Investing in Cultural Tourism: A Strategic Crossroads for Vila Galé Hotel Group

Abstract

Jorge Rebelo de Almeida (JRA), CEO of Vila Galé hotel group in Portugal, has an opportunity to invest in two important historic heritage sites in the countryside. Doing so will mean cutting back in other areas he wants the business to grow, such as internationalization. Will the investment be worth the risks? Vila Galé is the second largest Portuguese hotel group, with three decades of existence and properties spanning the length of Portugal. It also operates several hotels and resorts in Brazil. With the consolidation of its position in the national market, JRA and the group’s board of directors have invested strategically in segmentation, diversification and innovation, becoming a recognized brand in family beach tourism and other areas. Cultural tourism with the recovery of historical heritage is a business area that various board members and some in the Rebelo de Almeida family favor entering, even though it carries risks. They know it is a market segment where there is still a long way to go; it implies partnerships with third parties and opens new challenges (Hughes and Carlson, 2010). In this case study students are invited to: a) to explore the challenges of strategic management and innovation in a crucial and extremely competitive sector; b) to identify the competitive advantages and disadvantages of diversification and segmentation for a given business, and c) to discuss the issues that emerge from the Vila Galé Group management in terms of decision-making.