Lade Inhalt...

St. Christopher's Village. Business plan for development of new product

Studienarbeit 2018 14 Seiten

Gesundheit - Pflegewissenschaft - Pflegemanagement


Table of contents

Chapter 1. Introduction

Chapter 2. The development plan

Chapter 3. Feasibility of the new product/service

Chapter 4. The sustainability of the new product/service

Chapter 5. Factors that limit the development of the product/service within the hospitality industry

Chapter 6. Conclusions


Executive summary

The hostel industry consists of a variety of businesses that fulfill the needs of guests. Of course, one of the core components of the hostel industry is the accommodation, including bed and breakfast being accompanied by several additional services that in turn enhance the customer experience. Hence, the present business plan refers to the viability and sustainability, as well as to the limitations posed by the macro environment to the new product, named St Christopher's Village ON. As such its feasibility and sustainability must be taken into account, together with the factors that restrain its future development.

Chapter 1. Introduction

In general the hostel market in Britain has been perceived as valuable and thriving market (Keeley, 2001); however, new products acting in cooperation with the existing one need to be introduced to that valuable market. Specifically, within the hostel accommodations little diversity of the services exists; most of them offer selling single beds from 4 to 18 in mixed dormitories, female dormitory and twin rooms with private bathroom (Hostelworld, 2018). It is considered that the hostel is primary a cheap accommodation, designed to guarantee social experience to its visitors (Hostelworld, 2018).

Nowadays, the hostels have become budget-friendly type of accommodation, being centered on the shared social experience of its guests. According to the definition of Hostelworld (2018) hostel’s purpose is to be a social-hub, allowing their visitors to have fun with other travelers. Recently, hostels are becoming luxurious places with fashionable design, attracting in this way more and more travelers (HVS, 2013). Actually, the term “hostel” now signifies the concept of a hybrid between hotel and hostel.

Despite the fact that the shared dormitories are still present in these places, the whole concept of hostels has been changed and now there is a presence of private bedrooms and even art galleries in some of the hostels (Hospitalitydesign, 2013). Furthermore, there exist various synthesis being influenced by what the client budget is; some of the hostels around the world have been transformed from castles and villas (TravTalk, 2014). Additionally, the hostels belonging to the Swiss Youth Hostels provide ski packages for the guests of certain hostels, situated at ski destinations and can help them with ski passes during the winter season (TravTalk, 2014).

In 2018, St Christopher's Village is still similar type of low-budget accommodation (St.Christopher’s Village, 2018). Except the fact that their premises are on central London locations, the hostel chain needs some additional service, so as to augment the effect of its friendly atmosphere and to outstand from its competitors. In brief, outlining the characteristics of the hostels ‘new product and its viability are basic aims of this report; also, it will focus on the background of the hostel industry and its strong and weak sides via the methods of the SWOT analysis. Consequently, the viability of the new product St Christopher's Village ON will be evaluated and PEST analysis of the factors hindering its progress will be produced.

Chapter 2. The development plan

Hostels and hosteling in general have arisen as a large-phenomenon during the 30’s of the previous century (Hostelworld, 2018). It is remarkable that up to 1932, in country like Germany there existed more than 2000 youth hostels. At the same time, the similar places for accommodation were flourishing in the European countries such as Norway, Netherlands, Ireland, France and many more.

Recently, the escalation in the adjustability of the work patterns and the lifestyle changes have also given priority to this growth (Chesshyre, 2003). Regarding the industry, the perfect room in it was identified as a quad (that is alterations of twin bed and a bunk bed), due to the fact that its adaptability allows the hostel to respond to seasonality and guests’ needs (HVS, 2013). As such the rooms have basic amenities, but in order to be up-to-date with modern trends hostels need to adopt innovative services (HVS, 2013).

As any other industry, the hostel industry is strongly competitive one, striving to providing the customers with utmost quality and at the same time being threatened by relative high barriers to entry and a bulk of substitute products, offered at a lower price. The latter could be better described via Porter’s five forces, below.

Porter’s 5 forces

1. Barriers to entry in the industry of hostels

High or low-entry barriers in the hostels ‘industry hugely depend on the individual circumstances of any of the initiatives; for example, certain buildings could be rented not newly build and then transformed into hostel accommodations. Also, via the means of Internet and the easy to use communication channels the start-up expenses of establishing a site for hostel are significantly diminished. However, one of the most serious barriers standing in front of the new industry entrants is the differentiation of the already existing customers (Porter, 1996). Indeed, a hostel offering a shared social-experience, mixed dormitories and even twin rooms with private bathrooms possesses great chances to capture and retain customers; however, it should offer a memorable product or service in order to be preference number one in its guests’ list.

2. Threat of substitute products

Hostels especially in the busy market of Britain might be present in any price range, despite the modifications in prices and amenities. As stated in the previous section, the consistent challenge is to remain ahead of the competitors (Porter, 1996). Nevertheless that fact, the trendy technologies in any industry often bring about the usage of substitute products of lower price. In turn that could destroy the already created customer base of the hostel.

3. Bargaining power of buyers

People choosing to stay in shared accommodations are price-sensitive in most of the cases using online apps so as to be able to identify the hostel with the best amenities and service, offering the lowest price. In brief, the bargaining power of buyers within the case of hostels eliminated the role of intermediaries such as travel agencies and made the entry in the industry cheaper.

4. Bargaining power of the suppliers

Within the hostels the basic suppliers are the employees working there. However, important for any hostel is to recruit the right candidate for the position, namely the one that will provide their clientele with exceptional service. Nevertheless, bargaining power of suppliers is not a significant threat in the industry, as there are many highly-qualified employees on the British market. Of course, certain basic requirements need to be fulfilled such as at least graduation from hospitality school at least and proficiency level in English language, being proven by relevant certificate.

5. Rivalry among competitors already on the market

Not surprisingly, the competition in hostel industry is high; namely, it has been deepened by the Internet. Nowadays, consumers receive the latest offers on their mobile and easily can choose the most suitable alternative to regard to the ratio price-quality. Also, the industry is developed in many towns and that in turn increases the number of potential competitors.

In summary, each hostel is in need of recognizing its strong and weak sides and aligning them with its prospective marketing strategy. Differentiation and viable products does make a difference, however having direct contact with potential customers is what matters.

SWOT analysis of the hostel industry in Britain


- Hostel products keep the ratio between price and quality, received by their customers.
- Hostels in Britain exhibit strong marketing skills via web sites, online platforms and digital apps (PWC, 2018);
- Diversity of nationalities being employed in the hostel industry in Britain. The latter shows that communication with potential customers is not a problem.
- Hostels in the country hold various certificates, such as Trip Advisor’s Certificate of Excellence (TripAdvisor, 2018).


- Shared accommodation in the hostels presume less privacy; this could be a problem for older people, or for couples looking for privacy.
- Renovation for certain types of hostel rooms is necessary.
- Hostels are limiting their potential market by not investing enough in their online presence (PWC, 2018).


- Growth in the hostels ‘target market by enlarging it with new customers;
- Differentiation of product from the already existing in the industry;
- Products and services are continuously upgraded;


- Certain government regulations might endanger the functioning of hostels;
- Increase in local taxes;
- Increase in the obligatory minimum pay provided to employees (Gov.UK, 2018);



ISBN (eBook)
ISBN (Buch)
Institution / Hochschule
Anglia Ruskin University
St Christopher's Village London Tower Bridge PEST SWOT competitiveness customer experiences hostel industry balance sheet income statement sustainability



Titel: St. Christopher's Village. Business plan for development of new product