Table of Contents

Executive Summary...................................................................................................................1
1. Introduction....................................................................................................................2
2. Current Situation............................................................................................................2
2.1 Past Performance Assessment..................................................................................2
3. Problem and Issues ........
4. External Environment Analysis.......................................................................................3
4.1 PEST Analysis.........................................................................................................3
4.2 Industry Analysis.....................................................................................................5
4.3. Five Porters 6
4.3 Competitor Analysis.................................................................................................7
4.5 Strategic Group Analysis.........................................................................................8
4.6 Implication..............................................................................................................8
5. Internal Environment Analysis........................................................................................9
5.1 SWOT Analysis........................................................................................................9
5.3 Value Chain Analysis ....10
5.3 Activities of The Company 12
6. Objectives 13
7. Strategy 1 SAVED.........................................................................................................13
8. Strategy 2 SAVED........................................................................................................14
9. Selection of alternative..................................................................................................15
10. Implementation............................................................................................................16
11. Changes in Value Chain...............................................................................................16
12. Evaluation and control.................................................................................................17
13.Conclusion18
14. References

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Executive Summary
This report conducts an analysis for Banyan Tree based on the current information derived
from research. The purpose of this report is to recommend a reasonable and strategic
management strategy for the company to increase market share and revenue. The analysing
and recommending of various strategies will be based on Banyan Trees past performance,
internal and external environments using various strategies such as SAVED, Porters five,
SWOT analysis, TOWS and PEST.
Banyan Tree has resorts all over Asia. It targets the high-end consumer and offers luxurious
holiday. The company has a very resilient structure. Regardless of how the economy is, the
room rates stay firm, and there will be no retrenchment. By being socially responsible to the
environment and community, Banyan Tree believes that one of the main reasons it is still
sustainable in the tourism industry The Company invested a significant amount of figure in
Maldives Marine Laboratory to ensure the continual growth of corals for future tourism.
Banyan Tree also ensures that the locals are able to maintain their culture and heritage by
employing their craftsmen and using their handicrafts as ornaments.
However, Banyan Tree faced some challenges in building new resorts due to the limited
choices of suitable lands and a resort requires a large area. Other luxurious resort also started
following Banyan Tree by offering the combination of nature, spa and wellness. Therefore, it
is suggested that a joint venture with Guy Savoy, a famous 3 star Michelin chef, a brand new
idea which is believed would work well considering all factors.

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1. Introduction
Banyan Tree is a Singapore based listed company famous for luxury resorts and spa market
in Asia founded by Mr Ho Kwon Ping since 1994 and received over 300 tourism awards. It
currently has 25 resorts and hotels, 68 spas, 65 retail shops and 2 golf courses all over 23
countries. Banyan Tree is one of the first few resort that started with the concept of providing
individual villas with private pool, Jacuzzi and spa treatments to increase privacy and
exclusivity.
Banyan Tree mainly targets high-end consumers and charges a premium pricing based on
services. It has its own academy for staff training purposes to provide its desired high quality
spa and customer services to customers. There is minimum advertising for Banyan Tree as it
only work with agents that specialised in luxurious holiday industry. Banyan Tree has its
signature spa products, residences, spa, destination club memberships, museum shops, and
retail outlet.
2. Current Situation
Banyan Tree Hotels and Resorts became a leading player in the luxury resort and spa market
in Asia. Banyan Tree had launched new brands and a brand extension which includes resorts,
spas, residences, destination club memberships, retail outlets, and museum shops as part of
its expansion plans. Banyan Tree is targeting global ventures in places which include the
Americas, Caribbean, Europe and the Middle East while preserving its distinguishing Asian
identity and strong brand image of Banyan Tree (Wirtz 2012).
2.1 Past Performances
2012: Banyan Trees several businesses gained momentum in 2012, with an increase in an
overall growing of 3% revenue (Banyan Tree Holdings Limited 2012).
2011: Banyan Tree launched a three-pillar approach which focuses on increasing operational
efficiency, protecting biodiversity and developing local capacity to improve sustainability
(Banyan Tree Holdings Limited 2012).
2010: Banyan Tree is titled in being the overall winner for Large Hotel Chains in the 2011
Cond Nast Traveler World Savers Awards and also selected EarthCheck as a strategic
partner for benchmarking and to certify sustainable operations (Banyan Tree Holdings
Limited 2012).
2007: Banyan Tree integrated several efforts: Seedlings to bind core capabilities for social
benefits, Greening Communities to increase awareness for climate change, and natural
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resource conservation efforts that aim to inform internal reductions of energy, water and
waste (Banyan Tree Holdings Limited 2012).
2004: Banyan Trees Corporate Social Responsibility Committee officially recognized the
organization to direct socially responsible for fulfilling sustainability efforts across the group
by involving all senior management teams (Banyan Tree Holdings Limited 2012).
2003: Banyan Tree Maldives Marine to be launched in early 2004 to promote marine
conservation as the pioneer in resort-based research and educational facility in Maldives
(Banyan Tree Holdings Limited 2012).
2001: The Green Imperative Fund (GIF) a fund-raising mechanism was implemented which
work is the contribution of the guests and hotel matching contribution combined to embrace
the environment (Banyan Tree Holdings Limited 2012).
3. Problem and Issues
The first challenge met was sourcing the ideal location that would provide the exotic
feeling, Banyan Tree is looking out for to align with the brand value and image of the
organisation. An example would be a dispute with Banyan Tree Big Chinese Developers.
It was posed a problem when Big Chinese developers such as China Vanke and
Evergrande Real estate Group started building in areas Banyan Tree set its eye on (Fang
2011). Thus, Banyan Tree could have been at disadvantage in this exotic sites scarcity
competition as Banyan Tree has a political disadvantage in China.
The second challenge was the intense competition in the luxurious resort market. There are
many luxurious resort offering similar concept of combining Nature with Spa and wellness.
With the many resorts operators coming into Maldives, customers would be open to more
options and the exclusiveness to the beaches that Banyan Tree provided might not be as
attractive as before and this could result in losing revenue.
4. External Environment Analysis
4.1 External: PEST Analysis
Political
Maldives is a presidential republic state with up to 1200 islands. The President as head of
state and government. The President selects the cabinet and leads the executive branch where
agreed by parliament. In 1998, with the present of a new constitution, it was not provided for
independent judiciary which means that the president t has the right to go through High Court
decisions and has the authority to choose and release judge by the Peoples Majlis (Maldivian
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Government). In the current year, politics has become a rough turn because there have many
new political parties have emerged. However, right now the Island is stayed at Bay of peace.
Economic
The economy of Maldives are mostly dependent on its tourism and fisheries sector. It
actually creates the Maldives from vulnerable to external shocks. Maldives has a shortage of
mineral resources and natural land support and most of the production based on import and
dependent heavily on earning of foreign exchange. Agricultural production contributed lesser
to the economy due to limited cultivatable land. Through the expansion of tourism and fishes
industries in the country, there have reached the fast growth over recent two decades.
According to the statistics, in between 2013, arrivals of tourists are around 293,112. The
tourism economy generates about 28% of Maldivess Gross Domestic Product (GDP).
Social
In Maldives, Islam is the only national religion, all other open practice of religions are
prohibited. The major industry in Maldives is tourism, which is the reason why services play
a significant role in hospitality industry. Some constraints includes having limited skilled
human resource and rapid growth population. Drug abuse and social disharmony are the
negative impacts due to highly congested living conditions. Dhivehi is its first spoken
language and English is the second. Local people are however socially well connected even
though there is a shortage of social services and people spread across each other by long
distances. Poor education and limited job availability increases the unemployment rate.
Maldives faces the shortage of labor that leads the employer to provide competitive working
conditions and pays to attract employees.
Technological
The Government will be investing in Research& Development for companies that are able to
generate GDP. In recent year, infrastructures such as telephone services has been improved.
Each island in Maldives now has its own public phone to stay connected and mobile-cellular
networks via International Submarine Cable Fiber Optic Link around the Globe (FLAG). All
resort in Maldives has their own infrastructure, water supply, rubbish disposal arrangements
and power (Hall and Page 2000).

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4.2 External: Industry Analysis

Key Success Factors
Success

Description

BTH Success Determinants

Factors
Established

Generated higher credibility and

A leading player in spa and resort in

Brand

builds customer loyalty

Asia
Top 50 in most-sought brand search in

luxury resort
Won more than 400 awards
Good word-of-mouth
Recognizes the importance and impacts

of resource conservation
Green Imperative Fund

Corporate

Portray a positive brand image

Social

of the company

Responsibilit
y (CSR)

(GIF)mechanism to support worthy

Good Service

Offers exclusive experiences

environmental actions and CSR

Designed to offer exclusivity and

Quality/

while offering its utmost

utmost privacy
To fit the concept of sense of place,

Unique

ability in providing a high

Selling

service quality to reach

resorts are all designed to create a sense

customer satisfaction
Exclusive services provided

of exotic sensuality and provide the

are hard to imitate

its infrastructure, landscape and service

promised privacy by reflecting through

offers
Service delivery are often customized
based on customers preferred travel
experience e.g. a romantic getaway ,

Strong

Staffs are trained to the

Management

standards of five-star service

Team

establishments
Staffs get to enjoy a stay in

relaxation trip or a wedding proposal

Well-trained staffs
Passionate work team

its own resort to get further

understanding in meeting the

expectations of customers
Offers generous staff

welfare policies
To ensure high efficiency
and productivity
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4.3 Five Porters

Threats of New Entrants: Low
There are relatively low threat of new entrants due to extreme high capital required to
support business operations. An investment of at least $200 million will be required for first
resort, Laguna Phuket. This makes it difficult for new entrants to enter and non-performing
firms unable to exit easily without suffering great losses.
Threats of Substitute Product: Medium
Banyan Tree still owns its distinctive position in the luxury resorts industry. Consumers
might be able to find a substitute that is able to provide similar distinguished services easily.
Unless in cases where consumers focuses more on budget holidays with affordable pricing to
a large extent. In this case, Banyan Tree may not be the priority choice.
Competitive Rivalry: High
The competitiveness in tourism industry is getting more intense. For example in Thailand, Le
Meridien Phuket Yacht Club offers as low as $150 per night providing same facilities and
services like Aman Resorts. Other major competitors includes Four Season and Ritz Carlton.
Bargaining power of suppliers: Low
The luxury hotels and resorts business was distributed to the countries in the Asia-pacific
area. The operation will depend on the local resources to support including power, water,
food and beverage and even labour. Banyan Tree has been making an effort to ensure
sustainable development by purchasing from local suppliers to meet daily operation needs
and maintain the relationship with the suppliers. However, as most of the countries are
relatively lower cost, it will be easier for Banyan Tree to substitute suppliers.

Bargaining power of customers: Medium

Banyan Tree is a leading luxury service branding. Target market ranges from 30 to 40 years
old rich couples. Banyan Tree has a very clear market positioning and brand identity which is
well known for Sanctuary for the Senses- the blend of romance and travel with green
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conscience. Strong guest service philosophy behind the rooms, restaurants, spas, villas,
retails, and the entire resort experience completely rejuvenates the body, mind and soul. Keep
devoting to corporate social responsible for sustainable tourism boost the brand building with
a highly positive perspective. Banyan Tree well targeted its market segment, customer chose
for the brand identity. Banyan tree should have high bargaining power towards the customers.
But the only risk is luxury hotel and resorts business is also expanding. Other companies may
also create strong branding with strong service orientation and unique experience.
4.4 External: Competitors Analysis
Direct Competitors
Competitors
Four Seasons

Shangri- La Asia

Strengths
- Strong Brand Equity
- Innovative
- Strong Management Team
- Market Share Leadership
- Asias Leading Leader in Luxury

Ltd
-

Hotel
Multi-award for its finest ownership

and management
High efficiency crisis management

Weakness
- Weak Communication
- Diseconomies to
scale-

Brand awareness is

restricted only in Asia

Limited focus on
business travelers

team

4.5 External: Strategic Group Analysis

Brand Awareness

High

Four Seasons

Shangri-La
Banyan
Tree

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Low
Narrow

Segment Served

Wide

Figure 1: Self- Reference

4.6 Implications
Banyan Tree is currently lagging behind its competitors. According to research, the most
sought-after brands are Four Seasons to Shangri-La to Banyan Tree. They are each ranked 4 th,
7th and 28th respectively. The competition is intense and hence Banyan Tree will focus on
providing and improving its service quality and provide value-added services in the future.
Banyan Tree has a much stronger CSR as compared to its competitors and hence this
enhances its brand value. Even though Banyan Tree is ranked below its competitors, it is able
to differentiate itself by providing customised service offerings, as the majority of the
travelers focus more on seeking experiences; service plays a crucial part in leaving a positive
or negative impression. Banyan Tree keeps its marketing campaign to the minimal and brand
awareness largely comes from third parties. Hence, good media coverage and word of mouth
generates high credibility to the organization. The organisation has a group of passionate
team which fits the quote When employees are happy, customers are happy in the service
sector. This ensures the productivity and efficiency of the team and strengthens the stability
of the organization.

Internal Environment Analysis

5.1 Internal: SWOT Analysis

Strengths
Banyan Tree is a leading player in luxury spa and resort in Asia Pacific and has an
established brand image. It maintains the quality of service in all of its resorts by providing
stringent training to the staffs. Staffs are trained to the standards of five-star service
establishments. Banyan Tree has won more than 400 tourism awards and successfully created
a very good reputation in providing excellent services, being environmental-friendly and a
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resort that is rich in the locals culture. Banyan Tree keeps the culture of the locals by
engaging local craftsmen. Local handicrafts are displayed in the villa as ornaments and in the
shops for sale; this allow the tourist to know more about the culture (Wirtz 2012). Consumers
are attracted to consistent theme of natural sanctuary as majority of its high-end consumers
lead a stressful and urbanized lifestyle.
Banyan Tree is very dedicated to preserve the environment. Resorts are built using local
material and minimum wastage. Trees that were removed were reused to make furniture.
Villas are built on stilts to prevent soil erosion and even the toiletries provided are
biodegradable (Wirtz 2012). Banyan Tree have a fully equipped research facility in Maldives
to protect and regenerate corals and marine life for education, awareness and future tourism.
Consumers nowadays are more educated, and awareness of eco-friendly products has
increased. Studies have shown that consumers are willing to pay more for eco-friendly
products (Somerville 2013). With these factors, Banyan Tree won over 300 tourism awards
for its creativity and being responsible socially and environmentally.
Banyan Tree also has a strong and passionate management team because organisation ensures
that the welfares of its employees very well taken care of. Transport, dormitories, food,
childcare facilities, medical services and canteen services are part of its welfare. This allows
employees to have a sense of ownership and creates a friendly and helpful environment via
bonding time such as meal gatherings and travelling in the same transport. The resort values
its employees as much as its customers. Despite numerous disastrous events that happened on
September 11 attacks in 2001, SARS in 2003 and Tsunami attack in 2004; no employee was
retrenched. These made the employees more attached to the organisation.

Weaknesses
The resort continues its expansion in other countries, and this may cause an overwhelming
additional stress to the management level and also a shortage of manpower. The additional
stress in the management level may lead to a decrease in work efficiency when the expansion
happens too fast. In order to prevent this from happening, the company should plan ahead of
time before expanding to ensure sufficient and well-trained employees.

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Communication barrier is a big problem as most employees, from the third-world Asian
countries, are not well educated in English. Thus, it is not easy to train them. However, this
issue can be easily overcome by employing a translator.
Opportunities
Banyan Tree has can choose to expand in the western countries and having reputable name is
an advantage. Many of its current consumers are from the western countries. Banyan Tree
has the intention to expand aggressively in America and European countries. Currently,
Banyan Tree has 2 resorts in Mexico. It intends to expand in Europe as well as there is a
market demand. With its own spa academy, spa products, residences, destination club
memberships, museum shops, and retail outlets, Banyan Tree may want to consider a joint
venture with a local restaurant or chef to complete the whole package as a resort.
Threats
The demand for resort market has increased hence there are many resort with similar
offerings as Banyan Tree. It is important for Banyan Tree to constantly come up with creative
ideas to distinguish itself from other resorts. In Thailand there are a few resorts, such as
Eastiny Resort and Pimalai Resort, offering similar services at a much lower rate as
compared to Banyan Tree. Therefore the resort faced the challenge of translating and
maintaining the success of a niche Asian hospitality brand into various market segments on a
global scale (Wirtz 2011).
5.2 Internal: Value Chain Analysis
Market Demand
According to research, the world is separated into various sectors. Demographically, 97%
belongs to the population of the average, the normal as well as the rich. The remaining 3%
belongs to the population of the prestige and the wealthiest (Norman 2004). This 3% sector
decides to live their life with a definition rather than have life define them. They are
motivated towards dreams and passion.
It is the 3% that Banyan Tree wants to focus on. The wealthier people prefers living in a
quieter place, remotely away from the urban city, more towards rural and country sides. This
unique group of customers has found that they would want to have the uniqueness,
exclusiveness, rarity and scarcity. The willingness of their high spending depends on the
luxurious feel that the surrounding has to provide. In a nutshell, the wealthy people are

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willing to pay for the provision of high service standards, the best service culture and the
place that can maximize these attributes.
Till date, being environmental friendly is becoming one of the main concern. The number of
eco-friendly organizations are increasing. Banyan Tree has been putting on its best effort to
uniquely combine the needs of the high end customers, the need of environment and
profitable in the market (Costa 2012).
Resources and Capabilities
Banyan Tree has is a strong branding and has always been associated in being rich in culture
and heritage, excellent spa and wellness services, interior structures and designs that provides
an exquisite feel. To maintain its strong branding and value, the primary support in its value
chain is the most important factor. For an organization to excel in providing service several
challenges will be faced in which includes capitalizing at converting intangible things such as
feelings, perspective and senses into economic value.
Banyan Tree has the capability of maximizing their human resource mainly through staff
trainings. For instance, all employees are trained to be a practitioner of corporate social
responsibility, to understand the needs of customers and constantly be eco-friendly in all
ways of working (Horrigan 2010). Banyan Tree also work with the the natives by providing a
place for them to sell local souvenirs. This helps to promote the campaign of environmental
friendliness, provide an income for the natives and understand and preserve the heritage of
the country. With these factors, Banyan Tree uphold to their Eco philosophy (Hooi 2011).
Banyan Tree has strong financial capability and under the lead of a group of influential and
charismatic leaders; the ability to influence ideas upon architectural and interior design of the
place, in consideration in providing relaxation to the customers. Banyan Tree actively keeps
up with the latest technology and integrates them to its room systems. An example would be
using advance software for security purposes.

5.3 Activities of the Company

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Figure 2 : Self Reference: Banyan Tree Corporate Value Chain

Aside from the usual hotel and resort management and the architecture business that Banyan
Tree is providing, it is considering the Residential housings of China as part of its expansion
plan. Banyan Tree has successfully launched the Laguna shores back in Thailand, Phuket
Residential apartment projects, hence quite experienced. Its main aim was to attract affluent
young Asian couples. Banyan Tree is staging themselves out of the competition of the local
housing market in major cities currently. They are targeting a share of that market by
providing it in Sichuan Province, where more and more wealthy people are gathered, as it is
up and coming urban hub in china. Their first project is to combine luxury and affordability
and come out with a brand new eco-friendly conceptualize new home as an option for the
wealthy people in china to consider. Taking on this opportunity would be another milestone
for Banyan Tree to further improve their brand image and bring their architecture skills and
design to a whole new level (Chong 2013).

Competitive advantage
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Banyan Tree has the ability to create a unique style of designing and branding. Hotels that are
located in different countries and different locations are the blending of the local cultural
elements of that place with the organizations cultural spirit to come out with the feeling of
romance, calmness, luxurious like a natural habitat.
6. Objectives
1. To increase profitability
2. To achieve luxurious branding
7. S.A.V.E.D 1: Centralise Purchasing
Staging
A centralise purchase strategy will be considered a follower strategy as some of the resorts
and hotels are already utilising centralise purchasing strategy to achieve cost efficiency.
Arena (Growth Stage)
Banyan Tree can purchase extremely high quality mattress and bed sheets to ensure every
guest to enjoy high quality sleep. Purchase bedding materials in bulk by forecasting the
frequency of change. This helps to achieve economy of scale.
Vehicles
A corporate purchaser staff will be recruited. This strategy is considered organic growth. The
staff will be in-charge of sourcing for the best product which complies with Banyan Trees
objective; which is to maximise sleep quality for the guest, and in maintaining Banyan Trees
leading luxurious resort position.
Economic Logic
Centralised purchasing is an organisational strategy to achieve cost efficiency. Being able to
source out the best fine quality mattress and bed clothing, there will be a cost saving of 6-8%
for purchasing department.

Differentiation

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By adopting this strategy, BTH is able to produce a competitive edge against its competitors
in the sleep quality department. A research by Horwath HTL shown that accommodation
plays a very important role in the expectation of guest; thus the choice of providing high
quality bedding material was conceived.
8. S.A.V.E.D 2: Joint Venture with Guy Savoy Restaurant
Staging
The strategic plan to joint venture (JV) with three-star Michelin Restaurant will be the first
mover in the high-end luxury resorts. There are some Mega resorts that work with Celebrity
Chefs such as Resorts World Singapore, Caesars in Las Vegas. However, high-end luxury
resorts and mega resorts targeting different market segment and it will be still considering as
first mover in the luxury resorts chains. Celebrity chef restaurant will provide wholly
uniquely dining in experience and create romance-intimacy ambience for the guests
especially the couples.
Arena
Celebrity chef restaurant will provide a wholly uniquely dining experience and create
romance-intimacy ambience for the guests. By engaging in a JV, Banyan Tree is able to tap
on the fame of the restaurant and expand their business. It continues to target at the niche
market that comprises of wealthy families, rich couples who at their age of 30-40 years old.
This strategic plan designed to enhancing the intangible branding through a new visual and
dining in experience.
Vehicles
Joint venture defined as both parties agreement to develop and grow in a finite time.
In this growth stage, it will be considered as external growth.
Economic Logic
Guy Savoy is a world-recognised French restaurant which owns three Michelin stars in Paris
and two Michelin stars Las Vegas. It has been ranked top 50 restaurants in the world. By
Joint venture with such high recognition Celebrity Chef, BTH target to achieve sales increase
by offering premier pricing with superior products offered. The average spending in the
restaurant will be 60%-80% higher than ordinary fine dining in. The agreement between the
parties is basically profit sharing 50% each but however Guy Savoy will be providing kitchen

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staff and waiter training and the same time, Guy Savoy will assist to get in food supply from
the locals.
Differentiation
By adopting the JV strategy, Banyan Tree is able to differentiate its business; providing a
wholesome luxurious resort experience which includes top-notch gastronomy experience.
The unique dining in experience provided as this will be the first time that Guy Savour JV
with high class resorts and hotel like Banyan Tree. It allow the guests to have a fully
enjoyable relaxation through "a sense of place. Guy Savoys signature dish and wine will be
a competitive advantage but however, customized menu will be the new differentiator
compared to the others. The chef could make the customized dish within the guests view. A
true visual, taste and smell fantastic journey in Banyan Tree.
9. Selection of Alternative
By comparing the two strategies pros and cons, the strategy that yields the more pros is the
one that is selected. In this case, the joint venture (JV) with a three-stars Michelin restaurant
have more to offer which will result in a win-win situation as compared to bulk purchasing of
high-end mattresses.
Firstly, Banyan Tree Holdings (BTH) will be able to benefit from the fame of Guy Savoy,
given that three-stars Michelin have much exposure in the restaurant industry. BTH can tap
on those exposures to reinforce their marketing strategy and bring in more business.
Likewise, Guy Savoy can enjoy the benefit of working with a luxury resort such as achieve
exposure to the international guest of Maldives, Banyan Tree.
Secondly, the fact that BTH offer Guy Savoy a cost worry-free environment allows the chef
can focus on bringing the best dish to its patrons without having to worry about the cost of
overhead, utilises, rental and labour. This is important for a restaurant as indicated by
Surlemont and others as they discuss the profitability of a Michelin star restaurant
(Surlemont et al. 2005).
Lastly, the JV offers a differentiation factor when compared against its competitors and
allows them to maintain the top choice for consumers in the many Maldives holiday resorts.
Currently the researchers of this paper are unable to find any examples of resorts working
together with a three-star Michelin restaurant. However it is not uncommon for a resort to
collaborate with a restaurant, because it was reported that such JV happened before (Frumkin
2000).
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10. Implementation
BTH has selected Vabbinfaru resort in Maldives to kick-start the joint-venture with Guy
Savoy in year 2014. This particular resort was selected due to its prime location in Maldives,
and it will be available for receiving dining guests from Banyan Tree Madivaru, Angsana
Ihuru and Velavaru. The staff training will be handled by Guy Savoy. The restaurant will be
open for lunch and dinner. The chefs are expected to greet the diner and find out personal
preference of how they like their meal to be cooked.
11. Changes in Value Chain
Infrastructural
BTH will convert one of their existing restaurants in Vabbinfaru into the posh designer
restaurant worthy to be called a Guy Savoy 3-star Michelin restaurant. The estimate of
US$600,000 will be invested in the renovation, furniture, chinaware and silverware.
Operation
BTH will be increasing its fleets of speed boats to ferry the guest to-and-fro from Madivaru,
Ihuru and Velavaru. By doing so, the average waiting time for the ferry service can be
reduced from 2 hours to 1 hour. Each of the speed boats is estimated to cost US$150,000.
BTH estimates it will require increasing the speed boat by 1 each year.
Marketing and Sales
The joint venture with Guy Savoy will be the first of its kind; thus the marketing department
must fully utilise this opportunity and direct the marketing budget to maximise the promotion
and advertisement.
It is forecasted from the current average occupancy rate of 63% and the projection of 10%
annual increase for Finance Year 2014 to 2016, BTH should be expected to achieve 72%
average occupancy rate for their resorts in Maldives.
With the main courses priced at US$120, BTH expects to receive different percentage of
dining guest from the respective resorts. Most of the guests who are already staying in
Vabbinfaru are highly likely to dine in Guy Savoy; however, lower expectation of the guest
from Madivaru is due to the requirement of ferry transportation to get to the restaurant.
Likewise, lower anticipation of guest travelling to Vabbinfaru from Ihuru and Velavaru, also
due to the higher pricing of the restaurant. Nonetheless as the economy recovers and success
stories of the restaurants spreads; annual growth of 10% is expected.
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Banyan Tree and Angsana Resort in Maldives

Total Villas
Vabbinfaru, BT
48
Madivaru, BT
8
Ihuru, AS
45
Velavaru, AS
113
Total
214
Figure 3: Self-Reference

34
3
10
23
70

Forecast Pair of Dining Guest per day

FY14
FY15
FY16
70.8%
37
77.1%
40
83.3%
37.5%
4
50.0%
5
62.5%
22.2%
12
26.7%
14
31.1%
20.4%
25
22.1%
28
24.8%
32.7%
78
36.4%
87
40.7%

With the forecast, the newly fitted restaurant will be able to host 100 seats. Premium wines
will be made available to pair with the main course from price ranging from US$300 to
US$12,000. As such the staffs are to undergo through training in the knowledge of wine, to
be able to make a professional recommendation to the guest. The average spending per table
is estimated to achieve US$400 for lunch and US$800 for dinner.
12. Evaluation and Control
There will be two methods to evaluate the success of the restaurant. Both the numbers of
diners and the average spending per table will be closely monitored. If the actual number of
diner falls below the forecast by more than 20%, discounts and promotional offers will be
introduced to increase the figures.
Staff will undergo regular training in their product knowledge to achieve the average table
spending. The training will allow the waiters to up-sell the desserts and drinks, especially
high ticket items such as red wines.
The chefs are expected to personally acquire diners feedback on the food and the ambience.
The restaurant management is trained to act on feedback of the ambience and immediately
solve those problems.
Banyan Tree should adopt the balance scorecard approach as it will help ensure the elements
of the strategy are taken into consideration.

Approach
Financial

Strategic Objectives
To increase profit margin

Strategic Control
Monitor the number of diner
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Customers

Growth

Monitor the average spending per

To provide wholesome luxurious

table
Gather customer feedback

resort stay experience

Exceed customer expectation

To provide personal touch in the

Monitor current trends

dining department
To promote external growth

Seek synergy with JV

To create brand value in the

Staff training and rewarding

industry
Figure 4: Self-Reference
13. Conclusion
The report has analysed the external and internal environment and decided on the joint
venture with Guy Savoy restaurant to achieve growth and its objectives. With this strategy in
place, Banyan Tree will be able to stand out among its many competitors with its
differentiators. The strategy should be reviewed annually to ensure Banyan Tree viable and
sustainable.

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