The New York Stock Exchange listed, and Maryland based Host Hotels and Resorts’ is a Fortune 500 company with interests in the hotel industry. Valued at $13.5 billion, and able to make $5.43 billion in sales, the Host Hotels is well placed to pursue expansion (Forbes, 2018). The organization and its subsidiaries, other than luxury lodges operations, also invests in properties around the world (Forbes, 2018). Competitors include the InterContinental Hotels Group, the global leader in the hotel industry with 4278 outlets, followed by Marriott International, both of which have a presence in Venezuela (www.statista.com). Hilton Worldwide is also a significant player in the hotel industry. Notably, the hugest impediment to entry is immense capital …show more content…
Porter’s position is that the number of competitors, as well as their sizes, determines the intensity of rivalry (Cheng, 2013). Ease of entry refers to barriers that discourage the establishment of new businesses, including economies of scale, reliability, and viability (Cheng, 2013). If suppliers are quite established and clients are not a significant source of business, Porter pointed out that they (the suppliers) are well placed to influence pricing (Cheng, 2013). Substitutes are the products with potential, often at lower cost, to perform the function of an existing product (Cheng, …show more content…
Hotel operations also tend to be massive to ensure benefits associated with economies of scale which is a disincentive for new entrants. New entrants may also struggle to find strategic locations to set up business and even struggle to match the service diversification and quality of established hotels. However, considering the opportunities in Venezuela’s hotel and lodging are still underutilized, it is expected that improvements in economic and political environments should, in future, attract new entrants in the industry. However, with the current currency upheavals and problems in obtaining necessary supplies needed to run a hotel, it is unlikely that new entrants are willing to venture into the Venezuelan market. The decline in the number of tourists visiting Venezuela, who are a significant portion of clientele further discourages competitors from entering Venezuelan marketers (Travel in Venezuela Report,