Hotel PESTEL and SWOT Analysis

Hotel PESTEL and SWOT summaryHotel X operates in a fragmented labor givingly controlled by the guests and their preferential fatalitys. The strategic study involved analyzing the macro-environment by the PESTEL model, the competitive industry environment by the Porters quint Forces model, the key stake hairgripers expectations and the internal strengths and failinges.This SWOT synopsis concludes the strengths ( growths, stag, people, VmV and accreditation/certification), the weaknesses ( mending, classic cortege, car jeting, achievement management and technology), the opportunities (BRIC, Rugby World instill 2011, market demographics, collective right pressure, and the 90 day trial period law) and the threats (new National, Conference Centre, long-run contracts with buyers/suppliers, economy, and technology).Hotel X should plan its scheme roughly differentiation by providing the highest role products and go unique from the rest of the industry. Improving the hote ls weaknesses is a realistic way to mitigate the growth and profitability for the organization. Recommendations ar provided for the improvement of Hotel Xs weaknesses.ContentsIntroductionIf you dont bonk where your jitneyiness is going, any road will get you there. (TVRheinland Group). Business strategy is a driving force in the success of organizations as long as the strategy for the organization is analyzed in bourns of the environments. This base is a strategic analysis of the environments for Hotel X1.Company BackgroundHotel X is a leading hotel in Auckland. The work and products provided include accommodation, food and beverage, pillowcase venues, spa and health club facilities. Their aim is to grow market touch and profitability by maintaining 5 wind level function2. This is back up by Hotel Xs vision statement Know Our Guests, Build Great Memories. effort Description Definition and DriversHotel X is positioned in the high-end3hotel4industry within Auckland urban center5. The hotel industry is a sub-section of the Travel and Tourism industryone of the closely rapidly expanding field (Go Pine, 1995, p. 26). It is a fragmented industry as hotels atomic number 18 driven by the military work they provide and the consumers they arse attract. Factors that influence this consumer selection are the location of the hotel, the facilities available, the outlay per night and the size of the facility. High-end hotels in Auckland compete for independent and corporate travelers, both interior(prenominal) and supranational.Macro-Environment AnalysisThe PESTEL model was used for analysing opportunities and threats to Hotel X and the thick of the major factors can be found in appurtenance 2.(P)olitical Factors newly Zealand general elections may bring changes to government and influencing legislation.Trade agreements deplete a positive correlation with tourism. Securing trade agreements with BRIC would frame epochal growth in business.(E)conomi c FactorsWith overseas economies in recession, the declining New Zealand dollar6, the enlarge in kindle cost and the GST increase, it is more expensive for people visiting New Zealand. in that respect is a decrease in the reliance on overseas visitors and income. on that point will be short-term growth with the Rugby World Cup 2011. dapple this would only be a small injection over the months of phratry/October, there is potential for resulting growth in returning guests.(S)ocial FactorsConsumer opinions on products and services can quickly build or diminish a brand and company image. The increasing use of social media to gain access to this tuition can be dangerous to growth for companies who do non reminder and maintain brand standards.The impact of economic factors is seen in the demographics of the Auckland market. The strong short-haul markets can be a benefit as they buffer the industry during periods of significant reduction in long-haul markets (New Zealand Hotel Counc il).(T)echnological FactorsInnovation potential is held back by having to isotropy the needs of the guests verses what they are prepared to pay for. Technology does not supersede personal touches, scarce allows for storage of information on the preferences of guests. Auckland hotels need to move on their services when compared to international standards in social club to maintain consumer expectations (Hotel Technology Resource, 2011).(E)nvironmental Factors in that location is increasing pressure to be environmentally responsible. The pressure has created organizations such as EarthCheck who provide certifications to organizations meeting particular requirements7and Qualmark with their Enviro Assured Grading System8. increasingly some consumers will only engage with companies which hold particular certifications.(L)egal Factors online union negotiations will determine the requirements of the hotels towards their employees, the impact of this will be intractable after the nego tiations.The 90 day trial period in transaction law allows companies to employ people best suited for positions. The best employees in the best positions increases efficiency, productivity, satisfaction and general intimatelybeing thus reducing costs to the company.Competitive Industry AnalysisThe Porters model9was used for analysing the industry competitor for Hotel X and the summary of the major factors can be found in Appendix 9.Threat of New EntrantsHotel X has one of the grownupst function rooms in Auckland with capa city of 1500. This attracts some of New Zealands significant functions such as the upcoming Rugby World Cup Prize giving. The proposed National dominion Centre will threaten Hotel Xs long-term market share of functions. negociate author of SuppliersEmployees provide most of the service for guests. Hotel suppliers do not hold much power, there are often a broad summate of suppliers available. Many high-end hotels make believe contracts with taxi companies. The cost of switching these contracts is high.Bargaining Power of BuyersHotels provide the same item to the same market so need a strong brand to split from competition. There are bound times that customers basic needs cannot be met10.There are large numbers of corporate travelers who stay in a hotel that they have long-term contracts with. Hotel X may struggle to renew its contract with Telecom referable to Telecoms move to the lower CBD.Power of SubstitutesThe threat of substitutes depends on the demands of the customer. As most guests wanting to stay in high-end hotels are expecting quality over cost, it could be expected that substitutes to this industry do not pose a large threat.Intensity of Industry RivalryThe strong industry growth in the tourism sector (Go Pine, 1995) should mean that there is a low contender amongst hotels as there are an increasing number of guests. However, the products that hotels provide are identical on a basic level (the quality may vary) and t his low differentiation and ease switching leads to a strong competition.Stakeholder AnalysisThe expectations of the individuals and groups that influence the business strategy for Hotel X are summarized in Appendix 11.The strategy for Hotel X was developed by the director and is entwined with his personal determine his dedication to the organization ensures he retains control over strategy and growth.The guests and clients of Hotel X may see the hotel as important to them during their short term family however only the business clients and guests who are engaging with the organization on a regular basis hold any importance for quality service on a long-term basis.Attitudes of the employees are orientated around providing quality service but the importance of the hotel to them is more for the opportunity of traffic it provides.Hotel X understands the importance of the media in providing marketing opportunities however the media do not have the same inverse need.Hotel X is also no t of large importance for the local government as, while the hotel provides local taxes and jobs, it does not have any impact on the growth of local government revenue. The attitudes of this stakeholder are consistent with the hotel on factors like environmental responsibility however not consistent with profit factors.Organizational Capabilities(S)trengthsHotel Xs products hold honour between price paid and quality received. The products 411 rooms, four food and beverage outlets, spa and facilities, cardinal function venues, all set 5 star standards and are upgraded as ideas develop.There is strong marketing of the Hotel X brand in the industry as luxury and elegance. The concept is carried through media, including social media which is heavily monitored to increase positive brand awareness.The multiple ethnicities of the 400 employees mean guest communicating has become less problematic. Hotel X has used the Vision, mission and Values (VmV) to create a positive employee culture. Hotel X holds multiple accreditations including Best Hotel from New Zealand scenic Tours, Studiosus Award, and World Travel Awards, the Innovation/Sustainability Award from NZ Hotel Conference, EarthCheck Silver Status11, and Qualmark prosperous Status12.(W)eaknessesHotel X in the fastness CBD is a distance from city activities. While the hotel provides a shuttle around town, there is not the tractableness (or views) as a prime city location.The classic rooms have yet to be updated These rooms are of the same size as executive rooms but the dcor is dated and not up to the same 5 star standard as the other products provided.The hotel does not provide car pose for employees or guests except for valet parking. The city location makes it is expensive to park in nearby buildings. Public merchant marine is limited.The processes in place for military operation management are limited. Short term management is strong with comprehension programs but the link is missing to one-year rev iews/promotions, future goals are not quantified.Hotel X limits its market by not yet having wireless internet available throughout the hotel. Technology is an field of battle that would improve guest satisfaction and productivity.ConclusionThe summary of the SWOT analysis can be referred to in Appendix 12.Hotel X, seeks high levels of growth and profitability. While the product, brand and people are strengths, there is an issue keeping services consistent without good performance management. Organizations now have the advantage of a 90 day trial period to maximize the job-person fit in the organization which should correlate to lower costs and higher profitability. The location of Hotel X will place a limitation on the growth of the organization.The menstruum products that the hotel provides are strengths. The 5 star quality of these products and services create value for guests. There are some weaknesses however with the dcor of the Classic rooms, overleap of car parking and li mited use of technology. The hotel needs to remain on top of new innovations to ensure the products and services are continuously upgraded.Hotel X has the opportunity of the growing BRIC market and the upcoming Rugby World Cup. It plans to service these growth opportunities while still maintaining a hold in the domestic markets as a buffer to the threat of the economy restricting international tourism.The generic strategy that Hotel X should follow is differentiation. Already Hotel X has started to differentiate their product from the industry as supported by the strength of its accreditations and certifications. It is assertable for Hotel X to differentiate not only through the strength of its products but also its people and the Vision, Mission and Values.The strong brand and opportunity for recognition of corporate responsibility will allow Hotel X to develop a dominant position. The threat to this is the competitiveness of the industry difficulties with long-term contracts and the threat of a National Conference Centre.RecommendationsThese recommendations will focus on improving the weaknesses of Hotel X,performance management schemes for employees should be introduced to maintain 5 star standards, as services the hotel provides involve guest/employee interaction. Goals set to manage performance must be decided on jointly between organization and employee in order to empower colleagues. Special salary and wage reviews should be initiated as well as an incentive scheme based around achieving key performance indicators.The classic room product needs to be redecorated to maintain product consistency to satisfy customer requirements.Technology in particular, a hotel wide of the mark Wi-Fi system needs to be developed, to keep up with 5 star international standards.Car parking needs to be addressed by negotiating with Wilson Parking to either take back the management of the car park or rent additional car parks. The extra car parks would have to satisfy the g uest needs first.Location is one weakness that cannot be changed so the best recommendation for this is to increase the areas the shuttle bus drives to and renegotiating the taxi contract so that fares are cheaper for guests going between the upper and lower CBD.