Victoria court – An Analysis
By Ivan Lee, R080230
Situation Analysis
Karl Velhagen, general manager for the Victoria Group, is perplexed as to what else they have to do for Victoria Court that will chart the future strategy for the company. Angelo King first founded the group in 1970 when he saw the opportunity in motels here in Manila. His first outlets were in Pasay, Caloocan, Pasig, Malabon and Manila. Anito Lodge was the first brand of motel for the group which was used for the first motel in Pasay City. It was a lucrative business that Angelo began a rapid expansion in nearby cities. In the 1980’s, Angelo’s two sons joined the company and the group started to pursue a second round of expansion as well as improvements in terms of operations and motel facilities.
With the retirement of Angelo King, Victoria Court Group separated from Anito Lodge under the leadership of Archie King. He vision was to establish Victoria Court as the premier drive-in motel of the country. The first Victoria Court was a thirty-eight room facility in Pasig City where Archie was able to test his vision for the group. After the success of the Pasig Victoria Court, Archie decided to remodel all his “motel inheritance” with the similar vision. The group even invested in an apartment building in Malate and converted it into a hotel called Hotel La Corona which signalled the groups’ entrance into the hotel industry. Expanding to 9 drive-in motels and a three-star hotel in Malate by 1986, the Victoria Court Group began to professionalize its operations. They hired a professional service manager in the person of Karl Velhagen and began rethinking their overall strategic plan. After studying their business and crafting the start of their overall strategy, the group began repositioning the Victoria Court brand. They wanted to change the negative image of a motel as it was usually associated with anything sleazy and illicit sex in the country. Part of their brand repositioning was to overhaul the practices and the look of Victoria Court. Employees were asked to wear appropriate uniforms and were asked to undergo retraining programs. Thematic rooms were introduced while things associated with what Filipinos think of in a motel were thrown out (I.e. room bolts, kinky stuff). Food and beverage being served were replaced and a wine list was introduced. Marketing the Victoria Court brand was introduced which is something quite new for the motel industry. Even the way that Victoria Court conducts its usual business was changed when discount cards – a staple of the motel industry in the Philippines, were eradicated or at least was somewhat lessen.
By improving on these things, Victoria Court made itself the premier drive-in hotel in the country. Of course, these changes made them a more expensive “hotel” to stay in, having a 30% mark up in deluxe rooms and almost 50% for suite rooms versus their competitors. This, of course, is seen by the group as another positive differentiating factor.
From a business model perspective, Victoria Court Group seems to be thinking ahead of its competitors. The group has been introducing many “first” in the industry, from professionalizing its operations to offering bigger and better rooms to marketing their brand. The business model of the group which is to “offer quality lodging with facilities custom-made for guest’s ultimate satisfaction” was central to the group’s strategy and plans. The group committed itself to changing how the motel industry was perceived to be in the country and became the leading force in the industry for change. The efforts of Karl Velhagen to professionalize the group’s operations made their business strategy clearer with the introduction of company mission and vision as well as an overall blueprint of what they want to become.
From a marketing perspective, Victoria Court Group making every effort to reposition their Victoria Court brand from the sleazy image a motel has into something more classy and relevant to everyday Filipinos. Incorporating every aspect of their operations, product and services into their marketing campaign was a good move for the group as it covered virtually every aspect of their business into one coherent marketing strategy. They however did not change their Victoria Court brand name and wanted to still use it in an industry that was unwilling to change. Victoria Court, long been synonymous with the motel industry, was changing everything according to their business concept backed by a strong marketing campaign – except for their brand.
From an operations perspective, Victoria Court Group was also changing the way they do their day to day business practice to conform to the new business strategy. Learning, training and development was introduced to the staff to make them more efficient in the new business paradigm. Old business practices, such as coupon giving and how they deal with customers were being eliminated and changed. Restaurant and bar menus were being revamped. In short, the group was aligning their operations with what business strategy they were trying to pursue.
Problem Analysis
Despite the brand repositioning that they did, the Victoria Court Group still feels that they have not done enough to change their image. Somehow, Filipinos still see the old motel in the new Victoria look that they have worked so hard to change. Worst, other motels are just riding on what they have been trying to do – which is to elevate the standards of the whole industry, for their benefit without any cost to them. The problem now is what the Victoria Court Group intends to do which will then chart the future strategy of the company in the years to come.
Alternatives Generation
Some alternatives are open to the Victoria Court Group:
<![if !supportLists]>a.) <![endif]>Brand repositioning has elevated the status of Victoria Court brand – maybe not to the extent that the group hoped for but it cannot be argued that it has not somehow changed it. Continuing their brand repositioning in the hopes that they can create their own segment in the near future can be a good prospect for the group. This, however, requires constant innovative thinking and process improvement. Without these, others will just continue to copy what Victoria Court has been doing. It should also be noted that the Victoria Court Group is in the 4th year of repositioning themselves in which they have done remarkably well. Brand repositioning takes time to develop and is a never ending process.
<![if !supportLists]>b.) <![endif]>Develop Hotel la Corona brand and bring it p to speed with the Victoria Court Brand. The group can run two brands to distinguish themselves from the others. Developing La Corona brand will give the group an edge that will be very hard to copy for their competitors and will give them an advantage in terms a lot of ways. For one, experiences between the operations can be shared and best practices can be learned from.
<![if !supportLists]>c.) <![endif]> Get out of the motel industry and create a whole new segment for Victoria Court. This will require the group to rethink their whole business strategy and craft a new one that will take advantage of their inherent strengths while at the same time, prevent their competitors from either copying them or free loading in their business strategy.
<![if !supportLists]>d.) <![endif]>Sell the Victoria Court brand since it is too well established in the motel sector that no amount of brand repositioning will convince Filipinos of its new image. Instead, the group should focus on the Hotel La Corona brand.
Decision Analysis
The Victoria Court Group has done quite well repositioning the Victoria Court brand into something more “clean” as oppose to the sleaziness that is prevalent in many if not all of the not all of the motels we have in Manila. The only thing left for them to do is to rebrand. Option B and C looks to be the best alternatives for the Victoria Court Group. Option B gives them a chance to finally differentiate themselves from the others by scrapping the brand that has long been associated with the motel industry. Option C on the other hand looks to be promising for the future of the group.
<![if !supportLists]>a.) <![endif]>Victoria Court Group should play its strength over the other brands in the motel industry by not only just repositioning, also by rebranding. The Victoria Court brand has long been the most famous motel brand in the country that merely repositioning the brand does little help to the group’s effort to change how people looks at them. It is now time to market Hotel La Corona and converting some, if not all, of the bigger Victoria Court brands to Hotel La Corona.
<![if !supportLists]>b.) <![endif]>The Victoria Court Group should start crafting a new business model for Hotel La Corona and the remaining Victoria Court brands. La Corona can be positioned as the premiere family get away place for Filipinos where family gatherings and relaxation are the main customer experience selling points. The Victoria Court brand on the hand can maintain its thematic drive in hotel approach but will no longer be the main focus of the group. Instead of focusing on overnight stays for the family, Victoria Court can focus on company and family events and its theme revolving around this concept.
<![if !supportLists]>c.) <![endif]>Marketing efforts of the group should shift now to building the Hotel la Corona brand and bringing it up to par with other hotels in the country.
Action Analysis
The Victoria Court Group has a lot of things to accomplish to ensure their future growth. Their current strategy is not sustainable for them because they are carrying the load of the whole motel industry. Although they have been somewhat successful in repositioning themselves and have convinced some Filipinos of their new business model, they are still very much considered part of the motel industry of the country. If they intend to finally shake of their image without the free loaders, they should revisit their whole business model. What are they? What do people look for in their hotels/motels now that they have changed image? What do they want to become? These are just some of the questions they need to answer before they can move forward.
The answer to their questions may lie with Hotel La Corona. This brand gives them a “hard-to-imitate” edge over their competitors since they can use it to promote what they have been trying to do with Victoria Court.
<![if !supportLists]>a.) <![endif]>Identify which Victoria Court motels are big enough and strong enough to be converted to a hotel. Careful study of each Victoria Court outlet is needed to ensure that there is enough customer and other grounds to convert existing location to Hotel La Corona.
<![if !supportLists]>b.) <![endif]>Further revamp the look of Hotel La Corona to reflect new business strategy. Suggestion is to make it “the perfect family getaway paradise”. Install big pools and slides to provide customers reasons to book rooms. Make it similar to the resorts found in Antipolo but Victoria Group is bringing it here in Manila.
<![if !supportLists]>c.) <![endif]>Consider a new business concept for Victoria Court brand. Thematic rooms have been a success with photo shoots and special event gatherings - perhaps they can reposition their whole business as such.
<![if !supportLists]>a. <![endif]>Consider targeting pre-nuptial picture events which is a big market nowadays considering the explosion of wedding photography (and photography in general).
<![if !supportLists]>b. <![endif]>Consider targeting too corporate events to which they can request for Victoria Court to set the theme for their gathering.
With these, Victoria Curt Group will eventually remove itself from the motel segment and enter a new phase in its history as it moves to the hotel segment. Victoria Court brand will still be maintained but due to its highly associated name with the motel industry, Victoria Court Group will then have to refocus its energy into building its Hotel La Corona brand whose name is still free and has not been sullied yet. A compelling idea and a strategy is no good as long as one does not have a compelling name – a lesson learned from Professor Jorge Saguinsin. Without the right name to go with a product, a great product and a great concept will be for naught. The Victoria Court brand is no longer a compelling nor is it a viable brand in itself to use as a hotel because it has too long been associated with the negative connotation that motels have in the country. If the Victoria Court Group really wants to change its image, perhaps they should try doing away with their brand and get out of the industry.
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