behaviors inherited from their multiracial background, thus flexible to workforce
diversification. As the biggest employer, the tourism industry potentially employed 16.7%
of the country’s manpower, NSB Statistical Bulletin (2016).

The LE MERIDIEN DUBAI HOTEL participates actively in corporate social activities and has
a dedicated in service training program for its employees. The hotel promotes different
incentives to educate and motivate all employees. Besides donation to several orphanage
villages, the hotel contributes and hosts several activities that benefit the society in general. LE
MERIDIEN DUBAI HOTEL has a large intake of STA students every year for practical
trainings; this, in return benefit not only Le Meridien hotel but the Dubai tourism industry in
general.
In service training is a must at LE MERIDIEN DUBAI HOTEL as Starwood the parent
company stresses on it and has dedicated program. Cross exposure common practice in the
hotel and in return the hotel can identify potential staff for promotion.
Various activities are in place at the hotel to motivate their staff, such as monthly and yearly
staff award, be a guest program, transportation and free meals. A major incentive the hotel has
adopted is the introduction of service charge and yearly bonuses given to all staff.
Even with all these incentives, LE MERIDIEN DUBAI HOTEL are faces strong competition
to keeping its valuable staffs. Recently with the completion of Ephelia Resorts, manpower
decreases considerably, this in return has put a negative impact on the hotel. The question is
what has generated such movement of the staff? It was difficult to find as we were not able
to get access to a proper statistical survey to prove our hypothesis. The management also did
not provide it.

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Technological factor:
Dubai has a poorly developed transportation system. Tourist usually travels by expensive
taxis. There is an international airport, with water ways and inter air ways linking most of the
115 islands. The international communication is slow but reliable; the government is working
on linking through the fiber optic cable system. The country is relatively not too far behind the
world technological advancement, thus LE MERIDIEN DUBAI HOTEL enjoys the benefits
of such.

Environmental factor:
Due to its geographic location, Dubai is free from all types of natural disasters. There are
evidently no major natural disasters. It enjoys a rich ecological system as a main resource for
tourism. The LE MERIDIEN DUBAI HOTEL is no exception to that; it enjoys a beautiful
beach in a peaceful and quiet area.
Dubai has strict environmental laws that protect its territory, fauna and flora. The hotel has to
comply with all these rules and regulations that are in place. The country has a good reputation
toward the protection of its environment with almost 50% declared has protected parks.
This has set limits to which LE MERIDIEN DUBAI HOTEL has to comply with regards to its
expansion project to the property making it more attractive with added value.
LE MERIDIEN DUBAI HOTEL has a superb beach front view but with a reef barrier close to
its beach, this has made swimming difficult for guests. Even in cases that the hotel would like
to create any artificial swimming area the law prohibits them from doing so.
It is the responsibility of LE MERIDIEN DUBAI HOTEL to keep its coastal vegetation and
all its vicinity clean at an acceptable standard. LE MERIDIEN DUBAI HOTEL
participates actively in maintaining the marshes and mangroves protection program
surrounding the hotel. The hotel contributes in maintaining of the wetlands that surround its
property.
The hotel has to comply with all the environmental issues that include solid wastes and
wastewater that it generates. Even if it is a costly program, a considerable amount of their
budget goes towards waste removal and waste water treatment. The hotel has recently invested
substantial amount of capital towards a new waste water treatment plant that is more
environmentally friendly. Wastes should be disposed as per the environmental laws that are in
force. Any breach of these regulations will result in penalties or strict action taken against them
by the government.

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Key finding and analysis:
Dubai “tourism investment climate is ranked attracting in the international comparisons.
Micro- and Macroeconomic instability is still viewed as the biggest obstacle, followed by
corruption in the local economies. Other major obstacles include labor scarcity, low
specialization rate, tax administration favoring larger foreign corporate bodies and ignoring the
local entities which can help in the multiplier effect benefits, high costs of financing and
unstable labor regulations, high costs of living and uncertainty of the
„indigenous productivity”. The PESTEL analysis is a macro scanning from LE MERIDIEN
DUBAI HOTEL ‟s perspective. The factors have indirect impacts on hotels in the
country. LE MERIDIEN DUBAI HOTEL can yield both threats and opportunities from them.
Corruption in the local economies. Other major obstacles include labor scarcity, low
specialization rate, tax administration favoring larger foreign corporate bodies and ignoring the
local entities which can help in the multiplier effect benefits, high costs of financing and
unstable labor regulations, high costs of living and uncertainty of the
„indigenous productivity”. The PESTEL analysis is a macro scanning from LE MERIDIEN
DUBAI HOTEL ‟s perspective. The factors have indirect impacts on hotels in the
country. LE MERIDIEN DUBAI HOTEL can yield both threats and opportunities from them.

SWOT Analysis of Le Meridien Dubai Hotel & conference Center

This analysis identifies and analyses Strengths and Weaknesses within LE MERIDIEN
DUBAI HOTEL, as well as Opportunities and Threats revealed by information gathered on the
external environment. Itis use to develop plan affecting various internal and external factors,
and maximizes the potential of the strengths and opportunities while minimizing the impact of
the weaknesses and threats. It can be used when developing strategic plan or planning a
solutions to problems. Analysis of the external environment is vital for it is uncontrollable by
managers and affects the hotel. They can be the culture, economy, health, sources of funding,
demographics, etc., of the Dubai. The internal analysis examines capabilities of LE
MERIDIEN DUBAI HOTEL by analyzing its strengths and weaknesses especially within the
management areas. The external analysis looks at the main points in the environment, and
identifies those that pose opportunities and those that pose threats or obstacles to performance.

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SWOT Analysis Structure of LE MERIDIEN DUBAI HOTEL Strengths

Strengths
-Latest technological resources (internet,
satellite TV, POS, intranet, Key cards, etc.)
-Has a well established Brand: 'Starwood'
-Marketing is centralized at HQ
-The only large hotel with 4star rating- lower
rates (average annual room occupancy: ~70%)
-Has a well established reputation
-Equipped with a standard Conference Centre
-Significant number of continuous repeated
guests
-Excellent CSR programs (donations, strong
interaction with community, sponsorships, etc.
) -Lacks complete managerial control/low
-In-house incentives („2 b a Guest‟, cross
exposures, service charge, monthly/annual
employee awards, monthly resto-lunch,
teambuilding activities,
-Benefits from Starwood consistent trainings
&upgrading
-Plenty of space on property to
exploit(expansion)
Weaknesses
-Not utilizing potential human resource
abilities
-
Poor managerial quality (too dependent o
n
HQ)
-Poor staff's performance (lack of effective
control)
- Poor infrastructure/product quality &
Quantity
-Emerging competitors with better
products asper quality & quantity
decision making (? centralized from HQ?)
-Unreliability of staffs/unwilling and
uncommitted
-poor equipment's quality & quantity
-Needed importation of foreign labor (high
labor cost)
-Poor product supplies and scarcity of
quality products (freshness)

Opportunities Threats
-Dubai' Tourism dependency - main source of -Low frequency flights to and from
income western markets
-STB's constant international marketing -Opening of Ephelia targeting same
strategies- - market segment
Government's calls for partnership and supports - - Ephelia's new Conference Centre
-STA's constant development training of human -Dubai unstable economy - inflation-
resources Closure
- of Equator and Mahe Beach Hotels -Frequent world crisis - natural
-Political stability disasters, wars, financial crisis, etc.
- Fiber optic settings soon to be materialized -Govt. tax invasion increases payroll
-Increased flights in developed countries-high- (from 2.5% to 13.5%)
income earners -Constant influx of larger hotel
investments in the country
-Dubai high cost of living -expensive for
its market segment

POSITIVE NEGATIVE

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 Conclusion
As been detailed in the report, the many factors in the LE MERIDIEN DUBAI HOTEL
business environment are classified into internal from its microeconomic environment and the
external from its macroeconomic environment. The SWOT
evaluation specifically identified them into strengths and opportunities as the positive factors
that can be exploited and/or developed to yielding maximum benefits
and productivity. Weaknesses and threats are negative factors that can be explored and/or
disposed of depending on the situation. Turning them into beneficial elements is usually done
by using the positive to extract their benefits. The matrixes how LE MERIDIEN DUBAI
HOTEL use these strengths within the hotel to take advantage of these opportunities in the
external sphere? Secondly, how do LE MERIDIEN DUBAI HOTEL overcome the weaknesses
inside the hotel that prevent them taking advantage of these opportunities? Thirdly, how do LE
MERIDIEN DUBAI HOTEL use these internal strengths to reduce the likelihood and impact
of these external threats? Lastly, how do management plan to overcome the weaknesses that
will make these threats a reality? The answer to the matrix is theoretically simple as in
translating them into tasks for the Project Plan. This can be effectively done by the managing
by objective (MBO) approach

It should be noted that the management of this establishment were very uncooperative and that
has made this study practically impossible. This supports the reason why the report is focus on
a more qualitative than quantitative approach

But the management is a strongly decentralize one because therefore most of the executive
decisions are made and/or approved at the Headquarter in the USA. The two sister hotels in the
Dubai are periodically provided with new strategies and plans for implementing in
the locations. Questions still prevails
This hotel is located in an attracting and relaxing area with potential for growth that is not being
exploited. It is strongly recommended to any management team that take the challenge to
revise the mission statement with open objectives and try to utilize the internal factors of its
business environment to minimize the negative barriers. After all, management can only
control what are inside the organization. Opportunities from the outside can be explored to
eliminate the weaknesses from the inside. Any managerial decision should be conducted
through an analysis of both the internal and external spheres so as to yield maximum benefits
and eliminate maximum disadvantages. The LE MERIDIEN DUBAI HOTEL hotel is no
exception and it is actually not using its potential capabilities

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 References
1. Brickley, J., Smith, C., Zimmerman, J. (2004);
Managerial Economics and Organizational Architecture, 3rd Edition, McGraw-
Hill,
New York -Figure 1, NSB Statistical Bulletin, August 2010; Employment 2010 No.2,
Percentage of Formal Employees by Industry
2. All sectors, January to March 2010-System Thinking [Online] Available
from:www.managehelp.org/misc/defn-systemsthinking.pdf [Accessed: 20th
July2010]-
3. Table 1, NSB Statistical Bulletin, July 2010;Visitor Arrivals by Country of Residence
4. TheSystemThinker[Online]Availablefromhttp//www.thesystemthinker.com/sytemsthi
nkinglearn.html [Accessed: 14th July 2010]-Wendy Boniface, July 2010:
5. Training Manager, Le Meridien Dubai Hotel & conference Center & Spa, Granddames,
Mahe, PO BOX 626

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