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MARKETING STRATEGY CACTUS ROYAL SPA & RESORT

2016

THEOFILOS HALKIADAKIS SA

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CONTENTS

About Us 3

Board of Directors 5

Competition 6

Market Needs 7

Macro environment 7

Mission 8

SWOT Analysis 9

Historical Results – Sustainability Report 10

Marketing Strategy 13

Marketing Objectives 14

Value Proposition 17

Critical Issues 18

Financial Objectives 18

Marketing Mix 19

Place 19

Product Marketing 19

Pricing 19

Promotion 19

Sales Forecast 20

Expense Forecast 22

Controls 24

Marketing Organization 24

Awards 25

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ABOUT US

Cactus Royal Spa & Resort belongs to the family of Cactus Hotels

operated by Mr. Nicos Halkiadakis. Established in 2010 in an area of

natural beauty on the sea – side road of Stalis next to the most celebrated

sandy beach of the area, the five – star holiday resort of Cactus Royal

arises majestically with a wealth of services and experienced staff Cactus

Royal guarantee customer satisfaction and value for money.

The number of staff employed is about 100 people and the biggest

percentage of our guests is German. The other percent of our guests

comes from Russia, Holland, Austria, France and Belgium. The offer

facilities are three separate pool areas (two outdoor and one indoor),

dining facilities, elegant bars and cafes, spa and a fine friendly

atmosphere are at guests disposal and are spoiled by accommodation

choices.

Synonymous with the hotel are the high level of personal service guests

receive, and the extensive range of comprehensive business

facilities available in luxurious settings.

The bulk of the revenue comes from leading customers - Tour Operators

mainly active in the European tourism market. The number of customers -

Tour Operators with lower turnovers is limited.

The majority of sales made by seven agencies (TUI DEUTSCHLAND,

TUI NEDERLAND / HOLLAND, ALPI TOUR, JET AIR, KUONI,

TEZ TOUR, L TOUR (TUI HELLAS), HOTELBEDS, SELECT

HOLIDAYS.

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CITIES WITH

DIRECT FLIGHTS

Airline Companies

Aegean Airlines, Aeroflot,

Air Berlin, NIKI, TUIfly,

Olympic Air, SmartWings,

CSA, Cyprus Airways,

Germanwings, Condor,

Jetairfly, Rossiya Airlines,

Easyjet, Thomas Cook

Airlines, SAS, Air Canada, Sky

Express, Minoan Air,

Lufthansa, Minoan

AirTranssero Airlines

LOCATION

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BOARD OF DIRECTORS

THEOFILOS HALKIADAKIS SA

The Board of Directors was constituted on the basis of practical Board of

01/07/2015 and the term of office expires on 06.30.2018.

The company is legally represented by the Board President and CEO, Mr.

Halkiadakis Nikolaos.

Board of directors

Theofilos Halkiadakis SA

Chairman - Managing Director

Nikolaos Halkiadakis

Vice Chairman

Emmanuel Halkiadakis

Member

Theofilos - Frank

Halkiadakis

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Competition

Selected hotels in the area of Hersonissos and Stalis.

Selected hotels in the same category (4 & 5 Star) and provide a similar level

and range of services and the same level luxury facilities.

As seen in the region operates a fairly substantial size of hotels offering

similar services. Some of these belong to a large domestic hotel chain thus

exploiting significant economies of scale, making it possible to offer high

quality services at competitive prices.

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Market Needs

The Cactus Royal Spa & Resort offers value and benefits to our clients,

over and above the standard of our facilities and affordable rates. We

provide our guest with a luxurious, relaxed environment within which to

conduct their business.

Our guests need to know that they can develop a relationship with the

hotel that will ensure efficiency, value for their money and reliability in

supplying them with the support they need, when they need it.

Macro environment

The external issues that affect the Cactus Royal Spa & Resort are:

Political: a non - stable environment which affects all the businesses.

Economic: As with most industries, the hospitality and tourism sector is

experiencing numerous challenges as a result of the global economic

crisis. The industry is feeling the impact of a shrinking capital market and

decreased spending by both corporate and individual consumers. In

addition, tourism can be the driving force behind Greece’s economic

recovery. However, for its achievement the country’s policy makers

should take several measures towards restructuring and improving the

sector. These measures include: enhancement of alternative forms of

tourism, environmental protection, creation of quality infrastructure

and boost of competitiveness through a tourism product that offers value

for money.

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Social: the trend towards cost effective travel leads hotel guests to seek

more value for money, which is where our added value differentiation

strategy comes into play.

Technological: Technology plays an important role in the hospitality and

tourism industry. Both customers and businesses can benefit from

advances in communication, reservations and guest services systems.

Technology allows continuous communication and streamlines the guest

experience, from reservation to check out.

Mission

The Cactus Royal Spa & Resort is dedicated to providing its guests with

the highest quality of service and standards. To positively engage with all

our partners, to understand their sustainability targets and to align our

priorities (customers, suppliers, local community). As a response we aim

to minimize environment impacts, optimize business processes and

maximize safety, quality and performance.

Due to the challenging economic, social and environmental periods our

main goal is to balance well the needs of these three main challenges yet

achieve highest customer satisfaction with minimum environmental and

social impact. We value our place in the community and will work to

develop those relationships and to respect and protect our environment.

Our focus is on offering our guests added value and differentiating

ourselves in our levels of personal service. We provide a quality hotel

experience where guests are valued and respected.

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SWOT Analysis

The following analysis highlights the internal strengths and weaknesses

of our organization and the opportunities and threats facing the company

in our external environment. We must work to improve our areas of

weakness.

Strengths

A strong reputation within the local market.

Effective environmental management system.

Technical innovations to improve customer

experiences.

Awarded by a series of certifications.

Specialized and experienced staff that is motivated

and highly skilled. A well trained team who are

proud of their hotel and respect and promote the

values.

Co operation with local suppliers.

Weaknesses

Differentiation strategy needs to be more clearly

communicated externally, within local and national

markets.

Operations are affected globally due to different

Government policies and parameters.

Seasonal turnover requires ongoing training and

orientation of new staff.

Opportunities

Strong, long-term relationships established with

suppliers.

Innovation in customer services.

Positive signs of the touristic market.

Threats

Economic and political turbulence in most

countries.

Competition on price point.

Fear of terrorist attacks in Greece which will affect

the tourism negatively.

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Historical Results – Sustainability report

Throughout the years Cactus Royal Spa & Resort has achieved many

goals. In the table below we give examples of critical targets and how we

are contributing to the achievements of those targets:

REDUCTION OF ELECTRICITY – WASTE – WATER

CONSUMPTION

We research and consider low energy alternatives

Use of low energy technology for lighting (LED light bulbs, motion sensor

lighting, key card system, etc)

Replacement plan for old equipment

Educate our employees on correct electricity use

Proper maintenance of the equipment

Reduce packaging waste by purchasing in bulk

Waste management (paper, glass, plastic, burnt oil etc)

Proper management of the right amount of food served to guest

We use electronic systems for business purposes rather than paper

Train staff on recyclable waste

We make sure food is used before it is out of date

Purchase of recycling bins in hotel public areas

Install flow control devices for sustainable water flow

Employees education on correct water use

We encourage our guests to support our towel and bed linen reuse programme

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PROPER MANAGEMENT OF HAZARDOUS WASTE

We keep records to show how much hazardous waste we have collected

Safety storage of them in line with national and international standards

Employees training on the correct chemical use

Control of the minimum effect on the environment and on health

Proper equipment – protective clothing for the users

Existence of an “ incident record”

Existence of emergency instructions

ENVIRONMENTAL MANAGEMENT

SYSTEM

Implement effective environmental management system which lead to the ISO

140001:2004

Water quality control

Employees training on correct environmental management system use

We encourage guests to participate

Certification of “GREEN KEY”

“TUI ENVIRONMENTAL CHAMPION” AWARD

INTERNATIONAL LABOUR AND HUMAN

RIGHTS STANDARDS

Written terms and conditions of employment

Non existence of discrimination in any way

Equal pay for equal value work

Good working conditions

Written policy about children’ s rights

Protection of children from all forms of exploitation

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LOCAL COMMUNITY

Promotion of local products through a variety of events:

Cretan breakfast

Cretan product evening

Cooking lessons and cocktail creation

Night with traditional Greek dances

Greek breakfast certification

Donations among various local animal welfare groups

We give information about the local area, services available, activities, etc

Certification of “ WE DO LOCAL”

Co-operation with local suppliers

Environmental

Economic

Social

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Marketing Strategy

Our marketing strategy's objective is to communicate the unique set of

services that we offer to our hotel guests. We attempt to direct the focus

of our guests to the issues of quality and value for the money as opposed

to simply the bottom line costs associated with their stay.

Our marketing strategy will allow us to communicate our brand values,

develop close working relationships with our customers and suppliers and

to identify the needs of our guests in an effective manner. Continued

differentiation and growth are two goals we have set for ourselves.

Growth will take place by targeting new areas of business within both

local and national communities.

One of the most unstoppable demands that is becoming increasingly

complex is the digital marketing strategy. Hotel managers need not

only to service guests, manage rooms, availabilities and pricing, but now

are also expected to compete for guests in new channels and digital

communities that emerge every day. The breakthrough solution for this

complex problem is a digital marketing architecture and tools that provide

a consistent multi-channel experience to hotel guests and prepare hotels

for future digital marketing demands.

STRATEGY

“is a fancy word for coming up

with a long term plan and

putting it into action”

ELLIE PIDOT

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Marketing Objectives

We have already put into practice the management of the online identity,

presentation, promotion and sale of our hotel services and our main target

is to reinforce them through our marketing strategy.

Changes to the website: On average, guests spend 6 minutes on

hotel websites. 6 minutes is ample opportunity to engage your

future guests with bold pictures, easy-to-read room descriptions

and attractive offers that make the decision to book simple and

predictable. One additional important item is to show what guests

will experience when they come to your destination: ensure video

is part of your web strategy and you will mesmerize your guests.

Social Media Marketing for the group:

Creation of Social Media Pages on Facebook, Google Plus,

YouTube, Pinterest, Instagram

Set promotional axes

New actions

Channel Management (at least 2-3 posts per week) on

facebook

Contest - facebook (1 per year)

On the other channels we will reproduce in the right way the

Facebook strategy

Email marketing for the group: We send offers with

personalized email to existing hotel guests. (The offers that will be

sent are different and selected based on the analysis that we would

already have done - classification criteria and evaluation of the

customers – per customer categories, sales channels, markets

etc.)Email Campaigns Travel Agencies. Also we send personalized

festive eCards on occasions like Christmas etc.

Google Adwords - Pay Per Click (PPC):

Determination - total budget allocation (per period, company

(Google, yandex, facebook) ect.)

Especially for GOOGLE:

o Creation of Google / Adwords account

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o Determination of the campaign number (per purchase,

link, etc).

o Budget Allocation in campaigns

o Keywords choice

o Creation of messages & banners (+ translations)

Campaign operation rules strategy (ex. remarketing list)

Performance evaluation and redesign of ads based on technical

analysis

Competition:

Definition of the competition and systematic monitoring

Classification of the rooms, for the best selling opportunities at

the right customer, for the right price

Finding competitive prices (at least 1 time every 3 months, key

source: booking.com)

Sales Strategy:

New contract with OTA’s in collaboration with the sales

department of the hotel

Upload - Update information in OTAs (texts, photographs etc.)

Room type choice per channel of sales

Define Rates (price comparison, discount percentage per price

list, booking code, secret deals, etc.)

Define policies (Payment & Cancellation policies)

Distribution – Channel Management (included)

Revenue Management:

Sales allocation scenarios (what prices and what

availabilities the hotel offers per online tour operator, so the

profit maximizes)

Choice of extra amenities and services in specific price lists

Price choice in comparison with the number of night stays

and number of guests

Determination of specific rates with specific passwords (ex.

repeated)

Flash Deals (booking.com, Expedia etc.) for special offers.

Create Offers

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Technical Analysis:

Sales

o Analysis per Date

o Analysis per Booking window

o Analysis per Channel

o Analysis per Country

o Analysis per Room Type

Demand

o Site

Conversions

Reports:

eSales report every 2 months

Demand report every 2 months

Reputation report every 2 months

SEO report every 2 months

PPC report every 2 months

Social Media Report

email marketing report

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Value Proposition

The Resort & Spa is comprised of 177 contemporary and unsurpassed

rooms of which 16 are suites, fully equipped promised to offer sunken

living and a restful stay. Each one possesses its own distinctive

atmosphere and is designed with their unique furniture and allure to

deliver to its guests a premium balance between relaxation and comfort.

Senses are taking off when our guests indulge themselves into a unique

experience while dining in our 2 exquisite restaurants “Philoxenia” &

“Elia”. Flirt with taste while our culinary assemble the finest in food to

ensure a delightful gastronomic journey that is restrained and tasteful and

it reflects the vibrancy of the Hotel’s elegance. Offering a wide range of

delectable assortments, a phenomenal presentation of regional (traditional

– local) and international flavored dishes, our culinary will make your

dining options abundance, peppered with a great selection of winery.

Main Bar “Notos”, Pool Bar “Eros” and Kafeneio “Petrino” offering an

affluent variety of drinks and cocktails partake to foster a sense of

extraordinary presence of the hotel that every connoisseur would envy.

The apotheosis to satisfy your desire for relaxation and serenity climax in

our modern, luxurious, full service Spa Center where you can spoil

yourselves in the splendor and tranquility. You can choose any of our

facial and body treatments in our aesthetic center”Aphrodite” or any

beauty services in our hair salon “Chloe”.

Our care is extended in our completely equipped gym “Atlas”, where our

guests benefit reinforcement and well-being.

Spa Center is one of the most prominent Spas in Crete to spend your time

relaxing in an elegant ambience and stands successfully compatible to the

most demanding Spas of the world.

The all stone-build of the hotel, perfectly imbued with refining,

hospitable, attentive services along with a striking, dreaming

surroundings establishes Cactus Royal Spa & Resort as the most

significant destination in Crete.

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Critical Issues

Critical issues for Cactus Royal Spa & Resort include:

Regular training and education for staff in aspects of environmental

management and sustainability.

Continuing to differentiate from our competition and offering

added value to our guests.

Raising the awareness of the local community in environmental

management and sustainability.

Maintenance of the results of laboratory analysis in accordance

with quality standards and specifications.

Maintenance of the offered services and products, continuous

monitoring of the questionnaires and corrections where deemed

necessary for the maintenance of good results in the questionnaires.

Retaining our current levels of repeat business and developing

further customer loyalty in a competitive market.

Keep payroll expenses down.

Accomplish growth within the given budget and time.

Expand our markets and identify new markets for our product and

services.

To provide a positive hotel experience to all our guests.

Financial Objectives

Increase overall room revenue

Accomplish growth within the given budget.

Keep payroll expenses down.

An increase in days of hotel operation. This increase compared to

previous years is reasonable according to the industry average and

favorable conditions created to extend the tourist season.

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Marketing Mix

Place

Service information is sold to the guests via Tour Operators, personal

selling, direct marketing, advertising and Internet. Delivery channels

include travel agents and international reservation systems.

Product Marketing

High reputable hospitality name, up standard service, refined & timeless

elegance and a warmly relaxed stay that is unique, Cactus Royal Spa &

Resort invites you and offers you the most ideal & impeccable

environment for your holiday to become a memorable and dreamy

experience.

Pricing

Pricing strategy has been consistent with the differentiation objective, to

provide added value for a reasonable rate as opposed to discounting and

de valuing our products and services.

Promotion

Primary focus will remain our cooperation with Tour Operators and then

we support the mass communication via Internet, Web site, OTAs

(Online Travel Agents). Direct mail campaigns to existing and

prospective clients will increase as a cost effective means of targeted

campaigning. Public relations activities will continue to play an important

role in the marketing mix, presenting the hotel as a supportive member of

the community and participating in significant local events.

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Sales Forecast

INCREASE / DECREASE

Rooms

0%

Operation days

0%

Given Rooms

0%

Average price per stay /room (ADR exc VAT)

+2%

Room Occupancy 0%

Income of Spa / Gym

+1%

Grants

0%

Rent income

0%

Other revenues

1%

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The completeness of the hotel on the basis of assumptions expected

to stabilize in subsequent years to 2015 rates based estimated data

nights.

The Thalassotherapy / fitness revenues and other income is

expected to grow 1% per year.

The grants will be maintained at 2014 levels and they include only

fixed grants with respect OAED programs.

For the years 2016-2024 the average nightly rate is expected to

increase by 2% per year, which will lead to 2024 average price at

EUR 137. This assumption of data market conditions, endogenous

factors such as services offered and the markets on which active

and historical data is considered to be founded.

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Expense Forecast

EXPENSES INCREASE / DECREASE Stock Cost

17% of sales

Payroll Cost +2%

Compensation and third party fees +1,3%

Electricity, Water, Telecommunication +2%

Repair and Maintenance +2%

Rental homes, lands, Stalis Star 0%

Leasing Rentals Based on payment program

Other Rentals +1.3%

Clothing washing +1.3%

Other operating costs +1.3%

Taxes - Fees +1.3%

Promotional – Advertising Costs, Animateur

Costs

Based on sales growth

Impulse materials +2%

Other various costs +1.3%

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The estimated costs concern the whole business (CACTUS ROYAL

SPA& RESORT and CACTUS BEACH).

The cost of inventories based on the Business Plan remains fixed as

a percentage of turnover to 17%. Stabilization. This is consistent

with data from previous years and anticipated revenue by 2024.

Payroll costs as shown in the diagram previous page is the most

important cost. This basis assumptions increased 2% every year

being a time of about 28% of turnover.

The electricity costs, water and telephone connections increased by

2% per year.

Repairs and maintenance are expected to rise by 2% each year.

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Rents for staff residential accommodation and land rents expected

to show no change as values are fixed. For property rentals leasing,

these follow the payment schedule with 71% of the annual cost be

recognized as expenses, while the remaining 29% to fixed.

The costs relating to the clothing washing following the increase

1.3% / year on the basis of Average the CPI for 2014 and the

percentage increase of sold rooms.

The late taxes are expected to show an annual increase of 1.3%

under the average of the CPI for 2014, but showing the rest of 2015

decreased by € 60 thousand compared to 2014 as this amount

regards stamp duty on loan agreements between shareholders and

the company.

The promotion and advertising costs and expenses animateur. They

grow under sales growth.

The other costs as shown in the adjacent table appear to follow an

increase of 1.3% / year on the basis of Average the CPI 2014.

Controls

Our marketing plan is structured to enable us to achieve the strategic

goals we have set for ourselves, in terms of increasing overall revenue as

a result of differentiating our products and services from the competition.

Our marketing team will ensure that the plan is implemented to the best

of their ability and with the highest levels of efficiency and accuracy.

Marketing Organization

Our marketing director leads our PR and marketing team in all

advertising, promotional and public relations related activities,

monitoring the effectiveness of the marketing plan and evaluate results.

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Awards

With countless guests repeatedly choosing Cactus Royal to spend their

holidays, the reputation of the hotel has spread to all four corners of the

world. Our marketing strategy, also, leads our hotel to gain every year

more and more awards.

As our main effort and goal is to offer the best possible holiday solutions

to all our guests. As a result, Cactus Royal has been selected among

thousands of hotels and has won several annual awards from different

tour operators and tourism competitions. Below you may find a sample of

them:

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The hotel was checked and completed the criteria needed for all the types

of the certifications mentioned, showing very high commitment to

sustainability and social responsibility. With all these awards and

certifications Cactus Royal Spa & Resort creates opportunities for

improvement, communicates its actions and encourages others to act in

the same way.

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CACTUS ROYAL Spa & Resort, Ag. Ioannis str., 70007, Stalis, Crete, Greece. Tel. +30 28970 35001• Fax. +30 28970 35080 www.cactushotels.gr• info@cactusroyal.gr