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SWOT Analysis of Hotel

One of the most important services is the hotel industry that affects the tourist arrival of the country. The hotel industry is mainly depended on the provision of guest accommodation and its related services. In contrast, the hotel industry focuses more on leisure in a more general sense. It covers accommodation, bars, restaurants, cafes, bars, and many travel and tourism services. Hence, the hotel industry plays an important role with regards to tourism as it belongs to the support service.

There is no doubt that the hotel industry is a huge sector with regards to revenue.

The SWOT analysis of hotel provides an insight on whether the industry contributes towards its goals. It differentiates all the main strengths, weakness, opportunities, and threats that give guidance to the hotel to scale up more. The main benefit to conduct SWOT analysis of hotel is the opportunity that it gives you to plan more and be ready to face any issues.

In short, the SWOT analysis of hotel highlights the strengths that the company has and its weakness that it needs to work on. It also throws light on the threat that the business can encounter and ways to get the maximum benefit from the various opportunities in the international market.

To make sure that your hotel meets the long-term competitive advantage it must address the various concerns highlighted in the SWOT analysis of hotel.

In this article, we provide you with a viewpoint for the hotel industry that has a specific focus on its main business strengths, weakness, and the way these drawbacks can help them into advantages. This information would help hoteliers to set business goals. Read this article to get a good idea of the way hotel industry plans out.

Let us discuss the SWOT analysis of hotel.

Strengths in the SWOT Analysis of hotel

Strengths in the SWOT Analysis of hotel

Provides a Safe Place Away from Home

The main strength of hotel industry is that it provides safe accommodation for people while they are away from their homes. This is indeed an undeniable fact of the hotel industry. The industry has many decent rooms.

There are many varieties of hotel across the world that provides many rooms types right from boutique hotels to splendid international brands. These hotels have everything that they could offer to the customers and where the customers would find the right fit for their requirements.

The hotels provide a place for everyone where there could sit back and relax away from their daily stress and activities. If the hotel industry is not there or not safe, then vacations and road trips would not be safer or not possible.

Contributes to Local Economy

The hotel industry is one of the domains that provide significant financial power. This industry would certainly flow the things over in the local economies. Even though it is the local attractions that would bring out masses to the community, but it would be the hotel that would keep them there.

When people stay in a specific place, they explore that place to a great extent and would avail of all the local services and the goods available in that place. They would visit local malls, shop in local stores, and eat in the local restaurants.

All these finances would end up in the community, so the hotel industry contributes to a large extent to the local economy. Hence, this way the hotel industry is an advantage to the community.

Hotel Industry Employs a Huge Number of People

This is yet another strength of the hotel industry. It is indeed a mammoth of employers. The hotel industry is a huge sector that employs many people in numerous disciplines.

The various services where the people would get employed are groundworks, services, banking, entertainment, and the list goes on. There are many people who get benefitted from the hotel industry. It employs so many people that it provides a place for those who are in needy.

High-Profit Margin

The hotel industry does require a huge capital at the initial stage, but it is indeed a worthy investment. This is because the labor cost is low, and its profit margin is high. Hence, this is also a strength for the hotel industry.

Vast Sector

Hotel industry is a huge sector in the world. Across the world, there are numerous hotels with many rooms that cater to the travelers. This would easily cope up with the travel requirement of many tourists.

Also, there are many popular hotels in the market that maintains its brand and class to serve various kinds of people with various budgets.

Weaknesses in the SWOT Analysis of hotel

Weaknesses in the SWOT Analysis of hotel

High Rates in Hotels

The main weakness of the hotel industry is that the rates in the hotel industry are high where few people would not be able to afford it. The main issue is that these rates are not feasible for an average household in the current world.

So, for this reason, the hotels tend to lose customers to compete in the industry. Also, there is less demographic that the hotel industry can market its services and products. Even though there would be affordable hotels at a feasible rate, they would fall at a lower standard of services and maintenance as well.

High Tax Rates

In some countries, the hotels are subjected to a high tax structure that would, in turn, take the cost to provide hospitality services to a whole new high. Few rooms are subject to a specific tax where the charges per night are listed.

Also, few hotels receive high sales tax when is it pitted as against some other sub industries like bed and breakfasts.

Slow Implementation

Setting up a hotel requires a huge capital and takes more time.

So, the amount you spend to set up the hotel would not be immediately reflected in the profit margin. The hotel industry is a slow implementation and would sometimes take more years to get more customers.

Fewer Amenities

One of a common weakness for hotel industry is its lack of providing in-room technology, lacking few facilities, poor online reviews, and maintain and outdated website.

Nowadays people prefer all the facilities in the room itself and they depend on high online rates. All these parameters would reflect in the hotel.

Opportunities in the SWOT Analysis of hotel

Opportunities in the SWOT Analysis of hotel

Rising Income

When people’s income keeps increasing, they would tend to take a vacation quite often. This is a great opportunity for the hotel industry, and they should come out with new methodologies to serve the customers so that they would love to come for their vacations and enjoy a stay there.

Every hotel should find out ways to serve the customer in a good way so that they would de-stress themselves.

Unique Experience

Every hotel finds an opportunity when they provide a unique experience to the customers. This way, any hotel would get more customers that would increase its revenue.

Society Trends

The hotel industry must always adhere to the current trends of society. On doing this and when it keeps on changing its style, there is a huge opportunity for the hotel industry.

So, keeping the hotel industry that would be the best fit for the society would take the hotel industry to a better position.

Threats in the SWOT Analysis of hotel

Prevalent Condition 

Airbnb Lodging Alternative

Many kinds of alternative lodging that are cheaper and more vigorous hospitality services are a major threat to the customers. These kinds of accommodation provide flexibility for the customers and it is available in many countries.

These kinds of alternative accommodation for travelers have already posed a big threat to the hotel industry.

Prevalent Condition

This is another threat to the hotel industry. Many kinds of civil unrest in a few of the foreign countries can harm the hotel industry to a great extent in directly and indirectly.

Worse than the Expected Economies

This is yet another threat to the hotel industry. The world’s recession would hit the business to a great extent. Disapproving interest rates and low nonrefundable income has cut the footfall in many hotels worldwide.

Instabilities in Tourists Arrival

The hotel industry depends solely on the tourist that comes from various parts of the world. When the tourist hits entry across the world, this is a big threat to the hotel industry. Various reasons could be there behind people’s travel. When people don’t travel, then it affects the hotel.

Covid-19

This is a major threat to the hotel industry. When the world goes scared with the virus and the kind of lockdown the world faces, the hotel industry is just shut and not functioning at all. This would hit its revenue as well because in such cases the duration of the lockdown is not sure. It might go for months together.

Conclusion

The SWOT analysis of hotel mentioned in this article has highlighted the main strengths of the hotel industry that comes in the form of safe stay for vacation, its contribution to the local economy, leading a source of income for many people, and high-profit margin.

Its weakness is seen in its high rates, unfavorable tax rates, and the slow implementation process.

The hotel industry sees an opportunity from the rising income of people and by providing a unique experience to the stay.

It sees a huge threat from its competitors providing similar accommodation with less rate, from a various prevalent condition like a virus spread across the world, terrorist attack, and from the instabilities in the tourist visit in the nation.