swot analysis of hotel industry essay

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The swot of a hotel (with examples).

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We've drafted tons of business plans for hotels and, far too often, business owners neglect to dedicate time and thought to crafting a strategic vision for their new project.

It's mainly because they lack the right tools and frameworks. The SWOT analysis is one of them.

What is it? Should you make a SWOT for your hotel?

A SWOT analysis is an essential strategic tool for any business venture, including hotels, enabling them to identify their strengths, weaknesses, opportunities, and threats.

This framework was developed to offer businesses a systematic way to evaluate their internal capabilities alongside their external environment. It's particularly relevant in the hotel industry, which is characterized by its competitive and dynamic nature.

When managing a hotel or considering the launch of a new one, performing a SWOT analysis can be invaluable. It assists in recognizing what the hotel excels at (strengths), areas that need improvement (weaknesses), potential avenues for growth or development (opportunities), and external factors that could present obstacles (threats).

For example, a hotel's strengths might include exceptional customer service or a desirable location, while weaknesses could encompass a lack of online presence or outdated facilities. Opportunities could emerge from market trends like eco-tourism, and threats might involve economic downturns or increasing competition.

Hotel owners and managers often undertake a SWOT analysis when they are planning to open a new hotel, implementing major changes, or addressing specific challenges. It provides an opportunity to step back and consider the broader picture.

By understanding these four components, hoteliers can make well-informed decisions, set priorities, and devise strategies that leverage their strengths and mitigate their weaknesses.

If you're on the verge of starting a new hotel project , conducting a SWOT analysis is not just beneficial; it's critical. It helps you identify what makes your hotel unique, where it might need further resources or improvement, and what external factors you need to prepare for.

While a SWOT analysis doesn't ensure success, it greatly enhances the likelihood of achieving it by offering clear insight and strategic direction.

How do you write a SWOT analysis for your hotel?

Filling out a SWOT analysis for a hotel you're planning to manage or own can seem daunting, especially when considering future strengths, weaknesses, opportunities, and threats.

Conducting a thorough market analysis and reviewing hospitality industry reports can be extremely valuable. These resources provide insights into travel trends, guest preferences, and the competitive environment.

Engaging in conversations with other hotel operators or industry experts can also be enlightening. They often share practical experiences and perspectives that might not be captured in formal reports.

Remember, the objective of a SWOT analysis is not to foresee the future with absolute certainty, but to equip yourself to navigate it with informed strategies.

When assessing strengths, consider what distinct advantages your hotel could offer.

Perhaps your hotel is situated in a prime tourist location, or it boasts unique amenities like a world-class spa or a renowned restaurant. Your strengths might also include a well-trained, hospitable staff or a unique architectural design that stands out. These are internal factors that can set your hotel apart in a crowded market.

Identifying weaknesses requires honest self-assessment.

You may face challenges like limited capital, which can affect your ability to renovate or market effectively. Inexperience in hotel management could be another weakness, or maybe your hotel is in a less desirable location. Limited services compared to competitors or outdated facilities can also be weaknesses.

These are areas to focus on for improvement or to seek external expertise or investment.

Opportunities

Opportunities are external factors that your hotel can capitalize on.

For example, if there's an increasing trend in eco-tourism and your hotel offers eco-friendly amenities, that's an opportunity. Collaborating with travel agencies or online booking platforms could expand your reach. Identifying a market segment that's underserved, like business travelers or families, can be an opportunity. Upcoming local events or infrastructural developments that might boost tourist inflow are also potential opportunities.

Threats are external challenges that could impact your hotel's success.

These could include new or stricter regulations in the hospitality industry, economic downturns affecting travel budgets, or rising competition, especially from large chains or online lodging services like Airbnb. Changes in travel patterns, such as a decline in international visitors due to geopolitical issues, might also pose threats.

Examples of Strengths, Weaknesses, Opportunities and Threats for the SWOT of a hotel

These strengths and opportunities can be leveraged to improve the profitability of your hotel .

More SWOT analysis examples for a hotel

If you're creating your own SWOT analysis, these examples should be useful. For more in-depth information, you can access and download our business plan for a hotel .

A SWOT Analysis for a Luxury Beachfront Hotel

A luxury beachfront hotel boasts numerous strengths. Its prime location right on the beach appeals to tourists seeking a picturesque vacation. The hotel's high-end amenities, including a spa, gourmet restaurants, and private beach access, provide guests with an exclusive experience. Additionally, luxury accommodations and personalized services like concierge and room service enhance its appeal to affluent travelers.

However, this hotel faces certain weaknesses. The high cost of maintaining luxury standards can lead to expensive rates, potentially alienating budget-conscious travelers. Also, its reliance on seasonal tourist influxes might result in off-season revenue drops. There's also the challenge of maintaining the pristine condition of beachfront properties, which are more susceptible to environmental wear and tear.

Opportunities for this hotel include expanding into wellness tourism by offering health-focused retreats and programs. Collaborating with travel influencers and luxury brands can increase its market visibility. Diversifying its services, such as hosting private events and weddings, can attract a broader clientele and generate additional revenue streams, especially during off-peak seasons.

Threats include competition from other luxury hotels and emerging vacation rental properties. Environmental concerns, such as beach erosion or extreme weather events, can directly impact its appeal. Economic downturns may reduce luxury travel spending, affecting its primary customer base.

A SWOT Analysis for a Budget City Center Hotel

This hotel's main strength lies in its affordability and central location, making it ideal for budget travelers and business visitors. Its proximity to major tourist attractions, public transport, and business districts provides convenience. Simplified services and minimalistic design appeal to guests who prioritize functionality and value for money.

Its weaknesses include limited amenities compared to luxury hotels, which might not appeal to guests seeking a more indulgent experience. The compact room sizes and basic facilities might not satisfy guests looking for longer stays or more comfort. Noise and safety concerns in busy city centers can also be deterrents.

Opportunities exist in forming partnerships with local businesses and tourist attractions for promotions and package deals. The hotel can tap into the growing market of solo and millennial travelers by offering unique experiences and social events. Implementing sustainable practices can also attract environmentally conscious guests.

Threats include intense competition from other budget hotels and short-term rental services like Airbnb. Economic fluctuations can impact travel budgets, affecting the hotel's target market. Additionally, maintaining high occupancy rates during off-peak periods remains a challenge.

A SWOT Analysis for a Historic Boutique Hotel

The historic boutique hotel's strengths lie in its unique charm and character, offering guests an immersive experience in a historical setting. Its attention to detail, personalized service, and unique décor set it apart from chain hotels. Often located in culturally rich areas, these hotels attract guests interested in history and local culture.

However, such hotels may face limitations due to their historic nature, like smaller room sizes and the inability to implement modern infrastructure without affecting the historical ambiance. Their niche appeal might not attract the broader market looking for modern amenities.

There's an opportunity to capitalize on the growing trend of experiential travel by offering cultural, historical, and local experiences. Collaborating with historical societies and local artisans can enhance the authenticity of the guest experience. Marketing efforts focused on storytelling and the hotel’s unique history can attract cultural enthusiasts.

Threats include the high costs of maintaining and preserving historic properties. Changing travel trends and preferences could affect the niche market. Competition from modern hotels offering more contemporary amenities and services is also a concern.

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What is a SWOT analysis for a hotel and how does it work?

Eva Lacalle

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Have you ever heard of a SWOT analysis for hotels? SWOT stands for Strengths, Weaknesses, Opportunities and Threats, and it's a type of analysis businesses can use to determine where their strengths and weaknesses lie internally, and compare the opportunities and threats posed externally by the competition. It's a great way for hotels to strategize, make important decisions and plan for the future.

We’ll look in more detail at what is a SWOT analysis, how it works and some different hotel industry examples. The more thorough your hotel is in conducting this analysis, the more chances you have of determining weaknesses and threats, so that you can overcome your shortcomings and thrive in the face of the competition.

Table of contents

What is SWOT analysis for hotels?

A SWOT analysis is a methodology first developed at Stanford University in the 1960s. It is used in marketing to analyze the success of the different marketing strategies and individual campaigns, or on an organizational level to understand how the business is performing. It's a way of analyzing external and internal factors to make strategic decisions.

In the case of the hotel industry, hoteliers might perform this type of analysis to understand if it's worth investing in a certain advertising campaign, to mitigate the effects of a negative review, or to better analyze any type of business decision, such as choosing the right software in order to help boost your hotel's bottom line.

How does SWOT analysis work?

In order to better strategize and create a plan of action identifying the opportunities for growth and mitigating your hotel's pitfalls, it's important to use the SWOT matrix to get an idea of your hotel's strengths and weaknesses , so you can understand how your hotel is operating internally in order to understand threats from the competition and where your opportunities for growth lie.

So where should you start? Start by going internally to identify what your hotel is doing well and where there is room for improvement.

Identify your hotel's strengths

When we talk about strengths, you should consider both your hotel's concrete competitive advantages like great service, your five-star hotel restaurant, amenities or your hotel's location, and things like your online reputation and guest retention levels.

Determine your hotel's weaknesses

When we talk about weaknesses, it's important to be critical, and think of what is preventing your hotel from being the best hotel it can be. Maybe you have a hard time retaining staff, maybe you have high operating costs and limited profit, or maybe you have bad reviews. Assess what these shortcomings are, so you can design a series of solutions.

After you've determined your hotel's strengths and weaknesses, it's time to analyze external factors. You can do this by creating a benchmark of the competition to understand what threats they pose and where they aren't delivering so that your hotel can fill in the gaps with its services and unique value proposition.

Define your opportunities

This is the moment in the SWOT analysis where you want to see where the competition is falling short and what you can do to offer better service, get more bookings, have happier guests or generate more profit. Benchmarking will help you to understand what the competition is doing and uncover industry trends so that you can get ideas of how to target new markets and unlock new ways of generating revenue.

Pinpoint your threats

Once you've determined where your opportunities lie, it's important to understand what stands in your way of reaching those goals or new markets . Or there may be a new kid on the block who has a similar offering as your property; think about what you can do to stand out, so you don't lose business to the competition.

The idea is to mitigate the effects of these threats by detecting them on time, and to capitalize on the opportunities you determine, while finding the way to turn your weaknesses into strengths.

You may also like:

• What is the metaverse and how does it affect the hotel industry?
• Best ideas to make your hotel eco-friendly
• What is glamping?

Different examples of SWOT analysis in the hotel industry

Now that we've understood the practice of carrying out a SWOT analysis, let's take a look at some practical examples.

A new glampsite

Imagine you've just started a new glamping business and you're trying to figure out the best way to attract new customers. Where would you start?

Read more about getting ready for the glamping boom.

Start by identifying your business's strengths:

•   Unique value proposition
•   Incomparable location
•   Top amenities
•   Excellent service

Now it's time to determine your weaknesses :

•   Bad reviews
•   High prices

Now let's look at the market trends to determine your opportunities :

•   Glamping is a niche travel type that is growing immensely in popularity
•   There is no site like it anywhere nearby
•   Targeting travelers looking for unique and personalized experience

And finally, it's time to analyze your threats :

•   People think of it as a seasonal travel style
•   There's a nearby campsite that has some upscale bungalows offered at a lower price
•   It's a new sector of the market that still has some boundaries to general market acceptance

What are your business's strengths?

•   Sustainability
•   Eco-friendly amenities
•   Great add-on services like nature tours, night tours, star gazing, canoe rides, and more, which drive incremental revenue
•   Knowledgeable staff and nature guides

What are your weaknesses ?

•   The surrounding environment (i.e. bugs and environmental conditions like mud, animals, etc.)
•   Remote location makes it difficult to find staff
•   Must provide lodging for staff
•   Difficult to arrive

What are your opportunities ?

•   Specialized target audience who is less price-sensitive
•   More add-on services; due to remote location, you can internalize all services
•   Possibility of catering to luxury audience

What are your threats :

•   Long rainy season makes it perceived as a seasonal resort
•   There are other ecolodges on the market who have been around longer and have more brand recognition
•   Hard to retain guests. The ecolodge attracts a niche audience who visit the lodge once and has no need to repeat.

In this article we've looked at what is a SWOT analysis in the hotel industry, how it works and some different examples. The key to carrying out this type of analysis is to evaluate your hotel's performance critically, while doing benchmarking to understand your hotel's market share, identify weaknesses and threats, so that you can help your brand withstand any pressure from new competition.

At the same time, a SWOT analysis helps you to better prioritize and allocate resources where necessary in order to have a more efficient and profitable operation. With a carefully prepared SWOT analysis, you can better unlock opportunities for revenue management and be sure that your hotel is prepared for any obstacles that arise. After all, resilience is the way to success, and understanding your shortcomings is essential to keep delivering the best guest experience time after time.

Eva has over a decade of international experience in marketing, communication, events and digital marketing. When she's not at work, she's probably surfing, dancing, or exploring the world.

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Hotel SWOT Analysis

What is hotel swot analysis.

A Hotel SWOT analysis is a tool used in hotel revenue management consulting that hotels employ to evaluate their internal opportunities (strengths and weaknesses) as well as external opportunities and threats to their business. At XOTELS,  have performed competitor analysis for many hotels. Our revenue management experts compare review scores on the different facilities and services of the hotels, with the price positioning. 

It is useful to detect opportunities ahead of time and plan how to approach bottlenecks proactively. This tool contributes value by allowing for a more accurate decision-making process that helps building a solid strategy for your business. Below we share with you our experiences and approach: 

Maximize internal resources:

• Play and adjust better to your strengths.
• Invest in your opportunities.

As for the external opportunities:

• Turn weaknesses into strengths. 
• Detect and minimize the impact of threats.

General Examples of Strengths, Weaknesses, Opportunities and Threats

SWOT analysis can contain many different topics. See below some examples of what can be included into the analysis:

SWOT Examples per Hotel Type

Since so much variety exists in the hotel industry, we have included some cases that highlight different examples of what can be described in the SWOT analysis for various hotel types:

Small-scale Independent Boutique Hotel

• Strength: Flexible/agile decision making, not limited by the boundaries set by major brands
• Weakness: Loyalty benefits vs major brands are difficult to compete with as individual hotels. Unawareness of the hotel (difficult to spot from outside the building)
• Opportunity: Easily adapt to new/emerging markets with new products and services and digitalization.
• Threat: Power/market share of OTAs and Google

Urban Luxury, Centrally Located in a Large Metropole

• Strength: Strong character (building, interior, knowledge staff, location)
• Weakness: High cost price and manpower (due to quality products)
• Opportunity: Targeting travellers looking for highly personalized,unique and private offerings (opportunity to take it to the next level as a luxury property). Opportunity for luxury digitalization.
• Threat: Competition international brands, with long history and established in luxury segment

Rural Resort, in Proximity to Popular International Travel Destination

• Strength: Exceptional location and amenities such as a beach, pool, and restaurants
• Weakness: Difficult to find quality manpower in certain regions
• Opportunity: Emerging travel types to escape city life, opportunities to host events such as weddings, incentives meetings 
• Threat: Heavily dependent on tourism, seasonable demand

Maximize Your Hotel Revenue

Uncover the hidden revenue potential of your hotel or resort.

Step by Step Actions

Start by investigating the following to assess the status quo:

Critically assess your performance

Here are a few metrics you may want to include in your analysis:.

• Revenue per Available Room ( RevPAR )
• Average Daily Rate ( ADR )
• % Occupancy ( Occupancy Rate )
• EBITDA margin 
• % Direct bookings ( Direct Sales )
• Average group size
• Event activity
• Sales cycle length (by segment)
• Start benchmarking your products and services to your competitors

Market share

• Calculate your market share

Online reputation

• It is important to respond to negative reviews and work on improving your review scores

Website traffic

• What slice of the pie goes to your own website?
• What are the metrics like?
• Find opportunities to start driving direct sales

There is a need to perform these steps of the SWOT analysis both for existing and new hotels in order to perform better. This tool will present new hotel and revenue management opportunities and will be helpful for identifying weaknesses and threats to make your business stronger and more resilient. Creating a great SWOT is a time-consuming process and might require external help from a hotel revenue management consulting and hotel management company to fully draw the potential of the hotel out.

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Hotel SWOT Analysis Explained with 3 Detailed Examples

7 minutes read

Whether you own a small, family hotel, a medium-sized hotel, or you are on the managerial team of a big hotel, you will benefit from conducting a hotel SWOT analysis . This strategic planning framework is a great way to gather and inspect all the factors that influence your business, regardless if they are internal or external. Even a big, multinational hotel can put this tool to great use. That’s why, you can find a SWOT analysis of Hilton Hotel here.

In this article, we are going to inform you of what a hotel SWOT analysis is and give you three specific hotel SWOT analysis examples for some of the most well-known hotel chains in the world. Let’s dive in.

What Is the Hotel SWOT Analysis

The hotel SWOT analysis is a strategic planning framework that surveys the strengths, weaknesses, opportunities, and threats that the hotel is facing. This is a very insightful tool that uncovers all the factors that make the business successful, but also all the elements that need improvement. At the same time, the hotel SWOT analysis defines the opportunities that are found in the hotel’s environment and the potential threats that might hinder its operations. For instance, a SWOT analysis of Hilton Hotel will reveal all the internal and external factors that work for and against the hotel chain.  

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SWOT Analysis of the Hotel Industry

Nevertheless, you might feel hesitant to conduct a hotel SWOT analysis for your business. To help you gain a better understanding of the concept, we will analyze the four sections found in the tool in the context of the hotel industry. These are all the elements that you are going to encounter in the hotel SWOT analysis examples below, such as the SWOT analysis of Hilton Hotel and the other hotel chains.

1 Hotel Strengths

The first section of the hotel SWOT analysis consists of the hotel’s strengths. This includes all the competitive advantages that the business has gained over the years and all the factors that make it an attractive option to customers. The most common strengths that you are going to find in hotel SWOT analysis are:

• The hotel’s location. Is it downtown or near a shopping district? Is it accessible? Are there multiple locations?
• The hotel or chain’s brand reputation. As you will see in the SWOT analysis of Hilton Hotel, brand reputation is one of the most significant strengths of this chain.
• Amenities and facilities. These include all the services the hotel offers to its visitors.
• High-quality services. This can refer to the staff employed by the hotel and the luxury services offered there. This will be a common theme in all the hotel SWOT analysis examples we will examine below.
• Effective marketing. Are the marketing campaigns bringing the desired results?
• Loyal customer base. When people find a hotel they like, they tend to book a room again and again. Is that the case in your hotel SWOT analysis?

2 Hotel Weaknesses

The following section of the hotel SWOT analysis is about the business’s weaknesses. In this part, you need to recognize what might be going wrong and what areas need to be improved. The most common weaknesses that you will find in the hotel SWOT analysis are the following:

• Outdated facilities. Could your hotel be renovated and modernized?
• Staffing shortage. Are there enough staff members for the number of visitors your hotel receives? Can they offer them high-quality services?
• Insufficient marketing efforts. Have you invested in the marketing of your hotel?
• Dependence on seasonal visitors. The hotel can only be profitable if it receives a steady stream of visitors all year long. Therefore, only receiving seasonal visitors puts it in a vulnerable position.
• Inadequate maintenance. Are the amenities working properly? Do you need to replace them?

3 Industry Opportunities

The next part of the hotel SWOT analysis consists of all the external factors that you could potentially utilize to grow your business. The most common opportunities in the hotel SWOT analysis are these:

• Market expansion. This refers to a new hotel location, a different country, or expanding toward a new customer segment. This is something found in many big hotel chains, like the SWOT analysis of Hilton Hotels.
• Technological advancements. For example, you could create a user-friendly inline booking form that will make it easier for your customers to make their reservations.
• Service diversification. Found in almost all hotel SWOT analysis examples, this opportunity allows you to think of new services that you could offer to your visitors that will make their stay more memorable.
• Event hosting. A great opportunity for every hotel is to host various events, social, cultural, or corporate. This is one of the things that stands out in the SWOT analysis of Hilton Hotel.

4 Industry Threats

The final part that you need to add is the threats that are in the environment of your hotel. These factors might put obstacles in your business endeavors and affect the effectiveness of your strategies. The threats that you will find the most in the hotel SWOT analysis are the following:

• If there are a lot of hotels in your region, then you are all fighting for the same pool of customers.
• Economic instability. Usually, the economic crisis affects all businesses, including hotels. This is an element present in the analyses of big hotel chains, such as the SWOT analysis of Hilton Hotels.
• Damaged brand reputation. Sometimes, a scandal can affect the hotel significantly. In this case, you need to take immediate damage control actions.
• Shift in traveling habits. It is common for travelers to want a different experience. For instance, they might seek out an Airbnb, a hostel, or a bed and breakfast.
• Environmental factors. This might include floods, earthquakes, and other natural disasters that prevent visitors from coming to your hotel.

Hotel SWOT Analysis Examples - 3 Famous Chain Hotels

Swot analysis of hilton hotel.

The first example that we are going to go through is the SWOT analysis of Hilton Hotel. Of course, this is one of the most well-known hotel chains in the world with a presence in 122 countries and territories. Therefore, the SWOT analysis of Hilton hotel becomes as follows:

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• Hilton has a strong global presence since it operates in numerous different countries and territories.
• It has strong brand recognition. Hilton has become well-known as a premium and luxurious hotel brand.
• The hotel chain has a diverse portfolio of hotel brands that range from luxurious to mid-scale.
• It has launched the Hilton Honors program, which is a customer loyalty program that rewards its visitors.
• The hotel has become synonymous with quality service by offering personalized experiences.

Weaknesses:

• The operations costs are high since the hotel needs to maintain high standards and luxurious amenities.
• Many of the chain’s locations are owned by franchisees, meaning that they don’t immediate say in their operations.
• Having a global presence, Hilton needs to face various regulations and policies.
• The chain needs to employ a high number of staff members to provide high-quality services. However, staff retention is challenging.

Opportunities:

• The chain can expand to even more locations, especially in emerging markets and popular tourist destinations worldwide.
• The brand can leverage the power of social media to reach a wide audience through creative campaigns.
• The chain can expand into some mid-range and budget options to attract a larger customer segment.
• Hilton could look into strategic acquisitions to diversify its portfolio and gain a competitive advantage.
• The hotel industry is very competitive, and Hilton needs to maintain its services and good brand reputation to preserve its competitive edge.
• Global crises are affecting traveling. For instance, the Ukrainian-Russian war resulted in the Hilton stopping its operations in Russia.
• The economic crisis has made people hesitant to spend their money on a luxurious hotel for their vacations.
• The COVID-19 pandemic has significantly affected the whole industry and it still hasn’t returned to normal.

Hotel SWOT Analysis Example - Wyndham Hotels & Resorts

The next one of our hotel SWOT analysis examples is about Wyndham Hotels & Resorts. Just like in the SWOT analysis of Hilton Hotel, you will see that this is a hotel chain with a strong international presence. In more detail, this example of SWOT analysis will look like this:

• Wyndham Hotels & Resorts has a strong global presence with operations in 95 countries.
• The chain has created a diverse range of hotel brands, thus being able to attract different customer segments.  
• It has introduced the Wyndham Rewards Program, which is a customer loyalty program that gives many benefits to the hotel’s visitors.
• It operates on a franchise model that allows the brand to grow rapidly.  
• The chain has completed strategic acquisitions and mergers, thus diversifying successfully its portfolio.
• It employs highly trained staff to ensure that its services maintain the brand’s high standards.
• The brand has been solidified as a mid-range and budget chain, which doesn’t appeal to high-end luxury travelers.
• The brand depends heavily on franchisees, meaning that they are relying on them to maintain the brand’s standards.
• The chain has implemented many new technologies in its operations that increase the risk of cyberattacks.
• The brand could expand into different countries and regions, especially tourist areas that receive a huge number of visitors.
• More strategic acquisitions will allow the chain to further diversify its brand portfolio.
• The hotel can offer enhanced and personalized guest experiences to boost customer satisfaction.
• The chain can incorporate even more technological advancements, such as AI, to make room reservations even more efficient.
• Many major hotel chains offer similar services, thus significantly increasing the competition in the industry.
• The economic crisis has affected travelers as they are seeking affordable options.
• The global uncertainty makes people weary of traveling.
• Many travelers want to experience the local lifestyle, thus preferring other types of accommodations, such as Airbnb, hostels, and B&Bs.

Hotel SWOT Analysis Example - Ritz-Carlton Hotel

The last example that we are going to examine is a SWOT analysis of the Ritz-Carlton hotel. Just like the previous two, this is a famous hotel chain with a strong presence in the industry. Therefore, the SWOT analysis example is as follows:

• The brand operates in more than 30 countries and territories, which establish it as a global powerhouse.
• The Ritz-Carlton has become a synonym for luxury, having built a prestigious brand image that attracts high-end clients.
• The chain makes sure to offer impeccable, personalized services that give attention to detail.
• The hotels of the chain have a variety of luxurious amenities, including fine dining, spa services, and exclusive event venues.
• The brand organizes employee training and empowerment to ensure that they provide their visitors with the best possible and most consistent services.
• The rooms in the hotels have high prices, thus limiting their accessibility to a broader audience.
• Limiting the target market segment makes the hotel chain vulnerable to economic downturns.  
• To maintain its high standards, the hotel chain depends heavily on its highly skilled staff.
• The brand could expand to more countries, targeting luxurious destinations worldwide.
• The hotels can introduce new services and experiences, such as wellness retreats, culinary events, and exclusive cultural immersions.
• The hotel could leverage advanced technologies to boost its operations, such as the booking process.
• The hotel might benefit from partnering with high-end brands for marketing campaigns that will attract high-end luxury travelers.
• The brand could diversify its portfolio with mid-range hotels, which will increase its customer pool.
• Boutique hotels pose the biggest competition to luxury hotels like the Ritz-Carlton. The brand needs to ensure that it maintains its high standards.
• The global economy is affecting everyone, even the most affluent travelers. Which is indicated by the decline in the hospitality industry.
• Global uncertainty and health concerns prevent people from traveling.

SWOT Analysis Template & Tool

All these hotel SWOT analysis examples are a great starting point for conducting a hotel SWOT analysis for your business. Boardmix allows you to conduct your analysis in no time. The online whiteboard tool has a variety of templates, including a SWOT analysis template . Therefore, you can immediately get started by customizing it in any way you want. Create your new Boardmix account for free to start using all of its features.

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SWOT Analysis of the Hotel Industry – Know the Strengths and Weaknesses

There’s no question the hotel industry is a vast sector that is responsible for trillions of US Dollars in the form of revenue. That being said, a SWOT analysis of the hotel industry is, therefore, paramount.

SWOT analysis of the hotel industry or the hospitality industry overall helps in devising a proper plan to stay ahead of the competition.

Its magical allure lies in the fact that it can help hoteliers globally develop and implement sound and robust business strategies.

As you might expect with an industry with such a massive financial muscle, you need to have a clear-cut business strategy.

This begs the question: Do you really know your hotel industry?

Even before we delve into it, what actually is a SWOT Analysis?

Simply put, a SWOT Analysis is a rundown of all Strengths, Weaknesses, Opportunities, and Threats facing a particular industry or niche.

Herein, we will provide an outlook on the hotel industry as a whole.

Our analysis will focus on its primary business strengths and weaknesses, and how these pitfalls can be harnessed into natural advantages.

With this information, hoteliers can set business goals which can be reviewed at least once a year.

Read on to get a good glimpse of how the hospitality industry especially the hotel industry is panning out.

Strengths of the Hotel Industry

If you are a hotel manager, owner of a hotel or restaurant, travel enthusiast or a wannabe entrepreneur in the hotel industry; understanding the SWOT analysis of the hotel industry is a must.

Background of Hospitality and hotel industry might help to understand the zest of  Service in the hotel industry and hospitality  and explore the analysis further.

Right off the bat, we will have to admit that the hotel industry’s strengths vary from one region to another. Every region has its own advantages and disadvantages.

But, the first step in the SWOT analysis of the hotel industry begins with an incisive look at its universal primary strengths.

1. Provides a Safe Abode Away from Home

It’s undeniable that the hotel industry provides safe accommodation for people when they are away from their homes.

The industry itself boasts millions of decent rooms.

With a variety of hotels across the globe – from boutique hotels to the grandeur of international name brands and everything in between, there’s always a hotel that will fit a customer’s needs.

They offer everyone a place to kick back and relax away from all the hustle and bustle of everyday life and work.

Without the hotel industry, vacations and road trips wouldn’t be safer or even possible.

What else can you offer to customers as a hotelier?

Think about it. It will fall under strengths.

2. Contributes to the Local Economy

As an industry that wields significant financial power, the hotel industry can certainly tide things over in the local economies.

Sure, it’s local attractions that bring the masses to the community, but it’s the hotels that keep them there.

When people stay in a place, they consume local services and goods.

They will visit local malls, eat in local restaurants, and shop in local stores.

And, where do all those top dollars end up? That’s right – within the community.

So, the Hotel industry is a boon to the community.

3. It is a Mammoth of an Employer

Again, the hotel industry is an enormous sector that employs many people in myriad disciplines.

Think in the line of management, groundworks, landscaping, banking, service, and entertainment to name a few.

There are a lot of  Astonishing facts about hotel industry with key facts being that within the next couple of decades 1, out of 10 people could be a hotelier or hospitality professional.

Even after a huge setback due to the COVID-19 pandemic, the hotel industry would still be one of the biggest employers globally.

4. High-Profit Margin

Although the hotel industry requires huge initial capital, it’s still a worthy investment as the cost of labour is lower, and the profit margins are higher.

However, this is not the case across the globe.

While Asian, Latin, African, and Middle Eastern hotels enjoy cheap labour, those in Europe and the Americas are paying a premium in wages.

High-profit margins are key strengths for the following sub-sectors of the hotel industry.

• Luxury hotels and resorts
• Boutique Hotels
• All-Inclusive Resorts
• Casino Properties
• Spa and Lifestyle Resorts

Weaknesses of the Hotel industry 

Now, this is a crucial part of the SWOT analysis of the hotel industry. After all, mastering their weaknesses is what gives hotels a competitive edge.

Let’s look at a few of the weaknesses that we need to be careful with.

1. High Hotel Rates- Huge setup cost

Here’s the thing: High-end hotels charge thousands of US Dollars to stay there for a single night.

The problem is that these rates are not within reach of an average household in today’s world.

So, the hotels are losing customers to competition inside and outside the industry.

In essence, there’s a limited demographic in the hotel industry that can market its services and products.

Although there are affordable hotels out there, they usually offer lower standards of services – and maintenance.

Also, the setup expenses of hotels are huge. It takes a lot of effort and money to build up a hotel and then run and manage the same.

It can take years to get to the profit zone for high-end hotels. Huge investment and operational costs are key weaknesses of the hotel industry.

2. Unfavourable Tax Rates

In some countries, the hotel industry is subjected to an unfair tax structure which, in turn, takes the cost of offering hospitality services to a whole new high.

Get this: some rooms attract specific taxes which are charged per night spent there.

As if that isn’t worse enough, some hotels also receive higher sales taxes when pitted against other sub-industries such as bed and breakfasts.

3. Seasonality of the Hotel Business and dependence on Tourism

The hotel industry is a part of the bigger travel and hospitality industry.

This dependence makes the hotel industry vulnerable.

The business of hotels would depend on the influx of tourists, holidays and seasons. This seasonality and dependence on tourism is a key weakness of the hotel industry.

Predicting high and low seasons in advance is quite difficult. Keep a macro perspective, this gets even more difficult.

As an example, the COVID-19 pandemic demolished the tourism sector in 2020.

The hotel industry is directly dependent on travel. Due to the pandemic, it had to suffer huge losses.

This is a classic example of the over-dependence of the hotel industry on external factors.

Opportunities for the Hotel Industry

The hotel industry is here to stay; there’s no question about that.

The best news is that every community has a raft of attractions and landmarks worth visiting.

What hoteliers have to do is add a little flair to them, and people from all walks of life will journey miles to partake in their beauty.

In principle, the hotel industry has an opportunity to enjoy a year-round influx of customers thanks to its modern structure.

During peak season, hotels typically take in domestic and international tourism – and local tourists during the off-season. And, this is the magical allure of the hotel industry.

The world is getting globalised, there are more booking and travelling options. Technology is providing a hand in helping the hotel industry grow.

The Future of Hospitality and the Hotel industry  is bright for sure.

1. Huge Scope for Technology

Yes, it’s a key strength of the hotel industry as the technology still can be said to be underexplored in hospitality and travel.

Doing a SWOT analysis for your hotel business around technology would open an ocean of opportunities.

Think in terms of the below when exploring technology for the benefit of your organisation.

• Utilising Artificial Intelligence in customer support (Chatbots)
• Upgrading the Property Management System
• Greater use of Automation for check-in and check-out
• Using Robotics to automate some part of the service
• Blockchain for an enhanced payment security
• Cloud technology for saving on server resources
• Augmented and Virtual Reality helps in a richer consumer experience.

And much more would be on your exploration radar while exploring opportunities for the hotel industry.

2. Millennials the new key target segment for hotels

Millennials are creating huge opportunities for the hotel industry.

They love to travel. They love technology. They care for sustainability. They love green tourism.

There is a huge crowd that has become the decision-maker for travel and lodging.

All SWOT analyses must have a section for new market segment opportunities.

Millennials should find a separate heading in the opportunity section of the analysis.

Catering to this market has a huge spillover effect on all other segments.

With their various interests and love for innovation, millennials are creating opportunities for the hotel industry in 2023 and beyond.

Threats to the hotel industry

This again is a crucial part of the SWOT analysis of the Hotel industry.

Alternative lodging like Airbnb has already posed enough threat to the hotel industry.

• Boutique Alternatives-  Cheaper and more robust hospitality services are mushrooming each day. Airbnb is the primary threat to the hotel industry, for that matter.
• Prevalent Conditions:  Civil unrest in some foreign countries can dampen the hotel industry both directly and indirectly.
• Worse-Than-Expected Economies:  The hotel industry is still reeling back from the aftermath of the world’s recession. Unfavourable interest rates and low disposable income have cut down dramatically footfall in most hotels across the world.
• Changing travel patterns:  Consumer behaviour is changing. Augmented reality and Virtual reality are giving consumers options to enjoy travel without much travelling. This can directly impact the lodging industry.
• Pandemics:  The COVID pandemic is a recent example of how pandemics can be a threat to the hotel and hospitality industry overall.

Here you go. Quick SWOT analysis of the hotel industry we love the most.

Hope this has helped you to know your hotel industry better.

Technology has a huge role to play in all four sections of the SWOT analysis of the Hotel industry but we will leave that to be covered in detail in another post.

Frequently Asked Questions (FAQs):

• How do the strengths and weaknesses of the hotel industry vary in different regions around the world, and how does this impact overall industry performance?

The strengths and weaknesses of the hotel industry can indeed vary across different regions. For instance, in tourist hotspots like the Caribbean, the abundance of natural attractions is a strength, while in urban areas like London, high real estate costs can be a weakness.

These variations impact factors like pricing strategies and target demographics, shaping the industry’s performance locally and globally.

• Can you provide specific examples of how technology, such as artificial intelligence or blockchain, is being implemented in the hotel industry to capitalize on opportunities and mitigate threats?

Technology plays a vital role in the hotel industry, offering both opportunities and threats.

Take artificial intelligence (AI) in hotels for example. Many hotels are using AI-powered chatbots for customer support, like Hilton’s Connie chatbot. This technology enhances guest experiences by providing instant assistance, thus leveraging an opportunity.

Conversely, the rise of online platforms like Airbnb poses a threat by offering alternative lodging options, impacting hotel occupancy rates.

• In what ways are hotels adapting to changing consumer behaviour, especially concerning travel patterns and preferences, to stay competitive amidst threats like alternative lodging options and economic downturns?

Hotels are adapting to changing consumer behaviour in various ways.

For instance, recognising the growing preference for sustainable travel among millennials, some hotels are implementing eco-friendly practices, such as reducing plastic usage or installing energy-efficient systems.

Additionally, hotels are embracing technology and using technology-based hospitality innovations like augmented reality (AR) and virtual reality (VR) to offer immersive experiences, attracting tech-savvy guests who seek unique and innovative stays.

• Are there any historical instances or case studies mentioned that illustrate how the hotel industry has overcome threats or leveraged opportunities in the past, providing insights into future strategies?

Historical examples shed light on how the hotel industry navigates challenges and capitalizes on opportunities.

During the 2008 recession, hotels implemented cost-saving measures like reducing staff or offering promotions to maintain occupancy rates.

Similarly, in response to the COVID-19 pandemic, hotels pivoted to accommodate remote workers by offering ‘workcation’ packages, showcasing adaptability in the face of adversity. Such instances provide insights into future strategies, emphasizing resilience and innovation in the industry’s evolution.

A critical case study in Vietnam explored how a specific hotel responded to the crisis. They developed strategies to survive this troubled period. The study by Springer used marketing’s service-dominant logic and Bourdieu’s theoretical framework to analyse the findings.

The hotel’s innovative approach included offering paid quarantine services, which helped both the hotel and authorities respond effectively to the pandemic.

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Hotel SWOT Analysis: Hotel Industry SWOT Analysis 2023

A hotel SWOT analysis will help understand how the world of tourism affects our economy and how it creates a competitive space for the hotel industry. As the world is back to traveling after the pandemic a SWOT analysis hotel helps us understand how the hotel industry is doing at large. A hotel industry SWOT analysis is a large field that is responsible for a large sum of money in the form of revenue. It is responsible for contributing billions of dollars to the global economy. It is the sole reason for tourism to be as popular as it is now. There are even some chains that run their business all over the world.

For this reason, a hotel industry SWOT analysis is very important to keep one’s business strategy for this sector in check. As one would expect with an industry with a particularly enormous monetary muscle, one needs to have an obvious business technique and a hotel industry SWOT analysis helps with that.

Table of Contents

A Hotel SWOT Analysis – History of the Hotel Industry

Hotel Industry SWOT Analysis

Simply put, a SWOT Analysis is a rundown of all Strengths, Weaknesses, Opportunities, and Threats facing a particular industry or niche.

A hotel industry SWOT analysis or in some cases, the hospitality industry SWOT analysis by and large aids in conceiving a legitimate arrangement to remain ahead of the opposition. Its enchanted appeal lies in the way that it can help hoteliers worldwide to create and execute sound and powerful business systems.

• You May Also Like: Restaurant Industry SWOT Analysis

As you would expect with a hotel SWOT analysis in the travel industry has a particularly enormous monetary muscle, you need to have an obvious business technique.

Primary business strengths, weaknesses, opportunities, and threats will be the main focus of our hotel industry SWOT analysis.

Hotel SWOT Analysis Strengths

The understanding of the hotel industry SWOT analysis will result in gaining a deeper perception of the background of the hotel industry . This will also assist one to understand the depth of service in the hotel industry and to explore the hotel industry SWOT analysis further.

At first, it has to be acknowledged that the hotel industry’s strong points may alter depending on Its region. Each region has Its own merits and demerits.

First off in the hotel industry SWOT analysis, we will take an incisive look at Its general and most common strengths.

Gives a protected lodge away from home: The hotel business gives safe convenience to individuals when they are away from their homes. The industry itself brags millions of nice rooms. With an assortment of lodgings across the globe – from boutique hotels to the loftiness of worldwide name brands and everything in the middle, there’s consistently a hotel that will fit a client’s needs.

They offer everybody a spot to kick back and loosen up away from all the hurrying around of regular day-to-day existence and work. Without the hotel business, getaways and travel wouldn’t be more secure or even conceivable.

Contributes to the Local Economy:  As an industry that uses critical monetary force, the hotel industry can positively hold things over in the neighborhood economies. Sure, it’s nearby attractions that carry masses to the local area, yet the hotels are the ones that keep them there. When individuals stay in a spot, they burn through nearby administrations and goods. They will visit nearby shopping centers, eat in neighborhood eateries, and shop in neighborhood stores.

It employs a large number of people: In a hotel SWOT analysis, there is a large sector that employs a large number of workers. This industry has a large number of subsectors. So the need for new employees is never to be filled. In the future, there is a chance of ten percent for each and every people to become somehow invested in this industry. So, this industry will continue to employ a huge number of people for a very long time.

High-Profit Margin: The hotel industry needs a huge sum of capital to start the business but it is still a good investment. All because the price of labor is lower and the profits are higher. This may not be the situation for all countries. The hotel industries of Asia, North America, Africa, and the Middle East have the pleasure of cheap labor.

On the other hand, the hotel industries of Europe and America have to spend a huge amount of their earnings to pay wages. Extravagant amount of profit is the core strength for many sectors of the hotel industry. A SWOT analysis hotel shows areas where high-profit margins are major strengths.

Some of those are enlisted below:

• Luxury hotels and resorts
• Boutique Hotels
• All-Inclusive Resorts
• Casino Properties
• Spa and Lifestyle Resorts

Hotel Industry SWOT Analysis Weaknesses

This is an essential part of the hotel industry SWOT analysis. Because only after sharpening its defenses against these weaknesses, the hotel industry gains its competitive edge. Some of these weaknesses are enlisted below.

Huge setup cost and high hotel rates: It is a known fact that only a day in a high-end hotel costs a huge amount of money. These charges are so high that an average individual with an average income can never afford them. Of this, the hotels are losing valuable customers both inside and outside of the industry. So, in short, there is only a small part of society that the hotel industry can order its services. Yes, there are other hotels out there that are much more affordable but the service standard of those is much, much lower.

It also takes a large sum of money and a lot of effort to set up a hotel and maintain it. It can take years for high-end hotels to get to their target profit zone.

Large investments and operational costs are the main reason that the hotel industry is falling behind.

Troublesome Tax rates: In certain nations, the hotel industry is exposed to a baseless expense structure which, thus, takes the expense of offering cordiality administrations to an entirely different high. Get this: a few rooms pull in explicit expenses charged each night spent there. As though that isn’t awful enough, a few hotels likewise get higher deal charges when set in opposition to other sub-enterprises like bed and breakfasts. SWOT analysis hotel highlights how troublesome tax rates can be an area that hotel owners review and adapt to.

Depending on tourism and seasons: The hotel industry is a piece of the greater travel and neighborliness industry. This reliance makes the hotel industry vulnerable. The business of hotels would rely upon the flood of sightseers, occasions, and seasons. This irregularity and reliance on the tourism industry is a critical shortcoming of the hotel industry.

Predicting high and low seasons ahead of time is very troublesome. Keep a full-scale point of view, this gets significantly more difficult. As a model, the COVID-19 pandemic has just crushed the travel industry area in 2020. The hotel industry is straightforwardly subject to venture out and along these lines needed to endure gigantic losses. This is an exemplary illustration of the over-reliance of the hotel industry on outer elements.

Hotel SWOT Analysis Opportunities

Now, we take a look at all the opportunities that we can exploit in the hotel industry SWOT analysis:

Large field for Technology: In a hotel SWOT analysis, it’s a vital strength of the hotel industry as the innovation actually can be supposed to be under-explored in accommodation and travel. Doing a SWOT investigation for your hotel business around innovation would open an expanse of chances.

• Using Artificial Intelligence in client care (Chat-bots)
• Overhauling the Property Management System
• More noteworthy utilization of Automation for registration and look at
• Utilizing Robotics for programmed some piece of administration
• Block-chain for an upgraded installment security
• Cloud innovation for saving money on worker assets
• Increased Virtual Reality helps in a more extravagant customer experience.
• Also, considerably more would be on your investigation radar while investigating openings in the hotel industry.

Millennials as the new target sector: Millennials are creating new sectors for the hotel industry. Their love for travel, technology, sustainability, and green tourism acts as the sole reason for these opportunities. A large group of people is now becoming the chief of traveling and housing (during the travel). Depending on this market, a lot of other sectors can have the spilling-over effect. Like these millennials are paving new ways for the hotel industry.

Hotel SWOT Analysis Threats

This is the most important part of the hotel industry SWOT analysis.  Some of these threats are enlisted below:

Boutique Alternatives: Cheap and warm hospitality services are gradually taking over the market. Airbnb is one of them .

Prevalent Conditions: Political uneasiness in a country can easily pose a threat to the hotel industry.

Turbulent Economies: The world’s recess has had a heavy toll on the hotel industry. With low rates of disposable income and small interests, the hotel industry is finding itself in a great struggle.

Changes in Travelling: A.R. and V.R. technologies give people the choice to enjoy the pleasures of traveling without having to travel. This creates a major problem for the hotel industry.

Pandemic Disasters: Pandemics can put a heavy dent in the hotel industry’s earnings. The recent COVID serves as a good example in this case.

Hotel Industry SWOT Analysis Overview Template

Conclusion and Recommendations for the Hotel Industry

From this Hotel SWOT analysis we suggest the following recommendations will focus on improving the weaknesses or neutralizing the threats to the hotel industry. The recommendations are the following:

• Enhance Service Quality: Elevate guest satisfaction by training staff to deliver exceptional customer service, ensuring personalized experiences that set the hotel apart.
• Integrate Technology: Upgrade amenities with modern tech, like automated check-in systems and in-room controls, enhancing convenience for tech-savvy guests.
• Prioritize Sustainability: Implement eco-friendly practices such as energy-efficient lighting, waste reduction, and water conservation to appeal to environmentally conscious travelers.
• Leverage Prime Location : Promote nearby attractions and unique aspects of the location to attract guests seeking convenience and local experiences.
• Showcase Unique Amenities: Capitalize on distinctive offerings like spa services, themed dining, or recreational facilities to create a competitive advantage.
• Update Décor: Refresh interiors with contemporary designs to create a modern and comfortable ambiance that resonates with guests.
• Embrace Wellness Tourism : Create wellness-focused packages and facilities, like fitness centers and yoga classes, catering to health-conscious travelers.
• Tap into Business Events: Market event spaces and catering services to corporate clients, expanding revenue streams beyond leisure travelers.
• Offer Virtual Experiences: Provide virtual tours and interactive online booking options to cater to the digital-savvy planning preferences of travelers.
• Manage Online Reviews : Actively respond to guest feedback, addressing concerns promptly and showcasing a commitment to guest satisfaction.
• Monitor Competition: Stay updated on rival hotels’ offerings, pricing, and promotions to adjust strategies and maintain a competitive edge.
• Adapt to Economic Changes: Build financial reserves and flexible pricing models to navigate economic fluctuations without compromising service quality.
• Stay Informed on Regulations : Keep abreast of local regulations and safety standards, ensuring compliance and seamless operations.

By implementing these recommendations, the hotel can enhance its strengths, mitigate weaknesses, seize growth opportunities, and effectively address threats. Through continuous improvement, a focus on guest satisfaction, and strategic adaptations, the hotel can secure its position in the dynamic hospitality market.

FAQs for Hotel Industry SWOT Analysis

How can a hotel improve its online presence?

Invest in a user-friendly website, engage actively on social media, and encourage guests to leave reviews.

How can the hotel address sustainability concerns?

Implement energy-saving initiatives, reduce single-use plastics, and promote eco-friendly practices throughout the property.

The hotel industry plays a very important part in our economy. Even though it’s recently suffering from the world’s recess, it still needs more consumers. This hotel industry SWOT analysis will help the hotel industry to take a step back and analyze its business. This will help them recover from their weaknesses and neutralize the threats while strengthening their strength and allowing them to make good use of the available opportunities.

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Hotel SWOT Analysis

Swot analysis maker.

Are you ready to take your hotel to the next level? Everybody wants to, but not everyone knows how. Just like the act of self-improvement, it takes a certain awareness to raise any business towards a higher standard. Thankfully, there is an easy way to learn how. A hotel SWOT analysis is what many need during these crucial times. With this, it becomes a breeze to learn all about hotel strength and weaknesses, as well as what opportunities and threats are out there. Scroll on to learn more and to get your own hotel SWOT analysis template from our list.

Hotel SWOT Analysis Template

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History of the SWOT Analysis

We credit this sophisticated strategy to Mr. Albert Humphrey who, in the 1960s and the 1970s, pioneered a research team in Stanford University utilizing the data they have gathered from well-established companies.

The purpose of their research was to understand why a lot of corporate planning fail. As a result, the team of Mr. Humphrey was able to discover a series of critical areas that a company can use to understand the different aspects of the business. You may also see how to prepare SWOT analysis for business .

This concept was called SOFT which stands for “What is good in the present is Satisfactory, good in the future is an Opportunity; bad in the present is a Fault and bad in the future is a Threat.” It wasn’t until 1964 when Urick and Orr represented Humphrey in a conference in Zurich that they changed the F in Soft to W, changing the name into SWOT. You may also like detailed SWOT analysis examples .

This has stuck ever since and although the concept is credited to the researchers in Stanford, the name is regarded as Urick and Orr’s making.

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SWOT Analysis of Romanian Seaside Hotel

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Downtown Sarasota Hotel SWOT Analysis

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Hotel SWOT Analysis and Planning Report

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What Is a Hotel SWOT Analysis?

Surely you’ve heard of the Marriott and the Hilton. Those are two of the most famous hotel franchises in the world. Any of their competitors would die to get their hands on a Marriott hotel SWOT analysis or a Hilton hotel SWOT analysis. Basically, this is what companies come up with if they want to get a closer look at where they stand. They will look up where they are doing well (strength), where they are failing (weaknesses), what opportunities they have at the present, and what poses a threat to them.

Tips for Developing Your Own Hotel SWOT Analysis

Those in charge of their own hotels will want to know how to develop their own analysis. Fret not, for the endeavor does not take too long and it can be quite simple. You can even create a SWOT analysis hotel industry document afterward if you really want to go in-depth. Having said all that, let’s take a look at what you can do to make your experience much easier:

Tip 1: Make Use of a Template

You’ve seen our list above, right? There are clearly many examples of what a hotel SWOT analysis PDF version or a hotel SWOT analysis template Word looks like. The use of analysis templates is really straight forward. Simply make edits to it and proceed with the important parts. In doing so, you save yourself even more time.

Tip 2: Be Honest

Even though this document is not likely to spread throughout the entire hotel staff, it can’t always be so easy to just write what your strengths and weaknesses are. Yet that’s exactly what this endeavor calls for. Don’t be shy or stay in denial about weaknesses that you aren’t proud of. Acknowledge them because they can still be used to help you rise to the top of the industry as long as you know how.

Tip 3: Do Your Research

Looking at opportunities should not be a quick look at what’s in front of you. This should be a broad look that involves the entire hotel industry as a whole. Do not hesitate to research on what the present trends are. Ask other professionals for their opinion. Perhaps you can also ask your customers through the use of surveys . Be as broad as you can and you will find many opportunities that you probably never even expected in the first place.

Tip 4: Be Thorough with Competitors

Your competition isn’t just limited to the ones directly threatening your business. You never know which indirect threat might catch you when you’re vulnerable. Just like with the opportunities, be vigilant and don’t just look at what’s in front of you. Be thorough with what people are doing and what they aren’t doing. Maybe your answers will lie somewhere in between.

How much do hotels make annually on average?

There is an estimate that the yearly revenue of hotel chain owners is somewhere between $40,000 to $60,000.

What are some examples of the most famous hotels in the world?

The first example that comes to mind is the Burj Al Arab hotel in Dubai. Then you’ve got the Fogo Island Inn, the Rancho Valencia Resort , and the aforementioned Marriotts and Hiltons.

What are the advantages and disadvantages of a SWOT analysis?

The main advantage of a SWOT analysis is that it often addresses many business issues, ranging from managerial, operational, to financial . However, there are those who believe that the issues can also be quite subjective, which makes it far less attractive to others.

Managing a hotel business is difficult. Making sure it keeps running is even harder. Conducting a hotel SWOT analysis makes managerial decision-making just a little bit easier. This is especially true for big businesses in big industries. More often than not, managers and owners will need a sidekick. Why would you hire one if you can create one instead? Look through the many aspects of your business through SWOT analysis and apply what you’ve learned wisely today!

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The Ultimate Hotel SWOT Analysis in 7 Simple Steps

A SWOT analysis is a classic tool used for strategic planning and decision making. SWOT stands for strengths, weaknesses, opportunities, and threats. A SWOT diagram analyses a project or business venture by focusing on each of these factors. As a result, SWOT diagrams can be especially useful when trying to decide whether or not to embark on a certain venture or strategy by visualising the pros and cons. In the  hospitality industry , this tool is used for everything from software purchasing to refurbishment and adoption of new in-room technologies.

The key benefit of this type of analysis is the opportunity it gives you to plan ahead and approach problems proactively. Rather than buying software as a result of negative reviews, declining sales, or turnover of key staff, you can consider your options carefully and decide on actions before problems arise.

A SWOT analysis can be as simple or as complex as your hotel requires, from a back-of-the-napkin sketch with bullet points all the way up to a formal report. The key is that you take a look at the four main areas – strengths, weaknesses, opportunities, and threats – and see how they stack up for the proposed project. Here we’ll take a look at the seven simple steps you need to take to create your own powerful SWOT analysis.

Discover the 7 simple steps for a hotel SWOT analysis:

1. determine your hotel’s objectives..

SWOT analysis works well when you’re considering a change and need to know if it’s worth the time and money required. In the hotel industry, SWOT analysis can be used for large strategic initiatives like opening a new property, considering refurbishment, or rebranding. It can also be used for smaller decisions that still have an important strategic impact, such as switching your  CRM software , adopting  new in-room technologies , or purchasing  modular furniture  for your event space.

Think about key initiatives, projects, or purchases that your property is considering in the next year. A SWOT analysis can help you brainstorm the pros and cons of these actions and give your team a good idea of whether to move forward with the proposed initiative.

To clarify which section an idea belongs to, it may be useful to think of strengths and weaknesses as internal factors – that is, to do with the organisation, its assets, processes, and people. Think of opportunities and threats as external factors, arising from your market, your competition, and the wider economy.

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2. Critically examine your metrics and results.

Before you begin mapping out your strengths, weaknesses, opportunities, and threats, you need to gather all of the information about your hotel and the proposed initiatives that you can. What is the status quo? Metrics and Key Performance Indicators (KPIs) are an important part of this process, as they give you hard data you can use and compare to other properties, brands, or similar initiatives. You can find  reports  containing many of these metrics in your CRM and PMS systems.

Here are a few metrics you may want to include in your analysis:

• Revenue per Available Room (RevPAR)
• Average Daily Rate
• % Occupancy
• EBITDA margin
• % Direct bookings
• Average group size
• Event activity
• Sales cycle length (by segment)
• Website traffic
• Online reviews and feedback

3. Map your hotel’s strengths.

This refers to the positive traits, both tangible and intangible, that are present in your hotel. These are internal factors that are within your control. Consider these factors as advantages that your hotel has at its disposal. Which metrics have you identified that are better than average, or better than your competitors’? What are the things that your hotel does well? What do customers say about their interactions with you?

Strengths can include tangible benefits such as intellectual property, proprietary software, and capital. But don’t forget to include intangible strengths in your analysis. Maybe your front desk employees have a higher level of training and professionalism, or your  business centre provides more modern value , or your food and beverage is significantly better than the competition’s. Use your own knowledge of the property, as well as staff and guest feedback, to map and include your intangible strengths alongside the tangible ones.

Remember, any aspect of your organisation is only a strength if it brings you a clear advantage. For example, if all of your competitors provide fast check-in and free wi-fi, then this is not a strength in your market: it’s probably a necessity.

4. Consider your property’s weaknesses.

Weaknesses refer to elements that inhibit growth or optimal performance, or things that your hotel lacks. These are internal factors that are within your property’s control. Understanding your weaknesses involves some critical self-evaluation. A SWOT analysis will only be valuable if you gather all the information you need. So, it’s best to be realistic now and face any unpleasant truths as soon as possible.

Common weaknesses for hotels include budget limitations, lack of in-room technology, poor online reviews, lacking certain facilities, or an  outdated website . Take a hard look at what your competitors do better than you, and areas that guests have flagged in negative feedback. When you lose business to the competition, what factors motivate that loss?

Weaknesses can also include areas where you have a lack of resources, time, or personnel. What parts of your sales process are getting short shrift? What operational weaknesses exist because of staffing issues? In what areas are your customer segments or unique selling proposition unclear or vague? What are your customers’ pain points? All of these places are helpful to look at as you consider your weaknesses.

5. Look for external opportunities for your SWOT.

Opportunities are openings or chances for something positive to happen, as long as you can identify and take advantage of them. These are usually external factors that arise from situations or trends outside your organisation, and require an eye towards what might happen in the future. They might show up as developments in the market you serve, or in the technology you use. Being able to spot and exploit opportunities can make a huge difference to your hotel’s ability to compete and take the lead in your market.

See what you can spot immediately. These don’t need to be game-changers: even small advantages can increase your property’s competitiveness. What interesting market trends are you aware of, large or small, which could have an impact? How are  group business trends  such as personalisation, changing customer segments,  bleisure travel , the  desire for more sustainable hotels , and smart devices impacting your market? What do you think the next big thing will be?

You should also watch out for changes in government policy related to the industry and your location. Changes in social patterns, population profiles, and lifestyles can all throw up interesting opportunities for you to take a look at.

A FEW HELPFUL TOOLS FOR IDENTIFYING OPPORTUNITIES INCLUDE:

• Subscribing to  hotel industry blogs
• Setting up  Google Alerts  for hotel-related keywords such as “hotel technology” and “group business”
• Searching Google News for the latest relevant “hotel” stories
• Subscribing to trends newsletters such as  Cassandra Daily
• View your competitor’s websites and reviews on sites such as  Yelp  and  Facebook

Some common opportunities in the hotel industry would be things you could do to  increase bookings , improve guest satisfaction scores, or boost your profits. Research current market trends and look to guest reviews for ideas of where you can open up new streams of revenue or reach new markets.

6. Be aware of external threats.

Threats include anything that can negatively affect your hotel externally, such as OTA changes, shifts in market requirements, or a  shortage of recruits . It’s vital to anticipate threats and to take action against them before you become victim to stagnation, poor feedback, or lost business.

Think about the obstacles you face in marketing and selling to groups and individuals. You may notice that quality standards or amenities in your category are changing and that you’ll need to change your offering to stay in the lead or catch up to competitors. Evolving technology is an ever-present threat, as well as an opportunity!

Always consider what your competitors are doing and whether you should be changing your organisation’s emphasis to meet the challenge. But remember that what they’re doing might not be the right thing for you to do and avoid copying them without knowing how it will improve your position. Consider your value proposition, brand, and  customer segments  to make sure that threats really apply to you and your market.

Be sure to explore whether your hotel is especially exposed to external challenges. Do you have bad debt or cash-flow problems, for example, that could make you vulnerable to even small changes in your market? This is the kind of threat that can seriously damage your business, so be alert.

7. Take the next steps!

A SWOT analysis won’t be worth the paper it’s printed on if it doesn’t lead to discussion, evaluation, and eventually action. Transfer your elements into a grid-like matrix with four quadrants, one for each category. This format offers a clear snapshot of where you can adjust, invest, and play to your strengths.

Now that you’ve mapped out the strengths, weaknesses, opportunities, and threats associated with a given initiative, you need to determine how things stack up. Are there more positives than negatives for undertaking the project? Will it be worth the investment of time, money, and human resources? Can you mitigate any of the risks you have identified in the process? In what ways will you capitalise on the opportunities available to you?

Only you can determine whether your SWOT analysis is pointing you towards the proposed initiative. But hopefully, the discussions and research that helped you create the framework will point you in the right direction.

Act on your hotel SWOT analysis:

With the tips above, you can create a SWOT analysis for your hotel and identify the initiatives that best align with your strategic goals.

Did all signs point to yes for increasing utilisation of your small event space? Take a look at our  big ideas for small spaces  here. And see new ways to grow with some  essential insights to drive more group business .

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Cvent is a leading meetings, events, and hospitality technology provider with more than 4,500 employees and nearly 21,000 customers worldwide.

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SWOT analysis of hotel industry

• Word count: 1046
• Category: Economics Hotel Industry Swot Analysis

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SWOT analysis of hotel industry in this regard can provide a thorough insight to whether or not the industry is contributing towards the achievement of its goals. For now, let’s consider the hotel industry in India, which is one of the fastest growing in the world. Strengths

The first step to a SWOT analysis of hotel industry in India will be identifying its strengths. There are more than 1000 classified hotels with a room availability of around 97,000 rooms which can easily cope with the demand of tourists. Furthermore, there are also a number of international names in the market which meet the needs of international tourists on their visit to India. In addition, there are many tourist attractions and the cost of labor is low in comparison with the rest of the world, thus, providing better margins for hotel owners and higher growth potential in the industry. Weaknesses

Next in line is assessing the weaknesses. One major restraint to the hotel industry of India is the cost of land, which is as high as 50% of the total project cost, against a low 15% abroad. The country also has a higher tax structure as compared to other countries which inflates the hotel expense a great deal. Furthermore, the services offered by some hotels are limited and not comparable to world standards. Opportunities

The third strategic element to a SWOT analysis of hotel industry in India is the opportunities. The country boasts a number of attractions and has unmatchable diverse topography making it an ideal destination for tourists. As a result, the number of inbound tourists is expected to increase at a quick rate, further pushing the demand for hotels. Additionally, the demand for both national and inbound tourists can easily be managed as the peak season. For international tourists, arrival is between September and March, while most national tourists prefer to wait until school holidays, which are during the summer months. Threats

Where there are opportunities, you will also find threats. Several hotels in India are being replaced by guesthouses, thus, adversely affecting the hotel industry. Political unrest in the country also plays its part in reducing tourist traffic and consequently affects business of the hospitality industry. The country’s economic condition has a direct impact on the earnings of hotels. As a result, the staff might not be trained well enough to meet international standards. So, using this SWOT example for a hotel industry, you can conduct your own if you are planning to enter the hospitality industry or looking to further expand your hotel business.

What is PEST Analysis? PEST is an acronym for Political, Economic, Social and Technological. This analysis is used to assess these four external factors in relation to your business situation. Basically, a PEST analysis helps you determine how these factors will affect the performance and activities of your business in the long-term. It is often used in collaboration with other analytical business tools like the SWOT analysis and Porter’s Five Forces to give a clear understanding of a situation and related internal and external factors. Understanding the PEST Factors

Before you jump ahead and start using this analysis, you should understand what each of these factors in this analysis signifies. Political – Here government regulations and legal factors are assessed in terms of their ability to affect the business environment and trade markets. The main issues addressed in this section include political stability, tax guidelines, trade regulations, safety regulations, and employment laws. Political What are the key political drivers of relevance?

Worldwide, European and Government directives, funding council policies, national and local organisations’ requirements, institutional policy Economic – Through this factor, businesses examine the economic issues that are bound to have an impact on the company. This would include factors like inflation, interest rates, economic growth, the unemployment rate and policies, and the business cycle followed in the country. Economic What are the important economic factors?

Funding mechanisms and streams, business and enterprise directives, internal funding models, budgetary restrictions, income generation targets Social – With the social factor, a business can analyze the socio-economic environment of its market via elements like customer demographics, cultural limitations, lifestyle attitude, and education. With these, a business can understand how consumer needs are shaped and what brings them to the market for a purchase. Social What are the main societal and cultural aspects?

Societal attitudes to education, particularly in relation to government directives and employment opportunities. Also general lifestyle changes, changes in populations, distributions and demographics and the impact of different mixes of cultures Technological – How technology can either positively or negatively impact the introduction of a product or service into a marketplace is assessed here. These factors include technological advancements, lifecycle of technologies, the role of the Internet, and the spending on technology research by the government. Technological What are current technology imperatives, changes and innovations? Major current and emerging technologies of relevance for teaching, research or administration Legal Current and impending legislation affecting the role

European and national proposed and passed legislation Environmental What are the environmental considerations, locally and further afield? Local, national and international environmental impacts, outcomes of political and social factors

PESTLE Analysis: An extension of PEST Analysis What is PESTLE Analysis? PESTEL analysis is an extension of PEST that is used to assess two additional macroeconomic factors. These factors are the Legal and Environment conditions that can have an impact on the company. Examples of PESTLE analysis are similar to those of a PEST analysis, but they would include the following

PESTLE Analysis: An extension of PEST Analysis What is PESTLE Analysis? PESTEL analysis is an extension of PEST that is used to assess two additional macroeconomic factors. These factors are the Legal and Environment conditions that can have an impact on the company. Examples of PESTLE analysis are similar to those of a PEST analysis, but they would include the following: Environment:

Changes in weather and climate Laws regarding pollution and recycling Waste management Use of green or eco-friendly products and practices Legal: Discrimination laws Health and safety laws Consumer protection laws Copyright and patent laws So, if you want to assess a business situation in a comprehensive way, a PEST analysis is a definite must that can help you understand the macroeconomic business environment.

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Hotel Industry SWOT Analysis 2024 With Key Insights

Whether you’re a tourist who loves traveling, a businessman meeting or dealing in many countries or going on a vacation with family or friends, you need a hotel. Even if you’re traveling in another state, you need to stay in one place and need a roof over your head.

Back in the day, the idea of a hotel was simple, roof and food, and now the services have extended to a long list and more. The industry has been making a huge profit by adapting to new tech and providing better services with skilled staff. But, inconsiderable tax, weather, political and other issues have been disrupting the overall course of the hotel industry, which we will get to know in this hotel industry swot analysis.

Table of Contents

Hotel Industry Overview

We can track down the history of the hotel industry back thousands of years when people could rent a small space and buy some food. The primary need was a roof and food. But, with time and modernization, the entire history of the hotel industry has changed a lot.

The modern hotel industry started in the 1700 century, and in the 1900 century, the industry boomed. And in 2022, the industry is worth over $4,390 B. Once, the hotel’s primary customer was the upper classes, and now no matter who you are, anyone can get the service.

The total number of employees in the hotel industry is more than 15 M, serving millions of people. Every country has a massive opportunity for the hotel industry, as tourism and business exist.

Competitors in Hotel Industry Marriott | Hilton | Hyatt | InterContinental | Izmailovo | MGM Grand & Signature | First World Hotel

Did You Know? There is a hotel named Balea Lake Ice Hotel in Romania, which gets built every year. Visitors can only go there using a single-line cable. It’s not just a hotel; it also has other features, such as a snow bar and restaurant.

Strengths – Hotel Industry SWOT Analysis

Stable Profit Margin: If we go ten years back, in 2014, the profit margin for the hotel industry was over 48% on average, and after five years, in 2019, the margin rose to over 85%. Even though the pandemic slashed the industry, the hotel industry recovered again and returned with over 57% profit margin in 2022. As we can see, the margin always stayed stabled and helped keep a healthy cash flow.

Home Environment: People choose the hotel because of what they offer: an environment just like home and even more. That’s why hotels have become an inseparable part of the tourism industry . Starting with the basic offerings to luxury, depending on the needs, the hotels can deliver anything to the consumers.

Boost Local Economy: Hotels are great for boosting the local economy, and the perfect example is Maldives’ dependency on the hotel and tourism industry. And, just like these, there are many other countries whose economies are boosted by these industries. Even some countries’ primary economy is based on the hotel and tourism industry.

Massive Employment: The stats show that the total number of hotel employees in the hotel industry now stands at 15.11 M, with a 23% growth rate. Even though the hotels had to let go of a big chunk of their employees during the pandemic, the industry got back on track with more employment opportunities.

Weaknesses – Hotel Industry SWOT Analysis

High Fixed Cost: The hotel industry itself is costly. The average cost for a hotel setup requires around $22,000,000, which is very high compared to the industries. And that’s just the minimum cost and only includes the infrastructure. Besides, the employee and maintenance cost alone is very high, which is a weakness and sets a high barrier for the owners.

High Tax Rate: The hotel tax rate varies depending on the country and even city or state. But, compared to the other industries, the average tax rate is high. In the USA, the tax rate starts as low as 2% to 18%, depending on the state, and the average rate is 8.25%. Even though many countries have easy laws and lower hotel industry taxes, the rate is still high.

Seasonality: The revenue of the hotels primarily depends on seasonality. Hotels are highly dependent on tourists and mainly built for them, so the hotel business only runs during the holidays, vacations and other seasons. Besides, as financial stability also depends on tourism, that also matters.

Other Industry Affects: Many industries can, directly and indirectly, affect the hotel industry’s overall situation, such as airline, tourism, etc. As for the other factors, a country’s people, politics, climate, and natural disasters can also highly impact the hotel industry. As a result, this industry’s risk and effects are too high.

Opportunities – Hotel Industry SWOT Analysis

Dynamic Pricing Strategies: Although many hotels have set their pricing dynamically, most are still stuck with old-school methods. They must set the pricing strategy based on demand in this modern age. As the business relies on the season and many other factors, they can also introduce loyalty programs. Besides, offering discounts and different prices in the off-season might also boost the revenue.

New Target Groups: The world has changed a lot, and so it the target market. As most people in this world are aged between 13 to 25, this is the target group the hotel industry should focus on in the upcoming days. Besides, targeting 25 to 35 years old is also another group. These people love to travel and spend money.

Strategic Collaboration: There are many opportunities for hotel companies to do strategic partnerships and collaborations with related industries, such as airlines , other transportation industries, tourism, digital financial services, etc. People want easy and smooth services, combining these industries can make that happen.

Unique Offerings: People want more and more and something new and trendy with time. The hotel industry should start finding the customers’ core needs and what they want and come up with unique offerings. As mentioned before, collaborating with other industries can help bring new offerings and attract new target groups.

Tech Adaptation: Integrating new tech with the overall industry can be revolutionizing. There are many scoops, such as AI, inventory management, automated services, smooth and digital transactions, and other features that can improve customer experience and make the work more effective and efficient.

Threats – Hotel Industry SWOT Analysis

Online Rental Companies: The hotel industry has changed in the last few years because of online rental companies like Airbnb. Airbnb alone has disrupted, affected and changed the course of the hotel industry. Because of that, there are now more new tech companies and new ideas that can disrupt more and decrease the market share.

Political Instability: In the last decades, there have been many political instabilities in many countries, and because of that, tourist has feared going to those countries, and the tourism and hotel industry has faced an enormous drop, and so has the hotel industry. And many countries’ hotel industry has been completely destroyed because of that.

Weather Issues: Weather has always been an issue for the hotel industry, and it can affect in a big way if there is any kind of inconvenience or untimely climate or weather change, then it will affect the tourism and the hotel industry. As a result, the regular seasonality and demand chain is disrupted.

Recession: During the 2008 recession, the occupancy rate in the hotel significantly dropped by 60% in the USA. As the economic downturn affected the tourism industry, the rate was even more downward. The hotel industry might face losses as it is a strong possibility of another recession in 2023-24 years.

[Bonus Infographic] SWOT Analysis of Hotel Industry

Recommendations for Hotel Industry

Even with a huge profit margin and skilled employees, the hotel industry has been facing some serious issues now. Here are some recommendations on how they can handle it better.

• They should work on setting better pricing strategies that might be flexible and easier for many customers.
• Strategic collaboration with other industries and companies can bring new offerings and services.
• Adapting new techs can be effective and efficient for the customers and the entire industry to serve better services.
• They should consider the political and economic factors to handle the situations in a better way.

Frequently Asked Questions (FAQs)

What are the 4 main categories of the hospitality industry.

The 4 main categories of the hospitality industry are food and beverage, accommodation, travel and tourism and entertainment and recreation.

Who is the King of the Hotel Industry?

César Ritz is the king of the hotel industry.

What are the Latest Trends in The Hotel Industry?

The latest trends in the hotel industry are mobile check-in, digital payments, and digital and contactless services.

Final Words on Hotel Industry SWOT Analysis

The hotel industry has been in this modern world before the world has become modern. Catering to billions of people in its history has boosted the local economy and made the service more effective so that customers feel at home. It was possible because of the significant number of employees and high-profit margin. But, in this modern world, there are problems, such as Airbnb and other economic and political issues. And besides all that, the industry is still going strong.

• Hotels & Tourism Industry Profitability . (n.d.). CSIMarket.
• Maldives Overview: Development news, research, data . (2022, September 28). World Bank.
• United States: Sales Tax . (n.d.). Tripadvisor.
• Cabrito, B., Antunes, M. V., Abranja, N., Justino, M. D. R. T. F., & Quirós, J. T. (2019). The relevance of tourism in financial sustainability of hotels . European Research on Management and Business Economics, 25(3), 165–174.
• Millili, D. (2023, January 18). What Hotels Can Learn About Pricing Optimization from Other Industries . Hospitality Net.
• Proportion of selected age groups of world population and in regions in 2022 . (2022, October 20). Statista.
• Roach, J. C. (2018, May). How Airbnb has affected the hotel industry . U.S. Bureau of Labor Statistics.
• Sheel, A. (2008). U.S. Recession and Its Impact on the U.S. Tourism, Hotel, and Restaurant Business: A Brief Review . The Journal of Hospitality Financial Management, 16(2), Vii–Viii.

About The Author

Ahsanul Hauqe

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Business Management & Marketing

Swot analysis of hospitality industry .

SWOT analysis of hospitality industry. The word hospitality outlines the relationship and link between hosts and guests. How the host receives and treats the guests, visitors, and strangers with open arms, warm hearts, and goodwill gestures. However, the hospitality industry plays a key role in the growth of a country’s economy.

Some of the key businesses that falls under the category of hospitality industry are as follows;

• Bars and clubs
• Hotels and restaurants
• Travel agency
• Theme parks
• Event planning and event management
• Food, drink, and lodging services

According to an estimate, the market worth and revenue of the hotel and motel hospitality industry in the US reached approximately 177.6 billion dollars by the end of 2022. The UK has got roundabout 207,000 hospitality venues, out of which 25% of them belong to fast-food outlets.

Some of the world’s leading brands in the hospitality industry are as follows;

• Holidays Inn
• Hilton Hotels and Resorts

Today, we’ll discuss the swot analysis of hospitality industry. It is going to focus on the internal strengths and weaknesses; external opportunities and threats to the hospitality Industry. Here’s the swot analysis of hospitality industry as follows;

Strengths of Hospitality Industry 

Some of the main strengths in the swot analysis of hospitality industry are as follows;

Cultural Diversity

The focus of the hospitality and tourism industry is to promote socio-cultural diversity. It invites people from across the world to visit your country and provides them with a comfortable environment to live and stay there. However, it creates an environment of harmony and brings people together to learn things from each other regardless of their cultural differences.

Bridges Supply-Demand Gap

A country has got a supply of travel and transport, hotel and restaurant, and entertainment. Now, it needs a demand of tourists and visitors to bridge the gap between supply and demand. However, the hospitality culture and industry create a favorable environment for supply and demand.

Government Support

The good thing about the hospitality industry is that it has got support from the government. The government and political institutions facilitate the tourism and hospitality sector because they create job opportunities, and attract revenue into the country.

Market Growth

The tourism and hospitality market has got a strong potential for growth and profitability. Various businesses and companies like hotels, restaurants, entertainment, clubs, travel and transport, and other industries are collaborating collectively towards its growth and progress.

Weaknesses of Hospitality Industry 

Some of the main weaknesses in the swot analysis of hospitality industry are as follows;

Poor Infrastructure

The main impediments to the growth and progress of the hospitality sector are poor and lack of infrastructure. Tourists won’t visit beautiful places if a country doesn’t have proper roads, hotels, restaurants, shops, and markets. All of these separate fields and sector build up the country’s infrastructure and attracts tourists and visitors.

Limited Implementation

When it comes to rightly implementing the infrastructure and various other factors in the hospitality sector; then it is very difficult to get everything right at one time. It is because it depends on a lot of independent variables, and streamlining all of them is highly difficult.

Influenced by Political Environment

An unstable political environment, riots, roadblocks, protests, and strikes may jeopardize the growth and progress of the hospitality sector. People don’t like to visit a country that has got unstable and violent environment, because it raises a question about their safety and security.

Opportunities Available to Hospitality Industry 

Some of the main available opportunities in the swot analysis of hospitality industry are as follows;

High Income

Various industries in the hospitality sector have got great growth potential with high revenue and profitability. Most importantly, it creates various job opportunities and brings everyone on board; various people and parties would benefit from it. That’s why it is significant for businesses and organizations to participate in it and exploit the potential opportunities.

Better Experience

The hospitality sector has got great room for innovation and creativity in terms of providing unique experiences to customers, visitors, and tourists. Different indigenous businesses and craftsmen have got expertise in their own experience relevant to the environment, and they have got the capability to provide unique customer experiences.

Threats to Hospitality Industry 

Some of the main potential threats in the swot analysis of hospitality industry are as follows;

Fluctuating Market Conditions

The hospitality sector has got fluctuating demands; it would go up in the summer and holidays season and down in the off-season. It is not a type of business that would run smoothly throughout the year. It has got a lot of ups and downs; various environmental factors impact them.

High Competition

The hospitality sector has become highly competitive recently because everyone wants to take advantage of the growing opportunities. It is good for tourists and visitors because they receive a lot of variety, but it is not good for businesses.

Economic Recession

The high unemployment rate, inflation, high-interest rate and savings, and low purchasing power of people would limit the outdoor activities of people. In such cases, they would spend time in their hometowns, rather than going abroad and visiting the world.

Security Threats

Nothing is more important and significant than the security and safety of people. If a country has a bad reputation in terms of safety and security, then people and tourists won’t visit the country or its places due to security threats.

Conclusion: Hospitality Industry SWOT Analysis Example Company

After an in-depth study of the swot analysis of hospitality industry; we have realized that the hospitality industry has got a lot of growth potential. If you are learning about the hospitality business swot analysis example company, then you should keep in mind the abovementioned internal and external factors impacting hospitality companies.

Ahsan Ali Shaw is an accomplished Business Writer, Analyst, and Public Speaker. Other than that, he’s a fun loving person.

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✅ Hospitality SWOT Analysis

Comprehensive guide for hotel, restaurant, and hospitality professionals..

It was a bustling night at the restaurant, but something was amiss. The customers seemed to be waiting longer than usual, and some even left without placing an order. The manager was at a loss. What was causing the delay? How could they improve their service?

Meanwhile, a small boutique hotel across town needed help to keep up with its more significant, established competitors. But, despite their best efforts, they lost business and failed to attract new customers. The hotel owner knew they needed a change but needed to know where to start.

In both cases, a SWOT analysis could have made all the difference. This comprehensive tool provides an overview of your current operations and helps you identify potential areas of improvement. 

You can gain a competitive edge by conducting a SWOT analysis. 

This guide will show you what a SWOT analysis is, why it's essential, and how to conduct one for your hospitality business.

What is a SWOT Analysis?

Why is a SWOT analysis important?

How to Conduct a SWOT Analysis

SWOT Analysis Workshop Plan & Agenda 

Strengths List 

Weaknesses List 

Opportunities List 

Threats List 

Creating an Action Plan

Each SWOT List contains suggestions for Brand, Financial, Products & Services, Company Culture, Customers, Competitors, Digital, Marketing, and Resources & Capabilities.

What is a SWOT Analysis? 

A SWOT analysis identifies strengths, weaknesses, opportunities, and threats. 

By examining these four areas, you can better understand the internal and external factors that could influence your success; they can be tangible or intangible. 

Strengths  are your business' positive characteristics.   Strengths   include a solid customer base, a unique product offering, or a positive brand image. 

Weaknesses  are the areas of your business that can be improved. Some weaknesses could include outdated technology, limited resources, or a lack of customer data.

Opportunities  are external factors that could help your business succeed. This could include new markets, emerging technologies, or changes in consumer behaviour.

Threats  are external factors that could negatively affect your business. Examples of threats could include a new competitor in the market, regulation changes, or an economic downturn.

Why is a SWOT Analysis important? 

A SWOT analysis is essential to any hospitality business, providing a comprehensive overview of strengths and weaknesses.

Future strategies can also be shaped based on identifying opportunities and threats. 

For example, if a hotel's strength is its location, then the management can look at ways to capitalise on this strength and develop strategies to attract more customers. 

If a restaurant lacks customer service, strategies can be implemented to improve customer service and increase customer satisfaction.

A SWOT analysis is also helpful for staying ahead of the competition. By understanding the strengths and weaknesses of the competition, hospitality professionals can develop strategies to outsmart them.

🏨 SWOT Analysis Example: Hotel 

Strengths  for a hotel include the quality of customer service, the variety of amenities offered, the hotel's overall reputation.

If a hotel has an excellent reputation for its customer service, that could be a considerable advantage over competitors in the area. In addition, a hotel with various amenities, such as a spa, fitness centre, and restaurant, can attract more customers. 

Weaknesses  for a hotel could include outdated technology, limited staff, or a lack of marketing efforts. For example, if a hotel needs to catch up in technology, it may need help to offer guests the same services as other hotels in the area. Additionally, limited staff may make it challenging to provide excellent customer service, while a lack of marketing efforts could prevent the hotel from attracting new customers. 

Opportunities , a hotel can capitalise on introducing new amenities or services. For example, a hotel could add on-site spa or room services to attract more guests. 

Threats  for a hotel may include the emergence of a new competitor in the area. If a new hotel moves in, it could hurt the existing hotel's occupancy rates and put it at a disadvantage. 

Action Plan 

Create social media campaigns focused on feedback to attract new customers

Arrange marketing training for front desk staff

Promote new spa services 

Monitor local competitors

🍔 SWOT Analysis Example: Restaurant 

Strengths  of a restaurant may include an experienced chef, an excellent reputation, and a unique atmosphere. Identifying the unique characteristics that make your restaurant stand out from the competition is essential. 

Weaknesses  for a restaurant may include limited seating, outdated technology, or a lack of marketing efforts. Identifying areas of improvement allows the business to make changes that will ultimately benefit the bottom line. 

Opportunities  for a restaurant may include introducing new menu items or services. In addition, keeping up with the latest trends in the industry is a great way to stay ahead of the competition and draw in new customers. 

Threats  for a restaurant may include the emergence of a new competitor in the area. Therefore, understanding your competition is vital to stay one step ahead. 

Create social media campaigns focused on the chef's signature dish

Purchase new outdoor seating 

Collaborate with local ingredients suppliers to introduce new menu items

Set up social listening to monitor brand sentiment within a 5-mile radius of the restaurant to monitor brand sentiments

How To Conduct a SWOT Analysis 

When conducting a SWOT analysis, the right team must be in place to ensure the most comprehensive and accurate results. 

This team should include a variety of stakeholders from all levels of the organisation, including executive leadership, middle managers, and frontline staff. This will provide a well-rounded view of the organisation and help to identify strengths and weaknesses that may have yet to be considered. 

The frequency of a SWOT analysis will depend on the size and complexity of the organisation and the purpose of the analysis. 

A SWOT analysis can be conducted for several reasons: 

To create an effective and efficient business strategy

To evaluate the performance of the hotel's marketing and sales efforts 

Identifying potential expansion or diversification opportunities 

To launch a new product or service 

To determine the feasibility of new projects or initiatives

Preventing potential problems by making informed decisions and taking proactive measures

A marketing SWOT analysis should be conducted at least once a year, but more often may be recommended for larger organisations. SWOT analysis can also be conducted more frequently to monitor organisational changes or plan for upcoming initiatives. 

When looking for information to include in the SWOT analysis, looking at internal and external sources is essential. Internal sources should include any data or metrics available within the organisation, such as financial statements, customer feedback, and employee surveys. External sources include data from competitor organisations, industry trends, and market research. 

📌 Reports to Gather 

Financial Reports 

Staff Turnover

Brand Bible (Vision, Mission, Values) 

CRM Reports

Email Open-Rates 

Newsletter Subscribers

Conversions 

Ratings & Reviews 

Loyalty Members

Sales Reports 

Google Analytics 

Website Traffic

Search Engine Performance 

Social Listening 

Media Mentions -Paid & Earned  

Social Media Reach & Engagement 

Customer Service Response Times

Backlink Partners 

Occupancy Rate/Covers 

Average daily rate

Sales circle length

Event Activity

Web traffic percentage of direct bookings

Percentage of occupancy

Revenue per available room

Customer feedback, comments on social media, online reviews, and

Revenue and forecasting

Market Share Index 

For hotels, metrics to include in the SWOT analysis are occupancy rates, average daily rates, revenue per available room, and customer satisfaction scores. 

For restaurants and food or beverage products, metrics include customer traffic, average ticket size, menu item sales, and customer feedback. 

🕵️ How to Monitor Opportunities & Threats

Monitoring opportunities and threats is crucial for any hospitality business to stay ahead of the curve. Here are some ways to keep on top of things:

Subscribe to hotel trends and newsletters to stay up-to-date with industry news and emerging trends.

Subscribe to industry-related blogs and forums to get insights into what's happening in the hospitality industry and what your competitors are doing.

Use social listening tools to monitor what people say about your brand and your competitors on social media. 

Keep a tab on your competitor's websites to see what they're offering and how they're marketing themselves.

Turn on Google Alerts for hotel-related keywords to get notified when something newsworthy happens in the industry.

By monitoring for opportunities and threats, you can make informed decisions to help your hospitality business stay ahead of the competition. 

Here's an agenda you can use with your team for SWOT analysis. 

✅ SWOT Analysis Workshop Agenda

I. Introduction

Welcome and introductions

Explanation of SWOT analysis and its purpose

II. Understanding the Company

Presentation of the company's history, mission, and current goals

Overview of the company's products/services and target audience

III. Strengths

Brainstorming session to identify the company's strengths

Discussion and analysis of strengths

IV. Weaknesses

Brainstorming session to identify the company's weaknesses

Discussion and analysis of weaknesses

V. Opportunities

Brainstorming session to identify potential opportunities for the company

Discussion and analysis of opportunities

VI. Threats

Brainstorming session to identify potential threats to the company

Discussion and analysis of threats

VII. Action Planning

Recap of SWOT analysis findings

Brainstorming session to identify potential actions to take based on the SWOT analysis

Discussion and prioritisation of actions

Assignment of responsibilities and timelines for action plan implementation

VIII. Conclusion

Summary of key takeaways from the Workshop

Closing remarks and next steps

❓ Questions to Ask in the WorkShop

How is your business unique?

How do you attract customers?

Is there anything you are already doing well?

Which services do you provide?

What makes your business unique?

How do you make your business profitable?

What are your resources?

How do you measure your performance?

What are the factors that are preventing your business from achieving its full potential?

Is there a skill or resource gap?

In what ways are your competitors better than you?

How have your customers been disappointed?

Does the budget have any limitations?

Is your service up-to-date? (facilities, website)

How well are your strategies working?

Opportunities

How can you take advantage of market and industry trends?

Based on your skills and resources, what trends can you tackle?

What new markets might you explore?

Is there a new customer base you can reach out to?

Do you offer any on-demand services?

Is there a need for new technologies, better software, or better integrations

How can you improve customer satisfaction?

Can you implement strategies to increase revenue, direct bookings, and the number of customers?

How can external conditions affect your performance?

Are there any changes in the industry?

What changes are you seeing in your guests?

Has the market share shrunk?

Do you have to comply with any government regulations?

Are there any potential competitors? 

How prepared are you for natural disasters and pandemics?

Do you have a plan to prevent data breaches or cyberattacks?

Hospitality SWOT Lists

These are some of the most common Strengths, Weaknesses, Opportunities, and Threats in the hospitality industry to help you get started.

Brand Strengths

Able to command a premium price

Broad appeal to the market

Clear brand associations

Clear positioning in the market

Good reputation in the industry

Growing brand equity

High brand awareness

A high volume of 5-star customer reviews

Perceived as the leader in the market

Positive brand attitudes among customers

Strong consistency in branding

Strong corporate social responsibility practices

Strong customer loyalty and affection

Strong international brand recognition

Strong market share

Successful brand extensions

Successful multi-brand strategy

Usually preferred by customers

Financial Strengths

Beneficial economies of scale with the ability to grow and expand

Competitive ADR (Average Daily Rate) to attract more customers

Competitive Price for improved market share

Consistent growth in revenue for long-term profitability

Easy access to capital and funding for future investments

Highly cost-efficient operations to reduce expenses

High-profit margins for increased revenue generation

High RevPAR (Revenue Per Available Room) for better performance

Pricing power to set optimal prices

Premium Price for enhanced brand image

Relatively low cost of capital for better financial management

Solid financial reserves to support growth and expansion

Stable cash flows for consistent financial performance

Strong profitability levels to sustain business growth.

Product & Service Strengths

A broad range of products and service offerings

Customised guest experience

Differentiated offerings

Easy-to-use product design

Great value 

High-quality product or service

No significant product or service gaps

Product and service leadership within the industry

Successful product/service line extensions

Superior products

Unique dishes and rooms/facilities

World-class service delivery standards

Company Culture Strengths

A culture of effective sales and service

A corporate culture that promotes excellence

Emphasis on internal marketing strategies

The expertise of highly skilled and motivated staff

Flexibility and adaptability of staff

Good knowledge of the local market

High-quality staffing standards

Low turnover of staff

Strong commitment to service delivery

Strong team-based culture

Superior staff skills and expertise

Customer Strengths

Attracting numerous new customers

Clear brand personas aren identified

Clear segments are targeted effectively

A clear value proposition is offered

Close proximity to customers

Effective CRM program is implemented

Effective niche marketing strategies are utilised

It fits well with customers' needs

Excellent customer experience is consistently delivered

Growing customer lifetime values are observed

A high level of customer loyalty is maintained

High levels of customer satisfaction are achieved

The high share of target markets is captured

Online booking is user-friendly

Stable customer expectations are met

Strong customer relationships are established

Substantial market share is maintained

Strong overall customer equity is observed

Share-of-customer is maintained

Targets price inelastic markets effectively

Competitor Strengths

Acquisition of key competitors

Cost advantage in leadership

Limited competition based on Price

Little competition from emerging new entrants

A limited number of competitors

Significant Barriers to market entry

Stable competitive environment

Weakness of existing competitors

Digital Strengths

Accessible management system

Easy-to-use apps

Established strategic alliances

Good bargaining power with retailers

Good bargaining power with suppliers

Good outsourcing partnerships

High ratings on review websites

Lots of social media likes/followers

Online advertising expertise

Strong franchisee relationships

Strong relationships with media

Strong relationships with online "influencers."

Strong retailer relationships

Strong social media engagement

Strong supplier relationships

Success in creating engaging online content

Success with online comparison websites

Successful online sales channel

Well-regarded in the industry

Marketing Strengths

Analytical approach to marketing

Attractive and appealing interior design

Broad coverage of sales areas

Clear and distinct market positioning

Clear marketing strategies

Clearly defined and successful marketing strategies

Consistent and strategic success

Customer-focused marketing strategies

Easily generates publicity

Effective global coverage and reach

Excellent knowledge of local markets

Highly convenient locations for customers

Highly effective sales teams

Exciting and engaging marketing communications

Large sales teams

Large social media followings

Modern and responsive website design

Multiple successful channels

Operating in markets with stable price levels

Ongoing marketing success

Premium locations for business

Proven track record of performance in the industry

Reaching emerging market segments successfully

Strong relationships with key influencers

Strong value proposition for customers

Successfully entering new markets with ease

Resources & Capabilities

Ability to anticipate customer needs and stay ahead of future trends.

Ability to make the most of marketplace data.

Ability to stay ahead of the competition by leveraging cutting-edge technology.

Adaptability and agility to quickly respond to changes in the market.

Efficient hotel operations.

Effective logistics system for faster delivery.

Excellent market insight to identify new opportunities.

First-mover advantage to get a head start on competitors.

High customer service levels to deliver an exceptional customer experience.

High marketing effectiveness to maximise ROI.

Highly effective new product development process.

In-depth market understanding to create more effective campaigns.

An innovative approach to delivering unique solutions.

Ongoing patent protection to prevent imitators.

Speed-to-market to capitalise on emerging trends.

Successful international expansion to reach new global markets.

Valuable customer database information to create personalised offers.

Brand Weaknesses

Declining brand equity

Have to price under the market

Inconsistent brand

Limited market appeal

Low brand awareness

Low hygiene rating

A low number of online reviews

Low review score

Many negative attitudes to the brand

Negative reviews

No clear brand associations

No consumer connection to the brand

No international brand awareness

Perceived as a me-too player

Recently failed brand extensions

Reliance on a single brand

Disinterested in corporate social responsibility

Substitute brand only

Unclear positioning

Usually, weak brand equity

Weak brand impact

Weak market share

Financial Weaknesses

Difficulties in accessing capital and funding

Fluctuations in cash flows

High cost of capital investment

High-cost structure in operations

High operating expenses

High supplier costs

Lack of economies of scale

Lack of effective pricing strategies

Lack of revenue growth

Poor cost management efficiencies

Tight profit margins

Weak financial reserves

Weak levels of profitability

Product & Service Weaknesses

Absence of in-room technologies

Dirty rooms

Imitative product design

Lack of certain essential facilities

Limited product range

Low-quality products

Low-value products

Many product gaps

No distinct product features

Poor food quality

Products are seen as hard-to-use

Seen as a product follower

Slow service

Unsuccessful product line extensions

Undifferentiated products

Company Culture Weaknesses

High staff turnover

Inexperienced staff

Infrequent consideration of internal marketing

Inflexible staff structure

Limited staff skills and expertise

Mixed staff quality

No real culture of sales or service

Poor corporate culture

Poor service levels

Sales teams that under-perform

Silo-based culture

Staff with low motivation

Customer Weaknesses

High level of customer turnover

Limited market share

Limited niche marketing success

A limited number of new customers

Limited overall customer equity

Low levels of customer satisfaction

No clear segments targeted

No real sense of the target consumer

No structured CRM program

No understanding of the customer journey

Not meeting changing consumer needs

Not overly close to the customer

Poor customer experience provided

Poor overall fit to customer's needs

Poor share of target markets

Poor share-of-customer

Reducing customer lifetime values

Targeting price elastic markets

Vague value proposition

Weak customer relationships

Competitor Weaknesses

Broad competitive set

Dynamic and competitive landscape with many emerging new entrants and substitute products

Limited market share compared to competitors

Losing acquisition opportunities to key competitors with a strong existing presence

Low barriers to entry into the market, leading to price-based competition and lower occupancy rates compared to competitors

Lower ADR than competitors with similar cuisine types and new openings by competitors

Poor customer experience relative to competitors

Significant cost disadvantage compared to competitors

Weak customer relationships compared to competitors

Digital Weaknesses

A low percentage of direct bookings

An unappealing channel partner

Awkward franchisee relationships

Ineffective online channels

Limited access to channels

Limited experience in online advertising

Limited social media success

No company app

No expertise in creating engaging online content

No online comparison website experience

No strategic alliances

No upselling

No/poor online sales channel

Poor product, service, and local knowledge

Poor ratings on review websites

Poor retailer relationships

Poor social media engagement

Poor supplier relationships

Poor/no outsourcing partnerships

Poorly regarded in the industry

Relatively new to digital marketing

Significant channel conflict

Static website

Weak bargaining power with retailers

Weak bargaining power with suppliers

Weak/no relationships with media

Weak relationships with online "influencers."

Marketing Weaknesses

Awkward locations make it difficult to reach potential customers.

Cannot access emerging market segments, limiting potential growth.

Continued strategic failures lead to inconsistent results.

Creative marketing approach only, needing more data-driven methods.

We need more resources to generate publicity.

Fluctuating marketing success makes it hard to predict outcomes.

Limited access to key locations hinders market coverage.

Limited engagement from marketing communications reduces effectiveness.

Sales area coverage leads to missed opportunities.

Little strategy success results in missed targets.

Low presence on social media limits potential reach.

No global access or reach limits international growth.

No strong relationships with influencers reduce brand awareness.

Operating in declining markets poses challenges.

Operating in markets with fluctuating prices creates uncertainty.

An out-of-date website negatively affects online presence.

Poor market knowledge hinders effective decision-making.

Poor marketing initiatives fail to gain traction.

The product-centric strategy may not meet customer needs.

Failure to enter new markets hinders growth.

Reliance on one main channel limits potential reach.

Small sales teams may not effectively cover target markets.

Uncertain marketing strategy leads to missed opportunities.

Unclear market positioning needs to be clarified for potential customers.

An unclear selling proposition fails to differentiate from competitors.

An underperforming sales team may not effectively close deals.

Up and down track-record of results creates uncertainty.

Weak overall value proposition fails to create customer loyalty.

Resource & Capability Weaknesses

Ineffective new product development process

Inefficient logistics system

Limited ability to keep up with technology

Limited access to key marketplace data

Limited customer database information

Limited expertise in IT/software

Limited marketing effectiveness

Limited ownership of key patents

Limited R&D expertise and team

Limited time for patent protection

No access to proprietary software

No real ability to identify market insights

No use of marketing-mix models

Poor manufacturing expertise

Poor speed-to-market

Poor understanding of the market

Poorly managed customer database information

Reliance on generic market modelling

Reliance on manual systems

Resistance to change

Slow to change and adapt

Unsuccessful international expansion/s

Unable to understand the market

Weak technical expertise

Brand Opportunities

Acquire a successful brand from a competitor

Broaden our brand through key sponsorships

Build international brand recognition

Build online engagement for our brand

Collaborate with other brands

Create and cultivate consumer loyalty for our brand

Develop a new brand

Expand our brand into new locations

Increase our corporate social responsibility image

Increase our price premium.

Improve attitudes towards our brand

Position our brand as the market leader

Pursue co-branding opportunities

Reposition our brand

Utilise more brand extensions

Utilise publicity to bolster our brand

Macro-Environment

Access local communities to create authentic and personalised experiences

Attraction to local and unique experiences increased

Become a disruptive innovator

Demand for home delivery services

Develop environmentally-friendly products

Google algorithm changes

Government de/regulation

Government subsidies/incentives

Increase corporate social responsibility image

Increased promotion of an "environmentally-aware" corporate image

Increased use of environmental issues to reduce cost structure

Improve attitudes towards the brand to create consumer loyalty

Introduce new, modern technology or systems

Lobby the government for improved legislation

Low inflation outlook

Rapid technological change

Services of the shared-economy

Shift to online shopping

Use key sponsorships and publicity to help build the brand

Financial Opportunities

Pursue economies of scale to increase margins

Increase margins for our patent-protected products

Increase margins across the board through cost efficiencies

Invest in new ventures by raising capital funding

Offer flexible pricing options to generate financial opportunities 

Work to create cost efficiencies.

Add more product line extensions to broaden our offering

Add increased product augmentation to enhance product value

Eliminate product gaps by expanding our product range

Offer multiple price points across our product range

Target new segments with our product range

Develop breakthrough new products to stay competitive

Improve the quality of products to target new markets

Create new products for international markets

Develop products to target key segments and meet consumer needs

Develop unique product features/designs to differentiate our offering

Expand our product mix to increase market share

Grow our brand by extending it into new areas 

Identify and pursue relevant market gaps to capitalise on opportunities

Improve overall product quality and design to enhance customer satisfaction

Improve product quality to increase unit margins

Introduce low-cost products under a new brand to attract price-sensitive shoppers

Introduce new menus to expand our offering

Introduce new products faster than competitors to stay ahead

Modify marketing spending towards digital marketing to improve ROI

Rationalise and simplify our product range to reduce costs

Reposition weaker products to increase sales

Streamline product features to reduce costs and improve efficiency

Supply private label brands for key retailers to increase revenue

Tailor products to fit consumer needs and increase customer loyalty

Company Culture Opportunities

Cultivate a customer-centric culture to enhance relationships

Develop a culture of high-quality service to increase customer satisfaction

Develop a culture of innovation to stay ahead of the competition

Develop our sales and service team to increase revenue

Hire top-notch personnel to improve service quality

Invest in staff training to enhance skills and knowledge

Optimise staffing levels with automation to reduce costs

Reposition weaker products to improve profitability

Simplify product features to increase efficiency

Streamline processes with cross-functional teams to reduce costs

Upsell value packages to increase revenue

Utilise cross-functional teams to develop new, unique products

Utilise top employees to cross-train other staff members.

Customer Opportunities

Attract new customers through special offers and packages

Build stronger customer relationships

Create a more precise value proposition

Implement a CRM

Set up a loyalty program

Establish and target clear brand personas

Concentrate on growing customer share

Enhance customer loyalty and retention

Take the lead in the market by growing market share

Growing volume of tourism activity

Improve offering to increase customer satisfaction scores

Improve the overall customer experience

Increase customer loyalty

Local or international feeder market

Determine the steps in the customer journey and target them

Modify marketing mix to fit customer needs better

More effectively manage customer expectations

New market segments: Corporate guests, digital nomads, solo travellers, and staycations

Shift to a customer-centric marketing outlook

Target more price-inelastic markets

Target niche markets

Untapped opportunities in the industry

Competitor Opportunities

Acquire key competitors to expand market share

Aggressively challenge emerging players to differentiate from the competition.

Challenge substitute offerings by highlighting unique value propositions

Defer new competitors by leveraging existing channel relationships

Leverage low price points to attract niche customers

Make media announcements to increase brand awareness

Undercut specialist competitors with competitive pricing strategies

Digital Opportunities

Advertise on comparison websites to increase visibility

Build/acquire digital marketing expertise to maximise ROI

Build an online sales channel to reach a wider audience

Create exciting videos to enhance engagement

Create engaging social media content to build brand loyalty

Develop relationships with online influencers to expand reach

Expand geographic reach to increase customer base

Expand the number of retailers to increase sales

Expand the number of digital channels to increase visibility

Improve cross-selling strategies to increase revenue

Improve overall social media engagement to build brand loyalty

Improve visibility and invest in SEO initiatives to increase traffic

Increase the level of online advertising to reach a wider audience

Increase website engagement to convert more leads

Introduce an app to enhance customer experience

Leverage bargaining power with retailers to maximise profits

Leverage bargaining power with suppliers to reduce costs

Move to a franchisee model to expand business

Shift channel focus to online emphasis to increase sales

Target review websites for better ratings to build credibility

Expand reach by gaining more social media followers

Work closely with key channel partners to maximise profits.

Marketing Opportunities

Broaden reach to new geographical locations

Build influencer relationships

Compete on value instead of Price

Compete on Price to increase market share

Conduct marketing experiments to test effectiveness

Create a clear marketing strategy and direction

Develop marketing-mix models for better performance

Establish media relationships to gain exposure

Expand globally to new markets

Expand the number of stores/outlets to increase visibility

Improve market positioning for better results

Leverage market insights to stay ahead of the competition

Redesign key stores/outlets to improve customer experience

Relocate to high-traffic locations for increased visibility

Strengthen and clarify our value proposition to attract more customers

Target high-growth markets for increased profits

Utilise events, functions, and holidays for increased visibility

Use social media campaigns to engage with customers

Resource & Capability Opportunities 

Become a pioneer in emerging markets.

Build our expertise in IT/software.

Create suitable partnerships for outsourcing.

Data mine our customer database.

Develop relationships with local communities and influencers.

Develop strategic partnerships.

Improve our marketing analytics capabilities.

Improve our manufacturing experience and expertise.

Leapfrog our competitors' technology.

Leverage our big data.

Leverage our excellent logistics system.

Streamline our internal processes.

Use automation to boost performance.

Brand Threats 

Adverse publicity

Being perceived as outdated and slow

Brand damage caused by media stories

Brand damage due to viral videos

Brand inconsistency perceived by consumers

Deteriorating relationships with franchisees

Falling brand recognition

Increase in supplier costs

Limited corporate social responsibility image

Loss of a key retailer or supplier

Negative attitudes towards the brand

Organised consumer advocacy groups

Poor brand fit in international markets

Poor/negative press coverage

The potential failure of new products damages our brand

Product recalls leading to brand damage

Reduced market share

Retailers refusing our product line extensions

Unclear brand positioning and lack of differentiation

Untenable channel conflict

Vague brand associations

Weak bargaining power exploited by retailers

Weak bargaining power exploited by suppliers

Weakening retailer relationships

Weakening supplier relationships

Weakening of brand equity

Macro-Environment Threats

Breach of data and privacy issues

A decline in economic conditions

Disruptive innovation

Disruptive technology

Economic downturn

Excessive regulation and bureaucracy

Foreign exchange risk

Forced closure

Growing concerns about the natural environment

Hacking and data loss

High levels of inflation

High levels of unemployment

Home delivery services

Increase in commodity prices

Increased corporate tax rates

Loss of oil and energy

Online fraud

Political instability or potential government change

Product piracy

Regulation and deregulation by the government

Rise of shared-economy services

Terrorism and its impact

Terrorism and political uneasiness

The gig economy

Theft from parking areas

Unpredictable trends and disruption

Uncertain market conditions

Financial Threats 

Ability to fulfil cash flow demands

A decline in unit margins

High debt levels that limit profit potential

Increase in operating and technology expenses

Limited levels of profit

Poor profitability leads to a higher cost of capital

Rise in fixed costs

Poor profitability leads to slower growth

Funding shortage slows growth

The upward trend in energy costs

Product & Service Threats 

Becoming a copycat due to similar product offerings

Decline in product life cycle stage

Failed attempts at extending the brand

Loss of distinctive product traits

New products eating into current sales

Potential mishaps with new product launches

Outdated product offerings

Slow product development speed

Company Culture Threats

High turnover during holidays

Inadequate resources and support for mental health and wellness

Inadequate training and development programs

Inconsistent or inadequate communication

Infrequent recognition and reward of employee achievements and contributions

Inflexible policies and procedures

Lack of diversity and inclusion

Limited opportunities for career advancement

Negative workplace culture

Poor work-life balance

Poor working conditions

Customer Threats 

A significant change in consumer behaviour

Changes in consumer spending patterns

Changing consumer habits

Consumers are becoming more demanding

Consumers are becoming more price-sensitive

Consumers not buying product line extensions

Customers having less income

Declining share-of-customer

Geographic shifts by consumer markets

Inadequate resources for mental health

Infrequent recognition of employee achievements

Lack of customer trust

Losing key/valuable customers

Losing VIP and high-value customers

Loss of a key customer account

Loss of market share

Reaching market saturation

Shift to an experience economy

Weakening customer relationships

Weakening customer satisfaction

Competitor Threats

Aggressive price reductions

Being challenged by start-ups with ample funding

Being outperformed by data-driven rivals

Being underpriced by more efficient opponents

Competitor acquisition/merger schemes

Competitors introducing improved or superior products

Competitors introducing breakthrough products

Competitors more capable of diversifying revenue streams

Competitors providing more value-added services

Competitors strengthening their brand image

Competitors targeting our gaps in product offerings

Competitors targeting our key customers and segments

Cost leadership advantages

Disruptive new competition

Emerging fast-growing competitors

A growing set of competitors

Highly-financed competitors are growing at a faster pace

Industry-wide price wars

IT-savvy competitors achieving greater efficiencies

Many new emerging entrants

More aggressive competitor behaviour

More efficient competitors competing on Price

More insightful competitors outperforming us

New international competitors emerging

Third-Party aggregators.

Digital Threats 

Brand impersonation on social media

Competition from online travel agencies and booking platforms

Cybersecurity attacks and data breaches

Inability to keep up with changing digital trends

Negative online reviews and ratings

Poor website design

Rapidly evolving technology and rising customer expectations

Marketing Threats 

Being too ethnocentric and not catering to diverse markets

Becoming overly Price competitive and losing profitability

Experiencing limited success in creating engaging content

Facing increased market and media fragmentation

Inability to grow the customer base long-term

Incurring the high cost of big data and CRM programs

Losing market share due to poor marketing efforts and weak social media engagement

Poor marketing ROI and damaging brand publicity

Poor ratings on review websites affect the brand's reputation

Weakening value proposition in the face of competition.

Resource & Capability Threats

Competition overtaking with better technology

Difficulty in adapting to change quickly

Deteriorating profits due to the expiry of patents

Disintegrating strategic partnerships

Employee negotiations issues

High rate of employee turnover

Impact of inefficient logistics

Inexperienced workforce

Inflexible internal procedures

Limited internal marketing efforts

Outdated business model

Overdependence on manual systems

Poor customer service culture

Strategic Implementation: Turning Your SWOT Analysis into Action

Once you have completed a SWOT Analysis for your hotel, restaurant, or food and beverage brand, you may wonder what to do next.

1. Brainstorming Ideas: Once you have identified the strengths, weaknesses, opportunities, and threats of your organisation, gather a team and brainstorm ideas that can address each issue. Try to keep the ideas specific and achievable.

2. Selecting Ideas for Development: After brainstorming, select a few ideas that are feasible, cost-effective, and relevant to your organisation's vision. Analyse and evaluate each suggestion by considering the resources required, the timeline, and the potential risks and benefits.

3. Deciding on Priority and Urgency of Goals: Determine which ideas are high priority and which need immediate action. Use a prioritisation matrix to sort each idea based on its importance, urgency, and impact on the organisation. Assign a timeline and set realistic goals.

Tips and Best Practices:

To get a well-rounded perspective, involve diverse stakeholders in the SWOT analysis and action planning.

Keep the action plan simple and concise. Focus on the most critical goals and avoid overwhelming the team with too many tasks.

Use SMART (Specific, Measurable, Achievable, Relevant, and Time-bound) criteria when setting goals.

Regularly review and update the action plan to remain relevant and practical.

Motivate and engage your team by celebrating small wins along the way.

When developing a plan of action, it is important to remember that no SWOT Analysis is perfect. Therefore, you may consider conducting multiple SWOT Analyses from different perspectives to identify any potential blind spots or forgotten opportunities. 

In addition to developing a strategy for utilising the insights gained from the SWOT Analysis, it is also important to be mindful that the analysis results are only as good as the data used to inform it. If you rely on outdated or incomplete information, your strategy may be based on inaccurate data. 

Any hospitality professional can benefit from the SWOT analysis as a valuable tool to help them make informed decisions. Understanding your business's strengths and weaknesses will help you maximise opportunities and minimise threats. 

Here’s To Your Success 🥂

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Online Hotel Management System

Here’s How You Can Do Hotel SWOT Analysis Effectively

I was in my teens, when I heard the word SWOT analysis for the first time. And, I always used to confuse it with SWAT (Special Weapons And Tactics). 

It made me wonder, if I was a student or part of a military training camp. Eventually, my mentors guided me that both terms are miles apart from each other.

While working in the hospitality industry, I came across various opportunities and ways to do it. So today, let’s find more about SWOT analysis of hotels.

Table of contents

What is a swot analysis, why should you do your hotel’s swot analysis, what factors are to be considered while doing hotel swot analysis.

• Revenue and forecasting report
• Understanding market share
• Competitor analysis
• Hotel reviews

How to prepare a hotel SWOT analysis report?

SWOT is an acronym for Strengths, Weakness, Opportunities and Threats. It’s an old-school way to assess an individual or a business at certain parameters.  

Many hotels adopt this technique before commencing their operations or when they face a critical situation. It gives an overview of all the angles that could affect their business negatively or positively.

But, being a traditional approach, hoteliers wonder if it’s necessary to perform their hotel’s SWOT analysis.

Let’s understand the importance of hotels SWOT analysis with a situation.

Say, you own a hotel amidst snowy mountains.  Initially, your property brims with guests. But soon enough, you notice a drop in the bookings. 

To recover from this loss, you deploy impromptu strategies. But none of them work.

The SWOT analysis comes into the picture here. It will give you an outlook of your hotel’s up-selling factors as well as the areas that have a scope of improvement.

First, let’s take a look and understand the hotel SWOT analysis report.

Here is a brief explanation of each point for better clarity.

Strengths of hotel : These are the key areas highlighted positively by guests. They give you an edge over your competitors. It could be location, food quality, polite staff, and such likes.

Weaknesses of hotel : Your property’s highly criticised aspects, falls under this segment. You tend to lose a majority of guests due to these points. Unclean rooms, rude staff, bad food, and slow services are some of the hotel weaknesses examples.

Opportunities of hotel : Any upcoming events, functions and holidays, which can bring you business are an opportunity. You can also consider any low-performing competitor in this vertical. 

Threats of hotel : What threatens your business? Reduced market share, well-performing competitors, hotel aggregators and so on. These are to name a few. Any factor that sweeps your guests away, is a part of this category.

Once you determine the core aspects of the SWOT, they will assist you in streamlining your focus points. You can then take corrective actions to improve your hotel’s performance.

Now that you know what is SWOT analysis in hotels, it’s time to learn about the factors that will help you figure it out.

a. Revenue and forecasting report

I hope you read my previous blog on hotel reports . As stated in it, sales and forecasting reports play a vital role in the hospitality industry. 

An overview of your revenue based reports will give you a brief idea of your hotel’s performance. A gradual drop in the figures should trigger a red alert.

You can analyse the sales reports to see which department is contributing more towards the revenue.

Your priorities should be focusing on the areas where the cost incurred is more than the revenue generated.

b. Understanding market share index

Every hotel has a specific market share index. It provides them with a foresight to plan sales strategies.

In simple words, market share is all about determining your hotel’s performance with respect to your competitors. Calculating it is simple and doesn’t require working on heavy data.

Let’s assume that your hotel has 20 rooms. You have three competitors, each with 20 rooms.

So, the total market potential would be 20*4=80 rooms per day.

Let’s say, each hotel achieved 50% occupancy every day for the entire week. So, the actual market potential would be, the sum of all the rooms sold in a week by each hotel .

In your case, it would be:

10*7 + 10*7 + 10*7 + 10*7 = 280 rooms.

Once you consolidate the data, it’s time to calculate your rightful and actual market share:

* Rightful market share = Total No of rooms (Saleable rooms) / Total market potential*

* actual market share (percentage) = actual number of rooms sold in a week / actual market potential *.

Let’s use this formula and understand your case study.

* Rightful market share = Rightful market share = 20/80 = 0.25 or 25%*

* actual market share (percentage) = 70/280 = 25%*.

If we see, your actual and rightful market share are equal. This implies that your hotel is doing quite well in comparison to the competitors.

c. Competitor Analysis

In any business, competition is a MUST. Even in the hospitality industry, you will be the best until you have a compset (competitor set).

It’s quite simple to understand. If I were the only accommodation provider in my vicinity, it would make me rank at the top.

However, the real challenge would be when a new hotel opens in the same locality. The market share will split into two. 

It will be a tough competition. Guests will choose a hotel providing a better quality of services.

Similarly, during hotel SWOT analysis, it’s crucial to determine your compset. It will guide you in gauging your potential threats. 

Eventually, you can redefine your marketing strategies and work on your weaknesses to stay ahead of the game. 

So you can see, competitor analysis is quite an important step here.

d. Hotel reviews

Reviews are a pivotal factor during SWOT analysis of hotels. They provide a 360-degree view of any property’s best and worst features. 

Most of the OTAs and reviewing websites have keyword-based searches. If guests click on a specific word in the reviews tab, it shows them all the feedbacks related to it. 

It’s the best tool for hotels to analyse their most praised and criticised points by the guests. It helps them in understanding the property from the guests’ perspective.

So, with all the mise-en-scène and mise-en-place ready, it’s time to create the hotel SWOT analysis report.

Although there are various ways to do it, I would suggest going with the quadrant method. Why?

• It’s easy to understand
• All the aspects are available on a single platform

It’s similar to using a graph in mathematics. Once you have created quadrants, start listing strengths and weaknesses of the hotel.

As I said earlier, use reviews to accomplish this task. You can opt for a reputation management tool . It will share a comprehensive report of positive and negative points from all the booking websites you are listed. 

After listing these points, check for upcoming social events in your city. Don’t forget to consider any carnivals, feasts, holidays or corporate conferences.

I would recommend exploring new market segments such as solo travellers , corporate guests and staycation as well.

This leads us to the last part of the SWOT analysis for hotel – Threats. As I said, disregarding your competitors is a grave mistake. 

I would suggest considering their reviews, market share, ADR, ARR and other verticals while mentioning threats. It will give you an accurate position of where your hotel stands in comparison to your competitors.

With all the relevant updates done, it’s time for you to use this report and make the necessary changes to be your guests’ best choice.

Conclusion  

As they say – Old is gold. SWOT analysis is a traditional method for self-evaluation. It can be about an individual, a billion-dollar organisation, or a mid-scale business. It is simple yet quite effective.

Even in the hospitality industry, SWOT analysis has been used for years. It’s definitely a reliable method. 

If your business hits a low, don’t worry. Just take a step back, initiate your hotel’s SWOT analysis, understand the report and start improving until your property achieves the set benchmark.

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Hotel swot analysis: discovering improvement opportunities.

Back in the mid 1960s three members of the influential Stanford Research Institute in the USA published a study into Long Range Planning, which identified four major factors that could affect the fortunes of businesses and organisations. This was the seed which would over time grow into a tool known as SWOT Analysis, after the four categories of Strengths , Weaknesses , Opportunities and Threats . In its various forms, SWOT Analysis is still used in almost all businesses and sectors, but perhaps surprisingly, not so much in the hospitality industry. Let’s look at how to take some significant steps in the strategic planning process of hotel SWOT analysis.

Setting an objective for your hotel SWOT analysis

The underlying purpose of any SWOT analysis is to capitalise on existing advantages, and to identify areas for improvement . In doing this it’s necessary to have an objective. OK, you could say ‘We want everything to be better’ but that can be too unfocussed. So for a hotel SWOT analysis, target a specific area - be it guest satisfaction, occupancy rates, or the overall competitive position of your hotel in the market. Of course these things overlap, but having a specific objective to start with makes for a more effective analysis. The better you get at doing SWOTs, the more you will be able to broaden their scope.  An important point from the get-go is to make this a team effort . Gather stakeholders from across your business to brainstorm and suggest different angles as they see them. The more viewpoints you collate, the more effective the SWOT analysis of a hotel can be.

In this article, we'll dive into the details of creating a SWOT analysis. If you'd like to download a SWOT analysis template completed with a hands-on list of questions, fill out this form and you'll be able to access it:

Internal and external factors of SWOT

The idea of a SWOT analysis is elegantly simple, which is another reason why stakeholders in your hotel can quickly appreciate and contribute to the process. Strengths and Weaknesses are essentially internal attributes. That is, they are within your direct control to change:

It will involve identifying the hotel's resources that give it a competitive advantage. These can include location, amenities, reputation, service levels, awards, and positive online reviews.

The hotel SWOT analysis will recognise internal factors that may hinder the hotel's performance. These might include outdated facilities, limited marketing budget, understaffing, high employee turnover, or negative reviews on online media.

The external attributes are those things which are outside your immediate control or influence and represent both Opportunities or Threats to your business:

Opportunities

Opportunities are factors that could be leveraged such as events happening in the area, tourist attractions, a particular niche market, or new partnerships with other businesses and the OTA ecosystem.

Threats are identified as factors that could impact the hotel negatively. These include increased competition, changing customer preferences, economic downturns, or negative publicity. In the light of global warming and the effects it has had on tourism (in southern Europe especially), we might be wise to also add ‘Natural disasters and climate change’ to the list of possible threats.

With each point that you assess, don’t just think of it as ‘either / or’. That is, if you are analysing the food and beverage offering, there are many gradations between ‘Amazingly good’ and ‘Embarrassingly awful’! Be as honest as possible, and get granular. In other words, your food may be ‘Excellent’, but perhaps the wine cellar is merely ‘OK-ish’. The easiest way to represent all the factors you choose to examine for a particular goal is to create a simple four-box matrix, and then individual items can be plotted by their position to show whether they are ‘high scoring’, or not. With a matrix drawn up, you will be able to clearly visualise the relationships between internal and external factors. From that it will be possible to develop strategies : Prioritising the most significant elements from each category based on their potential impact. SWOT analysis strategies build on strengths, acknowledge and address weaknesses, capitalise on opportunities, and work to mitigate threats.

Let’s look at each SWOT category in turn to see how the principles can be applied.

Strengths (of your hotel)

So what gives your hotel the edge? Sometimes it may seem so obvious to the hotelier that they almost forget that it’s not so obvious to the market. By brainstorming with your team you can assess and define what makes your hotel special and a cut above the rest.

Location, location, location

Let’s face it, where a hotel is located has to be one of the most important factors guests will be looking for , whether it’s the convenience of being close to an airport, or in breathtaking scenery. Whatever your strengths are when it comes to location, make sure these are included in your SWOT analysis. What’s more, give it a score as to how well it satisfies the needs of the market.

Map out your hotel’s reputation

A hotel’s reputation is both an internal and external factor, and the hotelier must be able to assess how well it measures up . Is the reputation good, and in what areas? Perhaps the food and beverage reputation is great, but facilities and services come lower on the matrix. Map your reputational strengths to see where improvements have to occur.

Improve your Staff

Hand in hand with reputation comes the quality of a hotel’s staff. Your staff quality lies in a number of things, such as their level of motivation, their problem solving abilities, or their willingness to adapt to new technology in the hospitality industry. Recognising these as strengths means they can be built on and enhanced to produce increased bookings, and enhanced profitability.

Implement Hotel technologies

Guests increasingly expect to make searches and bookings online, and the hotel which has a great website (with effective Search Engine Optimisation ), and connects seamlessly with OTA sites has significant strengths. Deployment of modern hotel softwares also provides strengths, with features such as ‘touchless’ check in and check out, and apps such as SabeeApp’s GuestAdvisor , which provides a communication channel to guests during their stay.

Weaknesses that you can turn into strengths

Sometimes it’s hard to see the weaknesses of the offering. After all, if the hotelier was really aware of problem areas, they would surely address them. Paying particular attention to weaknesses is therefore vital, because this is the area where guests can be most impacted.

Transforming weaknesses into strengths requires targeted strategies. For instance, if a hotel identifies a weakness in online engagement, it could implement a comprehensive social media and online presence strategy, actively responding to reviews and creating engaging content. Similarly, if outdated facilities are a weakness, a hotel could invest in renovations or rebranding to enhance its appeal. Successful case studies could include hotels that revamped their customer service training programs, leading to improved staff performance and, consequently, increased guest satisfaction and positive reviews.

Introducing a clear value proposition 

Coupled with knowing your guest comes the proposition of the hotel: What are you offering? An unclear proposition is a huge weakness - so get very clear about whether you are a luxury hotel, get-away destination, family-oriented… and so on. 

Manage your online presence and reviews

Social media comments and reviews on OTA sites are hugely influential in persuading guests to book a hotel. Don’t regard this as merely an external issue however: You can actively engage in social media and be proactively involved in dialogue with reviewers. Internally, a hotel can create the environment to monitor social media , create its own channels, and respond to the ‘world out there’. The hotel which is weak in online engagement is flying in the face of every contemporary trend in the hospitality market.

Improve your Facilities and offers

For your target market and chosen proposition, does your hotel have the facilities and offerings that can be expected by guests? If the answer is ‘No’, then that is a significant weakness. Benchmark by checking out the competition in the area - what do other hotels do that you don’t? It could be as simple as offering a welcome gift , or having some gym facilities, but if your hotel is behind the curve, benchmarked against the competition, then it can be a major weakness.

Opportunities for future growth

There are always opportunities in the hospitality sector, and this is also where checking out what the competition is doing can be very revealing. Sometimes it’s simply a case of adjusting your offering and ‘working smarter, not harder. ’ Some opportunistic examples include.

Finding local partners

What’s going on in the local area: Are there any events, sports activities, festivals or seasonal celebrations coming up? Partner with organisations and other businesses which are aligned with your demographic. This can be achieved as easily as providing mutual links to websites and publicity, or by entering more formal ‘approved supplier’ partnerships. Often this costs nothing except a few phone calls, and maintaining good partnership.

Meeting the needs of guests

If you really know who your ideal guests are, you can meet and enhance the guest experience in line with their needs. If your hotel is in an area of natural beauty (for example), and some guests are day hikers, then think about what they may need at the end of each day, such as sauna or wellness facilities. 

Getting technological

This is without doubt one of the most important opportunities to pursue in meeting the needs of guests. It’s also something which appeals to almost everyone: What’s not to like about seamless booking, check in and check out, and enhanced in-room facilities? It is now an expectation of guests that there will be technological solutions at all the touchpoints of the guest experience. Another opportunity coming out of this is that hotel staff can therefore be freed from the more mundane tasks to be much more customer-facing.

Communicate with your guests

The ability to communicate with guests before, during and after their hotel stay has never been easier, through social media and by utilising the power of Property Management Systems . These can - for example - manage templates of personalised emails to confirm bookings and say ‘thanks for staying with us’. Communication continues after the stay through special offers and discounts, as well as the continued monitoring of what guests say about your hotel online. Responding promptly to both positive and negative reviews represents a huge opportunity to protect and enhance your brand reputation.

Threats - better safe than sorry

What’s the worst that can happen? Hotel staff are well-versed in the obvious threats of what to do in physical emergencies, but hoteliers need to be just as aware of external threats in the market.

New offerings from competitors

Don’t operate in a vacuum, but constantly scan the online presence of other hotels in the area that have a similar guest demographic to yours. What new facilities do they have, what special offers are they making, and are they promoting seasonal or other special events? 

Train your Staff

A hotel’s staff are arguably its greatest asset - if they are friendly, responsive and customer-facing. However the threat posed by just one unpleasant interaction  can completely sour the guest journey . By training every member of staff in being customer-facing, a very large potential threat can be avoided. 

If you'd like to learn about the guest journey in detail, don't forget to check out our ebook below:

Consider pricing issues

This of course is an almost constant threat in the hospitality market, and the best response is to research and be aware of the current trends in pricing. Do this by scanning competitor’s rates, and through the OTAs. Do not be priced out of attracting guests, but of course ensure that profitability is maintained. Easy to say, sometimes hard to do!

Expecting the unexpected

No one predicted the massive worldwide downturn of business due to the covid pandemic. Some threats are just too big to adequately plan for. However, savvy hoteliers should always be on the lookout for external trends in the market which could impact business. These can include transportation strikes, power price hikes, or, of course, public health issues. You can’t stop macro events from happening but you can have a proactive stance ready to deal with such threats.

Step-by-step SWOT Analysis for hotels

So how to go about a hotel SWOT analysis? At SabeeApp we have been working closely with hotels across the hospitality sector for over ten years, so we have a good understanding of the Strengths, Weaknesses, Opportunities and Threats facing every hotel of whatever size and type.  That’s why we are confident in offering these guidelines for improving your business by implementing a SWOT analysis of your hotel. We created a template that you can use together with your team to do your hotel's SWOT analysis. Make a copy of this document and start working! Here are some more tips for you, to make the process flawless.

• Do include all stakeholders in the process - they can contribute valuable experience and insights.
• Don’t attempt a ‘one size fits all’ SWOT analysis of everything. Rather, work on analyses of specific areas, such as reception and check-in, or food and beverage.
• Do think creatively and brainstorm. Agree that initially anything and everything is ‘on the table’, especially from members of staff.
• Don’t dismiss any suggestions or observations, however unusual they may seem.
• Do act on what you have learned from the SWOT matrixes that you collate - they provide a hugely valuable action plan for future success.
• Don’t forget to include guest feedback that you have received, either positive or negative. After all, the SWOT analysis is designed to improve your hotel business and make it more profitable and effective - which means meeting the needs of customers.
• Do everything step by step.
• Don’t expect that one session with a flipchart will identify every single strength, weakness, opportunity and threat facing your hotel. The process requires time and granularity. Some issues can be addressed easily, others may require longer twerk planning and investment to fix. Every step taken that addresses the SWOT matrix is a further step towards long term success.

SWOT analysis is particularly beneficial for the hospitality industry as it helps hotels assess and capitalize on their strengths, identify and address weaknesses, leverage opportunities, and mitigate potential threats. The unique considerations for hotels involve the intricate balance between internal factors (such as service quality, staff efficiency, and facility offerings) and external factors (like market trends, competition, and unforeseen events). Challenges may arise in aligning diverse aspects like guest satisfaction, technological advancements, and local partnerships within the SWOT framework.

Should you include the stakeholders of the company?

Engaging stakeholders effectively involves a structured approach. First, assemble a diverse group representing various departments and roles within the hotel, including management, staff, and even customer feedback. Conduct brainstorming sessions, encouraging open communication and ensuring everyone feels their input is valued. Use facilitation techniques to extract insights from different perspectives and prioritize them based on relevance to the overall hotel objectives. Regular feedback loops and transparent communication channels can help maintain ongoing stakeholder engagement.

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