Contemporary Hospitality Industry: PESTEL and SWOT Analysis

This presentation provides a PESTEL and SWOT analysis of the contemporary hospitality industry, focusing on the Intercontinental Hotel Group and Travelodge. It discusses the political, economic, social, technological, environmental, and legal factors affecting the industry, as well as the strengths, weaknesses, opportunities, and threats faced by the hotels. The presentation also explores current and potential trends in the hospitality industry and their implications.

Contemporay
Hospitality
Industry
(Task 3 & Task 4)

Table of Content
 Introduction
 PESTEL Analysis of hospitality industry
 SWOT analysis for hospitality business
 Current and potential trend in hospitality industry
 Conclusion
 Rerefences

Introduction
PESTLE and SWOT analysis are conduct to identify the impact of
macro and micro environmental factors on business operations of
Intercontinental Hotel Group. It assist management in making an
effective decision for the betterment of an organisation in
competitive market world.

Pestle Analysis On Intercontinental
Group & Travelodge
Political factor- This factor is related with the government policies which are
commenced by the government. The rate of VAT in UK is constant since last
couple of year due to which hospitality industries are capable of operating its
business activities easily and smoothly. Government in UK has been facing global
pressure pressure so that all the regulations formed by WTO for hotels cab be
fulfilled.
Positive: Operating in UK will benefits the intercontinental hotel groups to
have stable policies and norms due to which employees will be able to
perform their work in a desired manner.

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Negative: If hotel chain will operates in region which is not politically
stable then they have to change their rules and strategies at continuous
basis due to which organisational productivity will reduce.
Example 2: In political factor, Trevelodge is facing number of issues and
problem just because of trade regulation which is being imposed on
hospitality sector. This has been creating unnecessary issue for the
organisation and because of they are unable to perform better with in the
market.

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Economic factor: These factors are concerned with interest rate, economic
cycle, savings rate, inflation rate, GDP and foreign exchange rate.
Intercontinental hotels are needed to acknowledge these aspects about a
country before expanding their businesses in that region.
Positive: It will be beneficial for the concerned hotels to operate in area
where government intervention will be low. This will secure the company
from extra taxes and custom duties (Tresidder, 2015).

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Negative: If interest and inflation rates will be high in a region then
operating their will charge extra costs to company due to which
profitability can reduce.
Example 2: It is necessary for Travelodge to deliver the affordable services
to their customer so that they can be easily attracted towards hotel. Even it
will help them to reach near to their goals and targets.

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Social factor: These factors are linked with culture, values, briefs and trends
associated with a particular society. Belief of population will help
intercontinental hotel groups in understanding the needs of customers in
context with travelling and staying.
Positive: If manager of hotel will understand demographics, culture, values
of a place properly, it will benefits them in serving according to the needs
and demands of customers.

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Negative: If company is not aware about demographic, it will results in
offering those services and products to customers which are not needed or
accepted by them. It will results in revenue loss.
Example 2: Every single day, wants and desire of customer do changes due to
which it will directly impact on the the sales and revenue of Travelodge
hotel.

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Technological factor: In order to gain competitive advantage over rivals, it is
essential for business organisations operating in hospitality sector to
update their technology. This will benefits in gaining access to large
customer base.
Positive: It will help company in performing business operations in more
efficient manner.

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Negative: If organisational technology will not be implemented, customer
will change their preference toward other organisation.
Example 2: Here, if Travelodge wants to upgrade its working style by
bringing new technologies then they have to invest huge of capital and that
will directly impact on the revenue of the hotel.

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Environmental factor: Different countries have varied environmental norms
and standards. To operate in a particular region, it is vital for
intercontinental hotel groups to follow all the policies and procedures
related with environment.
Positive: Following environmental laws will benefits the company in
sustaining a positive image in market due to which sales will be high.

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Negative: If company will not follow environmental laws, customers will
deny to use their products due to which revenues will decrease.
Example 2: Here, it is necessary for hotel to work ethically without creating
any of the pollution as that will have positive impact on the customer and
local people and it will help Travelodge to sustain within the market.

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Legal factor: These factors are related with intellectual rights, patent framework
and other legal laws formulated by a company. An organisation is needed to
evaluate legal laws properly before entering a market
Positive: If legal laws will be formed, hotels will sustain a strong position in
marketplace.
Negative: if manager of hotels will not follow these laws then it will results in
payment of heavy fines and penalties.
Example 2: It is important for Travelodge to follow each and every laws which is
related to hospitality sector industry and this will consume additional time period
of the company.

SWOT analysis for hospitality industry
SWOT analysis is conducted to
identify own strengths and
weaknesses along with the
opportunities and strengths which
makes easy for the management to
make corrective decisions and
plans for the betterment of an
organisation.

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STRENGTHS WEAKNESSES
The workforce of Intercontinental hotel is
highly skilled and motivated due to large
investment in resources of training and
development of employees.
The company has achieved high level of
customer satisfaction through the dedication
of customer relationship department by
using various strategies and attained good
brand equity.
The company is planning to expand its scale
which require more investment in new
technology which require huge amount of
money to incorporate the process.
The company is not at very good in
forecasting the demand of the product which
result in missed opportunities in comparison
of competitor and end up keeping more
inventory in- house.
OPPORTUNITIES THREATS
The decrease in cost of transportation due to
lower prices of shipping results in cost
reduction of hotel group which is an
opportunity to boost the profitability.
The company possess free stable cash flow
which provide an opportunity to invest in
various segment and can invest in more
technologies with more stable liquidity.
The product which are highly profitable has
seasonal demand in nature and any event
can impact the profitability of the company.
The hotel is facing shortage of raw material
in certain global market which is a threat for
steady growth.

SWOT of Travelodge...
Strength Weaknesses
The price of are reasonable
They have huge market presence.
Advertisement polices are favourable.
Desire service are not being provided.
Polices of online booking are not beneficial.
Food facilities are not so good.
Opportunities Threats
They can plan to operate in international
market.
Can improve their services.
They can work more on advertisement.
Competition form rivalries is high.
Tax policies are not beneficial for company
because it can reduce the profit.
Negative review on food services can
reduces the number customer.

Influence In Decision Making
Conducting SWOT analysis assist management in identifying company's strengths and
weaknesses thus while taking decision for the betterment of an organisation, the
management consider the strengths of company to minimise their weaknesses and
grabbing competitive opportunities in order to achieve strong market position at
global level. For example, the company is failed to forecast the demand of the
product in near future thus it is their weakness which can be convert into strength
through making decision regarding conducting market research so that future
trends can be easily analysed. Another example of weakness is facing shortage of
raw material which can be turned into strength by using inventory management
system so that demand of their loyal customers can be fulfilled on time.

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In context of Travelodge, SWOT analysis will be very important for them
because they can prepare themselves to perform better within the market
which will directly help them to attract more number of customers towards
hotel. Even they changes the department of food facilities who can deliver
better services to guests.

Factors Effecting Demand & Supply
Intercontinental Hotel Group
In present organisation is performing really well within the market of UK and
even in its other branches but still they need to work hard to achieve its
target. Firstly, they are not good at forecasting the things that what their
customer's want and because of that they are unable to supply wants and
needs of guest whenever they want it. It will directly effect on the
profitability of the hotel.

Factors Effecting Demand &
Supply Travelodge
It is said that weaknesses is the main things which is needed to be solved so
that better results can target can be achieved but it is not that easy to fulfil
all of the demands and wants of customer. Every customer has the demand
that they must get best services but due to lack of available services they
are unable to do so which is directly affecting their image within the
market. In addition, online booking services is also directly effecting the
demand and supply of hotel.

Implication of current and potential
trend in the hospitality industry
Trend 1: The trend of hospitality industry says that wants and requirements of
customers are increasing day by day and it is necessary each of the hotel
industry that they must focus on the requirements because it helps to
attract the customers very easily:
Trend 2: In present scenario, it is very crucial for any of the organisation that
they must try to introduce the service in which they should provide the
transportation services to there customer so that they can visit from one
place to another easily.

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Trend 3: Entertainment is one of the most essential part and in present
scenario, it has been found that hotel are required to conduct some of the
sport and cultural product which makes customer relax. It is one of the
most trending things in any of the hotel industry and it must be introduced
by intercontinental hotel groups too for sustaining within the market.
Trend Evaluator: All of the above mentioned trend are relevant in context of
hotel because it helps them to perform well in future but there is huge
possibility that it will increase the overall cost of every hospitality sector
industry.

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Future trends:
Sustainability rules: It involves eco-friendly practices that are
becoming priority for customers due to reduced renewable energy
resources and scarcity of water. In this context, hotels are needed to
install solar panels so that electricity can be saved.
Need for seamless technology: Across devices and platforms,
seamless connectivity is important. Future trend in hospitality can
be offering digital concierge and customised check-in so that
comfortableness of customers can enhance.

Conclusion
From above mentioned report, it has been concluded that hospitality industry
is a wide sector that includes travel and tourism, hotels, night clubs,
entertainment place in it. Businesses associated with hospitality sector not
only contribute at global level but also offer benefits to national and
international economy. There are different operational roles in an
organisation and employees needs specific skills to follow those roles. With
the help of PESTLE and SWOT, business environment in hospitality sector
can be evaluated properly. There are current and potential trends of
hospitality that allow benefits to business organisation in achieving high
profits.

References
Huang, J., Li, W., Qiu, C., Yim, F. H. K. and Wan, J., 2016. The
impact of CEO servant leadership on firm performance in the
hospitality industry. International Journal of Contemporary
Hospitality Management. 28(5). pp.945-968.
Jones, P., Hillier, D. and Comfort, D., 2016. Sustainability in the
hospitality industry: Some personal reflections on corporate
challenges and research agendas. International Journal of
Contemporary Hospitality Management. 28(1). pp.36-67.
Kandampully, J., Zhang, T. and Bilgihan, A., 2015. Customer loyalty:
a review and future directions with a special focus on the
hospitality industry. International Journal of Contemporary
Hospitality Management. 27(3). pp.379-414.

Thank You