PRODUCT REFURBISHMENT AS A MARKETING TOOL IN THE HOTEL INDUSTRY

Abstract

Refurbishment is currently the subject of concern for many hotels in Singapore. Whether to keep abreast of competition or as part of a continuously upgrading programme, hotels are ploughing through their refurbishment plans in earnest. This study attempts to examine the factors affecting the refurbishment of hotels and their probable link with occupancy levels and room rates. Case studies have been conducted on five hotels to test the hypothesis which postulates that a positive correlation exists between the refurbishment and the economic success of hotels in Singapore. The findings revealed that hotel refurbishment results in an increase in average room rates as well as average occupancy levels. However, there is no direct impact between the hotel's refurbishment cost and its occupancy levels or room rates. This is attributed to factors such as the prestige of the hotel, business climate, state of economy and marketing strategies. In the final analysis, product refurbishment is only one component of the overall ingredients for achieving success in the hotel industry.