Macro-environment

Demographic environment

According to Eurostat's data, the population of the EU-27 is growing and is expected to continually grow in future decades. The age structure of population in the EU-27 is becoming older, the age pyramid is narrowing at the bottom while the ageing population grows. This implies that in the future we should be more focus on mature services and adapt our services to a wider range of consumers since our target market is mainly young people. The average age at marriage is increasing noticeably across the EU in recent years. This can be interpreted that people are more likely to travel in less conventional types of accommodation, conducive for meetings and sharing of experiences.

Economic environment

After the financial and economic crisis, the GDP growth is expected to reach 1,5 % for 2014. The inflation rate is forecast to slightly decrease in 2014 compared to 2013. The household saving rate increased sharply in respond by the crisis and reached 13,2 % in 2009 while it began to decrease in 2010, to reach 10,7% in the end of 2013. The unemployment rate is foreseen to remain stable for 2014. Furthermore, it is interesting to point out that despite the slowdown Europeans keep going on holidays even if they spend less.
The slightly increase of the GDP and decrease of inflation rate can be seen as a better economic situation in the EU 27, as a general increase of the wealth of many Europeans and a higher purchasing power. Moreover, the decreasing household saving might be interpreted as an increase in consumption. This is likely going to increase the demand for the hostel industry. As the unemployment rate remains stable, workforce remains unaltered and then likely does not offset the positive effect of the others factors analysed above.

Technological Environment

Nowadays, technology is developing fast in the communication sector, everything is done by modern technology. The Internet has changed the usual way consumers booking as the travel agencies are less attractive and less convenient. Therefore, direct internet marketing seems to be an important strategy to survive in the market competition.
Natural Environment

The hospitality industry is well known as energy-intensive industry. The global warming and depletion of fossil energy associated with an increase cost of energy are major issues. Since alternative sources of energy are already developed, focusing on renewable energy seems to be relevant in the current situation. Political environment

According to the order of French-speaking community, no-one can run any kind of hotel without satisfying the security standard (particularly in term of fire). As a consequence, our hostel will pay attention to fulfil all the norms. In Belgium, the hoteliers have to pay the copyrights of any music diffusion. Also concerning the legislation features, we will have to put up in every room the number of the room, the price by night and per person (VAT and services included). We, as hoteliers, are obliged to hold a book with the identity of the client, his arrival and departure dates.

Cultural environment

According to a study published by the European Commission, 40% of the respondent (Europeans) went in 2012 on holidays for enjoying the sun on the beach. It is a pity that there are no beaches in Brussels! However, 36% of them travelled for visiting family or friends. This last category could be a potential customer base. Also, culture, appeared in the study to be an important purpose (22%) for travelling. Having a hostel in Brussels, it is this class of travellers we have to attract! We have to take advantage from the historical and cultural position of Brussels to sell our services. Europeans seem to appreciate city-trips and Brussels which is surrounded by many countries benefits from a central position could have a very high potential to attract this kind of travellers. Another comforting fact is that 43% of the respondents travelled inside the EU27 against 26% of the respondents who travelled outside EU27. The major part of this kind of travellers are more likely to be young people (15-24) and still studying.

Microenvironment

Suppliers

* Energy
In order to have an efficient energy management of our green youth hostel, we rely only on 100% renewable energy. Our technical equipments and installations are supplied in different renewable energy forms. Solar thermal panels, combined with solar water heater for more efficiency, are used to provide warm water for sanitary facilities and central heating installation. Photovoltaic panels provide electricity for electric installations such as lighting equipment and household appliances. 123 Solar is our one time supplier. * Interior design, bedding equipment and furnishings
Bedding equipment and decoration come mainly from IKEA. Actually, we can find eco-friendly product such as led lamp, cotton sheets and mattress.

* Appliances
All kitchen appliances needed are provided by Matoreca which is specialized in professional “HoReCa services”. Materials such as cookware, food display, disposable equipment, beverage service and refectory’s furniture. Matoreca also provides us cleaning equipment and cleaning chemicals. BtoBgreen offers a wide range of hygiene product. Diamond is another supplier for professional appliances such as washing machines, dishwasher, refrigerator and oven. Moreover, to help run our business some service companies like “Lavoir Lachappelle”, a laundry service is necessary.

* Breakfast Bar and Drinks
We propose our customers a basic organic breakfast and some snacks and drinks are available after breakfast’s hours. Our basic breakfast consists of organic bread, butter, jam, chocolate, eggs, seasonal fruits and coffee and tea issuing from fair trade. Seqoia, Makro and Btobgreen are our main suppliers for organic foods and fair trade goods. We also rely on local producers on the periphery of Brussels.

* Office supplies and computer equipment
BtoBgreen offers a wide range of office supplies and distinguished itself by their respect for the environment. Our supplier for computer equipment is MediaMarket.

Marketing intermediaries

In order to avoid intermediaries’ dependency, we have created our own reservation website. Moreover, we have an exclusive partnership with Neckermann to which we propose different formulas. Our hostel is in their advertising brochures and website in return of a certain percentage of sales, which also guarantee for us a portion of rooms to be sold. To be a member of the Hostelling International Association, a travel guidebooks for backpackers, can be seen as an added value since we are known internationally.

Competition analysis

In the hospitality industry, there are lower barriers to entry, especially since the soaring of the Internet which allows reducing marketing cost moderately or evening access more easily to potential suppliers or resources. Moreover, the Internet make possible to diminish the differences between competitors to consumers. Indeed, they can find more information about one specific hostel and compare the different price charged. Therefore, the direct and indirect competition is fierce and we have to differentiate ourselves by a high quality service, amenities and affordable prices.
Our main competitors are “Sleep Well Youth Hostel”; “Auberge de jeunesse génération europe” and “Gîte-Auberge de jeunesse Jacques Brel”. All provide similar layouts, guests facilities and services. They have also the same location: the heart of city centre. Moreover, in terms of green energy, they all have the international eco-label “Green Key”.

* Sleep Well
This hostel promotes itself through its website, Facebook and Twitter, as well as being listed on HostelWorld.com. The rate starts at €22.50 per night for a room with 6 beds to €41, 50 per night for a single room, the total number of beds is 240. Each room has private shower and bathroom. They also propose higher standing rooms with TV/fridge and private shower/WC. The Sleep Well Youth Hostel targets backpackers of all ages and families, who are willing to discover the European capital and housing in a modern and convivial infrastructure. It distinguishes itself by proposing to its clients local, organic and fair trade products and their use of renewable energy (100% green electricity).

* Génération Europe
This hostel is advertised on Facebook, all information can be found on many websites including Hostelworld.com or on hihostels.com. The rate is segmented by age, for the under-26years the rate differs from €37.70 (single room) to €24 (room which has 4 beds or more) and for those over-26 years, the rate is increased by €2.60. It provides 40 rooms from 2 to 8 beds, with showers and WC. Hostelling International's members benefit from some advantages giving them a 10% discount on room rate. Its main target group are both young and old people. It distinguishes itself by its societal and environmental responsibility policy and its actions taken in order to reduce significantly the water consumption.

* Jacques Brel
This hostel uses social networks and some youth hostels’ booking websites to promote their services. There are 174 beds, the rate amounts to €34.70 for a single room and to €21 for 3 or 8-beds room, with an extra charge of €2.60 for the over-26 years. This hostel is listed on “Hostelling International”. Green actions of this youth hostel are based on waste recycling, replacing energy-intensive halogen lighting, installing sanitary facilities with flow reducers and proposing organic products.

Customers
Our service is mainly characterized by a business-to-consumer marketing. Indeed, we offer a sleeping accommodation to all kinds of individuals even if our main target group is budget traveller concerned about environmental issues. In the hospitality industry, consumers' demand is heterogeneous, clients are more receptive to the quality and to the benefit earned from our service. Therefore, all our efforts are focused on providing a high quality client service and try to meet all different expectations of our clients.

SWOT Analysis
Strengths
Weaknesses
Location: tourist area, capital of Europe
Seasonality
Close to airport and railway stations
Increasing cost for green power
Start – up
Slightly more expensive than competitors
Near the city center, restaurants and shops
Convenient access to public transportation
Affordable prices respected to services provided
Less energy-intensive than competitors
Not many youth hostels labeled green in Brussels
Qualified and experienced staff
Partnership with Tour Company
Opportunities
Threat
Changes in people's way of thinking, more eco- friendly attitude
Low barrier to entry (easy access for competitors)
Depletion of natural resources
Competition with major hotel chains (brand image and quality) Development of renewable energy
Heterogeneity of Demand
Move towards sustainable development
Strict regulations
Unsteady prices for organic food

Marketing Mix

Service
The core service of our hostel is the sleeping accommodations. In order to provide a good night's sleep, we have high quality bedrooms with all the necessary comfort. As different consumers have different need, we complete our service with extended ones. Since breakfast is considered as the most important meal of the day, we propose to our customers to take it in our breakfast bar. Compare to our competitors our breakfast does also contain basic products then we will concentrate all our efforts to provide our clients organic and healthy commodities coming from local producers and supermarket specialized in selling green products. In such a way we tend to introduce them to better food hygiene and maybe change their habits. Besides, if they feel a little puckish they can find, after breakfast hours, a wide choice of different snacks and drinks.
Regarding to entertainment services, there is an “Expo room” with multi-media and audiovisual equipments. The goal with the “Expo room” is to provide to our customers an overview of the current environmental issues such as global warming, pollution, renewable energy or waste management. Each theme we propose is discussed in a funny and interactive way suited to a large public. A lounge is also available to our customers.
Our hostel offers shuttle services to drive our customers to and from Brussels Airport or some railway stations. We also organize sightseeing tours around Brussels. In order to meet these objectives and always meeting environmental issues, we have at our disposal an electric bus which represents a smart investment in terms of green transport alternatives.

The main service strategy to meet our customers’ expectations is to focus on the atmosphere of our hostel, we want to make our clients feel comfortable and develop a sense of community while adopting an eco-friendly attitude. We want these criteria are the primary reasons why targeted customers choose our hostel. Moreover, our extended services; entertainment, organic breakfast bar and transportation services lead us to our second service strategy. We have to point out these services in order to make a clear differentiation from our competitors and then create a competitive advantage.

Pricing
Our pricing strategy has to be consistent with the demand we are confronted for. Indeed, our main target market is budget travellers and they expect reasonable prices that made our market very price sensitive. However, our company needs to be commercially viable, and then we cannot afford to be too “low cost”. Besides, we have made huge energy investments which we have to cover. Consequently, our room rates are slightly higher than those of our competitors while keeping it affordable to our target market, nonetheless they reflect the quality of services provided as clients would expect.
Demand in our sector varies throughout the year; flexible pricing seems to be relevant in this situation. Indeed, we might expect higher demand during the high season such as summer or Christmas holidays and, for instance, after acquiring a customer base, we can afford to increase room rates in order to make more profit.
We can add to our pricing strategy the fact that all our extra services such as entertainment, transport and breakfast are not included in the room rates and then represent additional revenues for us. The quality and practical side of these services make them attractive and unavoidable. Therefore, the benefit which can be derived is not negligible.
We also propose special rates for long term stay (three to six months) in order to better compete with indirect competitors such as “hotel apartment” for example.

Promotion
Nowadays, the Internet has taken a preponderant place in the hotel industry. Therefore, we felt it important to provide an online interaction with our clients through personalized website and via social network such as Facebook and Twitter which are known as a young niche market. These communication channels allow our target market to learn more about our company, get crucial information relating to different kind of promotion, have access to feedbacks of people who already spent time in our hostel or about some events. Moreover, this strategy can help us to have a more effective international impact.
Regarding to our advertising strategy, we use brochures to attract more adventurous travellers who travel from day to day. Indeed, these brochures will be distributed in some strategic places such as tourist locations, university areas or in some places primarily frequented by youth which are also part of our main target market. Brussels Tourism Office provides all needed information to our clients about us.
Sometimes some events including conferences and drinks with free entrance concerning environmental issue are organized in order to let us known thanks to word of mouth.
We are also promoted by our intermediaries. Indeed, travel agencies advertise our hostel on their website and catalogues. Besides, being member of Hostelling International highlights the fact that our hostel is an approved one.

Place
Our location is part of our strategy. Indeed, we are located in the centre of Brussels. Brussels as the capital of Europe is known as a crossroads for many travellers. In this way we tend to attract our target market represented by backpackers, international students or local travellers who are more interested by finding a comfortable accommodation for their stay than in the eco-friendly side of our hostel. Individuals who are interested in moments for rest and calm may choose our hostel because it is located near to the centre of the city in “Bois de La Cambre”. Brussels is a strategic choice, indeed, it is becoming the must-see destination of Europe with a lot of touristic and entertainment places, museum, restaurants, shopping centre and its inescapable brewing and fries barrack. We have chosen “Bois de la Cambre” since we are still in Brussels but in a quieter and comfortable location and less stressful environment.
Our location offers several ways of transportation for our customers to access us. Actually, the public transport network is well served. Moreover, the accessibility is facilitated by our electric bus shuttle.

People
The fact that our service is produced and consumed at the same time makes important to leave a positive impression to our client. Our staff is first in line, directly in contact with our customers and therefore they represent, at first sight, the level of quality in our hostel, the brand image and corporate ethics. People hired are qualified and well trained in order to maintain a high quality services. Staff members are friendly and helpful, they welcome customers smiling and with good mood. They are here to satisfy all clients' needs from material needs to tourist information and these 24 hours per day and 7 days per week.
In order to keep our personnel well experienced we tend to organize briefing almost twice a month to discuss about different issues that happened in last days and find ways to improve our responsiveness and how to deal with these eventual concerns. Moreover, we tend to maintain a pleasant atmosphere between team members that encourage open and honest communication. It is important for us to develop a team spirit by fostering employee interaction to have good teamwork.
The goal of this strategy is to satisfy our target consumers in order to reach and retain them, created a good image which will spread through words of mouth and then will generate a positive impact on our hostel's reputation. In addition, efficient personnel management can give us a competitive advantage in the market.

Physical evidence
Many tangible products can attest our core service which concern, for example, bathrooms and bedrooms facilities. Moreover, our website is also a proof of our standing, just as well as the way how we identify our staff namely through uniforms and the fact of sending mail to confirm the booking made.

Process
Our service can be delivered in many ways, clients can book rooms by phone directly in contact with the reception and through our website. We try to have high quality customer service, via a qualified staff and a hosting service available 24 hours per day and 7 days per week. Through this, we want to create high contact with our customers in order to react faster to customer's complaints. Indeed, we are very receptive to customer's complaints and expectations. We take care about them after their arrival, rooms are directly available and clean, no need to wait.

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