Kathryne Von Helms

Executive Summary

The purpose of this report is to provide a situational analysis of the Ritz Carlton Philadelphia, and determine areas of strengths, weaknesses, opportunities, and threats. The first and second part of this report will cover the background of the Ritz Carlton LLC Company and the Ritz Carlton Philadelphia specifically. With a credible standard of service and a path to success under its mission, vision, and strategic goals, the Ritz Carlton is an upscale brand that provides luxurious amenities to its guests. The third part of the report will focus mainly on the Ritz Carlton Philadelphia’s target market. With many different segments, like upper/middle class, business travelers and meetings/events, the third section will focus on the upper/middle class as being the most prominent group of people to choose the Ritz Carlton. Afterward, the report will discuss the psychographics of this group and determine why these individuals choose to invest in luxurious brands like the Ritz Carlton.

The fourth section of this report will go in-depth to identify the competitors in the Philadelphia area and determine how the Ritz Carlton sizes up to them. Using this information we can determine if the Ritz Carlton Philadelphia’s would meet the expectations of their primary target market. Additionally, we will cover the strengths and weaknesses as compared to their competitors and identify what the Ritz Carlton Philadelphia does well and its drawbacks. The fifth section will cover a macro/PESTE analysis, where I identify opportunities and threats within the many political, economic, social, technological, and environmental influences affecting the Ritz Carlton Philadelphia. Afterwards the report will touch upon a micro analysis, where suppliers, publics, and marketing intermediaries are discussed.

To conclude this report, a SWOT table will be shown at the end to summarize the Ritz Carlton Philadelphia’s strengths, weaknesses, opportunities, and threats, as well as briefly summarize the report afterwards.

Tables of Contents

1. Ritz Carlton Background………………………………………………………………….

1.1 Ritz Carlton Philadelphia……………………………………………………………….

2. Mission, Vision, and Goal Strategic Analysis……………………………………………..

2.1 Gold Standard…………………………………………………………………………..

2.2 Mission Statement……………………………………………………………………….

2.3 Vision……………………………………………………………………………………

2.4 Strategic Goals………………………………………………………………………….

3. Target Market……………………………………………………………………………….

3.1 Overall Market Segmentations …………………………………………………………

1. Upper Class & Middle Class………………………………………………………..
2. Business Travelers………………………………………………………………….
3. Meetings & Events………………………………………………………………….

3.2 Psychographics………………………………………………………………………….

1. Lifestyle…………………………………………………………………………….
2. Social Status…………………………………………………………………………
3. Exotic Experiences………………………………………………………………….

4. Internal Analysis…………………………………………………………………………….

4.1 Identify Competitors…………………………………………………………………….

1. The Rittenhouse & AKA Rittenhouse………………………………………………
2. Kimpton Palomar & Kimpton Monaco……………………………………………..
3. The Logan…………………………………………………………………………..
4. Sofitel Hotel…………………………………………………………………………
5. The Bellevue………………………………………………………………………..

4.2 Side by Side Comparison……………………………………………………………….

3. Strengths & Weaknesses………………………………………………………………..

1. Strengths……………………………………………………………………………
2. Weaknesses…………………………………………………………………………

5. External Analysis……………………………………………………………………………

4.4 Macro Analysis…………………………………………………………………………

1. Political……………………………………………………………………………..
2. Economic……………………………………………………………………………
3. Social……………………………………………………………………………….
4. Technological……………………………………………………………………….
5. Environmental………………………………………………………………………

4.5 Micro Analysis………………………………………………………………………….

1. Supplier……………………………………………………………………………..
2. Publics……………………………………………………………………………….
3. Marketing Intermediaries……………………………………………………………

6. Summary & SWOT…………………………………………………………………………

1. SWOT Table……………………………………………………………………………
2. Summary………………………………………………………………………………..

1. Ritz Carlton Background

1.1 Ritz Carlton Company

With over 100 years of history and a luxurious brand that cannot be mistaken, the Ritz Carlton embodies the finest hotel services within the hospitality industry. Established by Albert Keller, who bought and franchised the name in the early 1900’s, Ritz Carlton franchises were established in cities such as Boston, Philadelphia, Boca Raton, and Atlantic City in the 1940’s (Luxury Hotels & Resorts). As the first Ritz Carlton to revolutionize the hotel industry, the Boston location set the bar for all Ritz Carlton establishments in future years to come. With amenities like gourmet cuisines, private baths in each guest rooms, and personalized guest experiences, the Ritz Carlton Boston paved the way for luxurious hospitality for other hotels chains and future Ritz Carlton’s alike (Luxury Hotels & Resorts). In 2018, there are currently 40,000 employees working for the Ritz Carlton brand, continuing its success through extensive training and providing the unprecedented service it is known for (Luxury Hotels & Resorts).

In 1983, the Ritz Carlton Hotel Company was formed and led by Colgate Holmes. Under Holmes, the Ritz Carlton spread across the United States and by 1992, there were 23 Ritz Carlton’s established and operating across the country (Luxury Hotels & Resorts). In 1998, the exceptional hospitality that the Ritz Carlton had provided was capturing worldwide attention, which lead to Marriott International’s decision to purchase the hotel franchise. Since the purchase, Ritz Carlton has continued to grow and expand across the hospitality industry, and several branches have been opened thus far. In 2000, the Ritz Carlton Residences opened its first location in Washington, DC, and their first Destination Club location in Aspen, Colorado in 2001 (Luxury Hotels & Resorts). As the years have progressed, the Ritz Carlton has grown exponentially and is now serving guests worldwide with 91 hotels across 30 different countries. This luxury brand has received every single major award the hospitality industry can receive. For example, the Ritz Carlton has received the J.D. Power  North American Hotel Guest Satisfaction Index Survey 2017, the AAA Four and Five Diamond Award January 2015, Best Hotel Brand for Customer Service, and many more (Luxury Hotels & Resorts).

1.2 Ritz Carlton Philadelphia

Originally built for the Girard Trust Company between 1904 and 1908, the former bank building features grand architecture and pillars that reflect a classical era style (The Ritz Carlton Philadelphia). In 2000, when the building was transformed into what is now the Ritz Carlton, this grandiose classical style is now blended with modern touches, located in the heart of Center City, Philadelphia (The Ritz Carlton Philadelphia). The Ritz Carlton Philadelphia offers spacious suites, like Presidential Suites and Governor Suites, to more modern one-bedroom suites, while still maintaining a luxurious feel in all rooms. All rooms have a fantastic view of the city or city hall, and feature amazing amenities that budget hotels or economy-level hotels would never have (The Ritz Carlton Philadelphia).

Aside from rooms and suites, the Ritz Carlton Philadelphia offers delicious Latin cuisines in its fine-dining area. This ambiance is perfect for couples and those looking for a romantic dinner, which the Ritz Carlton never fails to deliver by following its Gold Standard. After dining, guests can head over to the Richel D’Ambra Spa & Salon where massage therapies and salon services are offered to unwind, relax, and enjoy their time at the Ritz Carlton Philadelphia (The Ritz Carlton Philadelphia).

With over 26,000 square feet of event space, the Ritz Carlton Philadelphia is capable of hosting weddings, team building retreats, training seminars, meetings, and other medium-to-large scale events (The Ritz Carlton Philadelphia). The Grand Ballroom can fit 600 guests and provides a pre-function area for receptions, a large screens for projections, and customizable catering menus for all types of wants and needs (The Ritz Carlton Philadelphia). With the city of Philadelphia at its doorstep, the opportunities are endless for guests staying at the Ritz Carlton.

2. Mission, Vision, and Goal Strategic Analysis

While this report is focused on the Ritz Carlton Philadelphia, all Ritz Carlton’s within the hospitality industry follow the same Gold Standard, mission statement, vision statement, and strategic goals to keep their properties in sync. For section 2 of this report, the Ritz Carlton LLC Company will be discussed in broad terms but can be directly related back to its Philadelphia location. In the diagram below, you will see the Ritz Carlton’s famous Three Steps of Service, motto, employee promise, and credo.

2.1Gold Standard

The Ritz Carlton credits themselves with providing the “Gold Standard”. These standards are the foundation of the Ritz Carlton Hotel Company, and exemplify the values by which the Ritz Carlton operates and makes decisions by (The Gold Standard). The standards hold true for their mission, vision, goals, motto, and steps to service, and helps provide a basis for employees, managers, and executives to follow. By implementing policies and holding everyone accountable to such high standards, the Ritz Carlton is able to flourish and provide the exceptional service it is known for (The Gold Standard).

2.2 Mission (What Business Are We In?)

“The Ritz-Carlton is a place where the genuine care and comfort of our guests is our highest mission. We pledge to provide the finest personal service and facilities for our guests who will always enjoy a warm, relaxed, yet refined ambience.”  (Luxury Hotels & Resorts). This mission statement, promptly displayed on the Ritz Carlton’s website, shows their attitude towards providing the best experience possible.  The Ritz Carlton claims to go above and beyond in their mission, and uses bold words like “finest” and “refined ambiance” that really sets the bar for the type of service they are providing their guests. Because the have established this mission statement, they cannot possibly strive for anything lower than the absolute best, hence why the Ritz Carlton is recognized as a luxury brand within the hospitality industry. These luxury services define the business that the Ritz Carlton is in and the people that they serve, who are wealthier in social class and spend more on grandeur services.

2.3 Vision (What Do We Hope to Accomplish?)

“The Ritz Carlton inspires life’s most meaningful journeys”. (Luxury Hotels & Resorts) This short but simple vision statement goes along with the Gold Standard credo that the Ritz Carlton Company operates under. A vision statement is a proclamation of commitments and objectives that the organization aims to follow throughout its decision making process. The Ritz Carlton exemplifies this vision statement through numerous actions and policies, but one thing they follow in-line with their vision statement is their Steps of Service (The Gold Standard). The first step is to greet each guest with a warm and sincere greeting, the second step is to use the guest’s name while fulfilling each guest’s needs, and the third step is to provide a fond farewell while also using the guests name. These steps fall closely with their vision statement because they are providing a meaningful and heartfelt experience to hopefully inspire each guest through their journey as they enter and as they leave (The Gold Standard).

Their Employee Promise also falls in line with their Vision Statement. Stating, “At The Ritz-Carlton, our Ladies and Gentlemen are the most important resource in our service commitment to our guests. By applying the principles of trust, honesty, respect, integrity and commitment, we nurture and maximize talent to the benefit of each individual and the company.

The Ritz-Carlton fosters a work environment where diversity is valued, quality of life is enhanced, individual aspirations are fulfilled, and The Ritz-Carlton Mystique is strengthened.” (The Gold Standard). By valuing their employees, employees are then able to value and inspire the guests entering into the Ritz Carlton through all walks of life. By doing this, the Ritz Carlton hopes to inspires its employees who then continue to inspire its guests throughout all of life’s journeys.

2.4 Strategic Goals (Developing The Company’s Best Assets)

In order for their strategic plans and goals to stay relevant, the Ritz Carlton believes all employees should take part in creating and implementing their strategic goals in order for them to be readily achievable. While the senior management may create the plan, it is up to the mid-level employees to carry it out in everyday functions (Is Your Strategic Plan D.O.A.?, 2018). Defined as the “Roadmap”, this plan is comprised of three important pillars: a definition of each element of the strategic plan, rationale on why a change was or was not made, and a description on how to implement each goal. This system lays out what needs to be done and make each employee responsible for the success of the company (Is Your Strategic Plan D.O.A.?, 2018). By doing so, they are developing the company’s best capabilities by making every employee carry their fair share of work and making everyone accountable for the company’s success.

3. Target Market Profiling

This target market analysis will highlight the direct audience that the Ritz Carlton Philadelphia plans on marketing and selling to. With many factors such as age, gender, race, ethnicity, and income levels, these traits can be examined to further marketing techniques and to make sure the Ritz Carlton is providing exactly what its target demographic needs. We will also be taking a look at the psychographics within their target market. While a target market describes who is buying your product, psychographics describe why your target market is buying your product.

3.1 Overall Market Segmentations

1. Upper & Middle Class: The Ritz Carlton is considered a luxury hotel, and with that comes an expensive price tag. This expensive price tag can typically only be afforded by wealthier individuals, who are not price conscious. Because the Ritz Carlton offers a unique and unforgettable experience, and wants its customers to enjoy the finer things in life, they are able to offer their rooms at a premium rate. Serving high-profile people from celebrities to wealthier individuals, the Ritz Carlton’s rates range from about $300-$400 per night, and go upwards of $1,000. That means that if a couple were to stay at the Ritz Carlton in the month of October from Friday to Sunday, it would cost them roughly $700 total. At the Philadelphia location, 72% of people who have stayed at the Ritz Carlton say that it is best for couples, while the other 28% say it is best for families (Luxury Hotels & Resorts). With that being said, their typical customers will most likely be wealthier couples looking for a weekend getaway.
2. Business Travelers: Business travelers are a tremendous sector that the Ritz Carlton provides for. Because their companies are paying for their travel expenses, business travelers are not conscious of costs. Business travelers are much more likely to choose an upscale or luxury hotel, simply because they are not the ones paying for it (Business travel spending U.S. 2011-2017, 2018). Providing exceptional amenities, meeting space, and a business center, the Ritz Carlton allows its business travelers to make use of these extra functions for all their business-related needs (Luxury Hotels & Resorts). Additionally, the Ritz Carlton is located in the heart of center city, making it almost effortless to access public transportation, taxi services, or uber.
3. Meetings & Events: Similar to individual business travelers, the Ritz Carlton Philadelphia also sells a large portion of its rooms and venue space to corporate functions and business meetings. Traveling in large groups, these businesses typically need an upscale hotel that provides meeting and venue space for its many programs. For example, the Ritz Carlton Philadelphia has a Plaza Ballroom that is 1950 square feet in size, with dimensions of 56 x 35 feet (The Ritz Carlton Philadelphia). This venue space offers reception seating for 150 individuals, conference seating for 44 individuals, and theater-type seating for 100 individuals (The Ritz Carlton Philadelphia). For the Ritz Carlton Philadelphia, is it important to please this market as they will likely use the venue space again if they are happy. Many organizations have partnerships with hotels and meeting spaces, so creating these bonds is crucial for repeat business. To the left is a diagram of the Ritz Carlton Philadelphia’s “Plaza Ballroom”, that can be utilized for companies and organizations alike.

Given the above information, the Ritz Carlton Philadelphia’s primary customers are upper class and middle class couples. Mainly traveling for leisure purposes, the majority of the people choosing to stay at the Ritz Carlton are those who have money and are typically making this money to spend it on name brand and luxury products and services.

3.2 Psychographics of Upper & Middle Class Couples

1. Lifestyle: The Ritz Carlton Philadelphia’s wealthier target market customers choose to purchase its rooms and suites because of their lifestyle. By either growing up in a wealthy family or obtaining a job that pays very well, people with more money tend to enjoy luxurious amenities (Bisht, 2016). These people pay more for luxury brands because of the standards that are associated with it. Like fine-dining experiences or paying more for a designer handbag, people living with a high-class lifestyle typically choose the finer things that the tourism and hospitality industry has to offer because they live this lifestyle on a daily basis (Bisht, 2016).
2. Social Class: Being from the upper middle class or upper class segment, people with a higher social class will have more money to spend on experiences and exceptional services. With premium pricing, the Ritz Carlton Philadelphia provides this experience with a hefty price tag, one that is affordable by their target market (Maguire, 2017). They are choosing to stay here not only for the exceptional service, but simply because they can afford it. To maintain a high social status, sometimes these people will invest their time and money into luxury brands to outwardly express their status (Maguire, 2017). With designer items and luxurious hotels like the Ritz Carlton, putting their money towards these items and experiences shows the rest of society their
3. Exotic Experiences: By 2022, it is expected that luxury travel will have produced in $1.15 billion in revenue worldwide (Bisht, 2016). Luxury travel is the fastest growing market in the travel industry, and it is mainly due to people’s desire to experience something unique. The Ritz Carlton’s upper/middle class target market are people willing to pay for an experience that is different than the norm. Within this market, Baby Boomers are dominating the luxury travel market because of their higher disposable income and less health constraints than older generations (Bisht, 2016). They typically do not have the responsibilities of caring for children because they have all grown up and moved out, and tend to be in senior management level jobs that pay well as opposed to Millennials going into entry level jobs and Generation X’ers who are still working their way up (Bisht, 2016). With a high desire to experience exotic services and the right amount of disposable income, Baby Boomers are a prime target for the Ritz Carlton Philadelphia.

4. Internal Analysis

For the internal analysis, this section will be focusing on the other leading luxury hotels in the Philadelphia region. Each luxury hotel offers unique amenities that some people find more valuable than the Ritz Carlton Philadelphia. Based on our demographics and psychographics, the typical consumer of the Ritz Carlton Philadelphia expects certain upscale amenities, some of which are offered at many of the other competing hotels in Philadelphia. After identifying our competitors, we will look at the strengths and weaknesses the Ritz Carlton possesses that could potentially impact our target market.

4.1 Identifying Competitors

1. The Rittenhouse & AKA Rittenhouse: The Rittenhouse Hotel is located at 210 W Rittenhouse Square between Walnut and Locust Street and was originally a mansion for the Cassatt family. Eventually, this property was converted into the grandeur hotel it is today (Middleton, 2018). Opening in 1989, this hotel offered 118 luxury rooms at a premium price. With an upscale bar and eatery, The Rittenhouse hotel rivals with the Ritz Carlton Philadelphia in terms of customer service, food, and differentiation (Middleton, 2018). AKA Rittenhouse, located at 135 South 18th Street between Moravian and Walnut Street, is another luxury hotel in the Rittenhouse area that is slightly cheaper but offers similar luxurious experiences. 12 stories high, the AKA Rittenhouse has a modern twist while offering a gym and on-site kitchen to its guests (Middleton, 2018). From studio rooms to two bedroom suites, the AKA Rittenhouse rivals with the Ritz Carlton Philadelphia in terms of price and differentiation as well.
2. Kimpton Hotel Palomar & Kimpton Hotel Monaco: The Kimpton Hotel Palomar is a boutique hotel located in Rittenhouse Square that offers luxury suites and views of center city from its grandiose windows. With in-room spa treatments available, guests are able to choose up to 80 minutes of massages right in the comfort of their room (Middleton, 2018). Highlighting its comfort and spa services, the Kimpton Hotel Palomar competes with the Ritz Carlton Philadelphia in terms of convenience and guest comfort (Middleton, 2018). The Kimpton Hotel Monaco is another Kimpton property located in Old City that mixes a modern style with historical touches. Opening in 2012 and offering 268 rooms, this Kimpton location offers in-room spa services as well, yoga, and free wine tastings for its guests (Middleton, 2018). With a rooftop bar and a beautiful view of the city, the Kimpton Hotel Monaco offers unique amenities that rival the Ritz Carlton Philadelphia.
3. The Logan Hotel: Where the old Four Seasons used to be located, the Logan Hotel took over this property and features 391 rooms with unlimited beautiful views (The Logan Philadelphia). The Logan offers an on-site eatery and steakhouse that specializes in farm-to-table dining. Additionally, The Logan offers a rooftop lounge, called Assembly, and spa services that highlight deep tissue massages and stress relief relaxation procedures (The Logan Philadelphia). Right near Benjamin Franklin Parkway, The Logan is a prime location for any type of luxury traveler looking to explore Philadelphia.
4. Sofitel Philadelphia: While slightly more affordable than some luxury hotels in Center City Philadelphia, Sofitel has 306 hotel rooms with a stylish flare (THE HOTEL). Eating at Liberte Lounge, guests can enjoy French cuisines and unique cocktails at the Sofitel’s bar (THE HOTEL). This pet-friendly hotel has 24 hour room services, a business center, a fitness center, and valet parking (Middleton, 2018). Rivaling with the Ritz Carlton Philadelphia in terms of price and uniqueness, Sofitel has many services to offer at a decent rate.
5. The Bellevue: Operated by Hyatt, this hotel is located near the Avenue of the Arts, and boasts plush beds, marble bathrooms, and modern style. The lower level of The Bellevue features on-site shops like Tiffany & Co., Ralph Lauren, and many other select brands for its guests to enjoy (Middleton, 2018). On the 19th floor, The Bellevue offers a fine-dining eatery with an American flare and balcony seating and amazing views of Center City for its guests (Middleton, 2018).

4.2 Side by Side Comparison