Formulating a Blue Ocean Strategy to Revitalize the Hotel Industry: The Case of the Residence Hotel Industry in Korea

Purpose – The purpose of this study was to provide a systematic technique for building a blue ocean strategy for residence hotels using research methodologies on customer satisfaction aspects in marketing on a strategic canvas and an ERRC matrix. Design/Methodology/Approach – To do this, we conducted a survey among hotel visitors using questionnaire items and a self-administered data collection approach, with each item scored on a 5-point scale. Judgment sampling was utilized as the sample method. We then used the survey responses to generate an ERRC matrix using IPA analysis. Findings – According to the ERRC table, hotel attributes that fall under the Raise category include “cleanliness of rooms”, “hotel location”, and “cultural and convenience facilities around the hotel”. Hotel attributes in the Reduce category include “diversity of food and beverage outlets” and “interior decoration and design”, whereas hotel attributes in the Create category include “cultural events”, “creating cultural streets”, and “a family-friendly atmosphere”. The use of the survey results-based Blue Ocean Strategy in the formulation of innovation strategies can provide managers evaluating creative strategies and strategic generating approaches with objective and detailed suggestions. Research Implications – In the Create category, hotel attributes include “cultural events”, “creating cultural streets”, and “a family-friendly atmosphere”. This indicates that, in order to attract and maintain clients, residence hotels might separate themselves from other hotels by generating demand through the development of local cultural streets. Above all, it is vital to sell not only hotel rooms but also a warm and cozy environment reminiscent of a home.