Hospitality Business Strategy: Impact of Internal and External Factors on Travelodge

This report analyzes the impact of internal and external factors on Travelodge's strategic planning through SWOT and PESTLE analysis, McKinsey’s 7s Framework, Porter's Five Forces Model, Porter's Generic Strategies, and Ansoff Matrix. It also discusses stakeholder analysis, sustainability, and competitive analysis.

Hospitality Business
Strategy

Table of Contents
INTRODUCTION................................................................................................................................3
MAIN BODY ......................................................................................................................................3
Stakeholder's Analysis-....................................................................................................................3
PESTLE Analysis-...........................................................................................................................4
SWOT Analysis-..............................................................................................................................5
McKinsey’s 7s Framework-.............................................................................................................6
Porter's Five Forces Model-.............................................................................................................6
Porter's Generic Strategies-..............................................................................................................7
Ansoff Matrix of Travelodge-..........................................................................................................8
Strategic Planning of Travelodge-...................................................................................................8
Sustainability and Competitive Analysis-........................................................................................9
CONCLUSION ...................................................................................................................................9
REFERENCES ..................................................................................................................................11

INTRODUCTION
Hospitality refers to the welcoming of guests, strangers or any visitors in a friendly manner. It
is generally related to the services of restaurant, hotels, drinking and food services, etc. When
someone offers any services to another individual in return of any value is it considered as
hospitality. This is mainly classified into two categories- one is known as lodging industry and other
is related to food and beverages sector (Ali, and Anwar, 2021). Lodging industry is also known as
accommodation industry. Travelodge Hotels Private Limited operating as Travelodge is a hospitality
company with its headquarter located in Thame, United Kingdom. This report is about the impact of
the internal and external factors which affects the strategic planning of Travelodge by doing SWOT
and PESTEL analysis. For determining the competitive advantages of the hotel, Porter's Five Forces
has also applied on Travelodge and discussion on identifying the different strategic direction which
are available to the hotel and about Porter's Generic Strategy, Bowman's Strategy Clock is discussed
in this report.
MAIN BODY
Stakeholder's Analysis-
In hospitality industry, stakeholders comprise of local people and companies, media,
employees, competitors, etc. Stakeholders are divided into several parts on like primary and
secondary, direct and indirect, external and internal. They have different role and importance in the
performance of the hospitality industry. For doing the analysis of the stakeholders of the
Travelodge, company needs to determine their main stakeholders who have great impact of the
working of management, arrange them according to the preferences and later on try to understand
the demand of these stakeholders (Cerchione, and Bansal, 2020). By taking the example of local
people, company can easily hire individual in case of need and promoting the local society will help
in restoring the growth of the Travelodge, they can connect with various local retailers and
promoting the talent of the people which results in increasing the mouth marketing by the people.
Media also helps in getting the response of the people and for the promoting the offerings by the
company to the wide area. Travelodge's image is directly related and affected by the kind of relation
they will maintain with their stakeholders. By considering and following the ideas of stakeholders

will benefit Travelodge in acquiring its objective. Internal stakeholders of Travelodge will help the
organisation by taking important decisions related to various function of the organisation, they help
in building the productive workforce for the company. They also help in creating changes related to
boosting the morale and confidence of the staff which helps in making them more efficient in their
working and also providing them opportunity to grow and develop in their field. Customers as a
stakeholder will help you to identify the lack of facilities and what changes has to be done
according to the change in preferences or behaviour of the customer for the maximum consumer
satisfaction. Company should pay attention to their stakeholders by daily communication and
organising meeting with them to understand their expectations from the company. By doing the
analysis of the stakeholders Travelodge can find out the risk possibilities in the functions and also
helps in picking out those stakeholders who may affect management activities in adverse way.
PESTLE Analysis-
 Political Factors- The interference of government bodies in the functioning of any business
is not avoidable. Government of any countries may impose such rules and regulations for
the business and companies which are operating in the specific location and companies have
to fulfil their obligations (Cerchione, and Bansal, 2020). For the security of the information
issued by the customers, Travelodge has issued a message that they will be liable and
completely responsible for the data of their customers under the implemented act by the
government.
 Economic Factors- Tourism industry in United Kingdom has been experienced series of
recession but very less people went for the holiday in foreign countries before this situation.
With the growth of 120000 new jobs in the year 2011 helps in brightening the employment
rate in the tourism sector. Increment has been shown in the domestic trips and holidays from
5.6% to 12.6%, because of the people who avoid foreign trips.
 Social Factors- Since company is getting different opinions from the users through online
platforms, Travelodge focuses on fulfilling their duties which are related to the societies by
for maintaining good image in the eyes of customers. By taking the company and operating
it on social media platform, the firm can take the advantage of getting more customers but
must focus on the comments which are given by the users as it can affect the company's
goodwill. The decisions related to the taking innovative steps for the room designs and
renovation programme inside the hotels could be the great marketing strategy for the
company.
 Technological Factors- Now with the use of modern technology, customers can easily place

their orders and do booking for the hotels of Travelodge and it also helps in reducing the
cost of operations by replacing the manpower of the hotel.
 Environmental Factors- Environment plays an important role in choosing the hotel
location, people generally prefer to go at those hotels in which the climatic condition is very
pleasant and Travelodge needs to establish their hotels in such holiday locations where they
are able to get maximum visitors.
 Legal Factors- Travelodge needs to take initiative to fulfil all its legal duties and perform its
operations in limitations of the laws and do not carry out such activities which are against
laws.
SWOT Analysis-
 Strengths- For the booking of the rooms, either it is for family or only for one person and
the values offered by Travelodge is budget friendly for the customers who visit there. They
also provide various offers and deals on different occasions and use of different promotional
techniques to attract the customers are some of the strategies of the company (Dawes, 2018).
They also initiate some programmes for their special customers like Travelodge Business
Account Cards, this helps the company to compete its rivals, keeping this aside, Travelodge
has major activeness with the offering of hundreds of amenities to its customers all around
the UK, which enables them to reach the customers from different locations and helps in
developing the customer base.
 Weaknesses- For a company, its weak point is the issues which are related to its operations,
safety, quality of goods and services which they are issuing to the consumers. Travelodge
has been unable to provide its maximum services and goods to its customers because of
friendly budgeted offering.
 Opportunities- This includes the possibilities through which company has chances to grow
and develop its business in the long run. By taking part in environment protection program
and creating awareness related to this among the guests who came in contact with the
company.
 Threats- Due to heavy competition in the hospitality industry, Travelodge needs to develop
some innovative strategies to develop its business more. On the other hand, due to its limited
operations in some parts of UK and Ireland, very few people know about the existence of
the company.
Internal strength and weaknesses of the company-

Strengths Weaknesses
Uniqueness. Limited Budget.
Flexible Prices. Lack of facilities.
Good ambience
and food.
Negative reviews
from online sites.
Better services
to customers.
Less salary to
staff.
McKinsey’s 7s Framework-
 Strategy- The business strategy which is followed by Travelodge is that they focus on the
value, quality and kind of services they are providing to the customers. They are trying to
attract the maximum amount of customers by representing Travelodge as best budget hotels
and will offer such deals which enables the saving of money (Johannsdottir, and McInerney,
2018).
 Structure- Travelodge is a private limited company which is controlled by a general
manager and one assistant manager. Under them various individuals have been hired for
controlling different departments like for accounting, sales, marketing, human resource, etc.
Two divisions which are related to food & beverages and rooms, various other section come
under these two sections.
 System- Appointment of technological officer is an example related to essential step for the
advancement of technology taken by Travelodge. This will help Travelodge in growing
digitally and functioning of company will take place more efficiently.
 Style- It defines the type of leader which is handling the management activities, the manager
of Travelodge company should focus on giving opportunities to the staff for developing their
interpersonal skills and provide efficient services to the guests.
 Staff- Travelodge consists of thousands of staff contributing in the proper functioning of the
hotel. Proper training has been given to the them related to their communication, behaviour
and of services they will offer to the guests.
 Skill- General manager of Travelodge should concentrate on developing the various skills
such as team spirit, flexibility in working, proper management of time, communication etc.
 Shared value- Travelodge has been working with a mission of providing the cost effective
travel experience to their customers. They promote the value of trust and respecting their
guest which helps in creating a good customer base for the company.

Porter's Five Forces Model-
 Competitive Rivalry- Amount of competition in the hospitality industry is very high
because the less expenditure on product differentiation and cost related to the shifting of
customer form one hotel to another. Consumers always look for the hotels which are in their
budget and at same time also provide good services (Kelliher, and Harrington, 2018).
 Supplier Power- The power of suppliers to control the hospitality industry is low, because
of this hotels are able to make more revenue as they do not have to pay more on the supply
for the goods and services.
 Buyer Power- The power of customers to take the prices down in hospitality industry
depends on the type customers they are attaining. The power of customer to bargain with
Travelodge will be high if they are in group or from the customer who accounts the high
percentage of their revenue, but in case of single customer the bargaining power is generally
very low.
 Threat of Substitution- Availability of substitutes in hospitality industry is very much,
customers can find various hotels in every locality who provide services in same price.
Several hotels provide wide variety of price range and good facilities for all type of
customers, this will help them to invite the guests from every income level. Travelodge
should focus on making some innovative plans to compete such substitutes in the market.
 Threat of New Entry- The cost for the establishment in the hospitality industry is relatively
high from the other sectors. Company must take care about that the return they will get on
their investment should be high and they should make the proper utilization of given
resources. Travelodge should be aware about the new entrants because they can use the
strategy of low cost and low for attracting the customers.
Porter's Generic Strategies-
This model will discuss about the profit earning power of Travelodge in the hospitality
industry-
 Cost Leadership Strategy- In this strategy, the main aim is on decreasing the cost price of
the services provided by the hotels and control the market, apart from this, they can also
offer the facilities on the average price of the industry to raise the profit against the
competitors in the industry. (Kudinova, and Golovanova, 2018).
 Differentiation Strategy- Implementing new productive ideas for managing the activities in
hotels which makes Travelodge unique to their rivals. Company can provide special offers to
attract the customers, they can redecorate their hotels, can provide good quality of services

which are able to create differences between Travelodge and their rivals.
 Cost Focus Strategy- In this strategy Travelodge focuses on particular segment of
customers in the market and provide the quality of the products or services by lowering the
cost, this will help the company in becoming the cost leader in the hospitality industry and
gaining the trust or loyalty of the consumers.
 Differentiation Focus Strategy- This strategy is about the concentration on the specific
segment of the customers and offering them exclusive services like spa or meditation
facilities. Travelodge can offer these facilities to their customer who will come after the long
travel and can make them feel better (Salazar, 2018).
Ansoff Matrix of Travelodge-
 Market Penetration- This includes offering of current product and services by the hotels in
the market. Travelodge is planning to open new branches of their hotels in different in UK,
they are also planning to introduce new varieties in their menu for the customers, this will
the company in taking the advantage of more acquisition in the market share.
 Product Development- This strategy is about the introduction of new and innovative
product in the current market, like Travelodge has taken the step to increase the
sustainability by using the carpets which are made up by recycling the fishing nets and
plastic bottles, they are also trying to use the lights which consume less energy and showers
& taps which are controlled by detecting motions (Li, and Liu, 2018).
 Market Development- This strategy is related to the expansion of the product in the new
market. Travelodge is emerging in different nations of the world like Spain, Ireland, New
Zealand, Australia, it will assist the company in reaching to the customers of other countries
and increasing the earning.
 Diversification- In this strategy, new products are offered in the new market through this
company can get new customers and increase their profitability in the new market.
Travelodge can use this strategy by growing vegetables which will use in cooking, providing
special facilities like packages for tour to their customers and much more.
Strategic Planning of Travelodge-
For getting the success, which other successful hospitality companies are experiencing with
the growing period of time, it is important for Travelodge to stay updated with the technologies and
strategies which are revolving in the hospitality industry. In present time, changes in the application

of marketing strategies and functions of the management or accepting the new digital technologies
are all important for the growth of any company. By this working in the hospitality sector will be
more efficient through which companies are able to provide better experience to their customers and
can generate more profit in the long run (Madsen, and Grønseth, 2022). By taking the example of
increasing use of artificial intelligence which results more use of machine on a regular basis by
different companies in hospitality industry, employing robots for the customer services is very often
in many hotels. Many hotels use of virtual reality technology for their product's promotion, these
type of techniques helps in making the visibility of product more real.
Travelodge can make use of such trends for the functioning of their hotels, during the time of
pandemic when people used to do avoid contact, company can use robots as their room services for
attaining the guests in the hotels. Travelodge helps the customers in saving their time by using the
online method of payment. Introduction of key cards will be cost effective technique for
Travelodge, these keys also act as a marketing tool for the company and various other information
such as room service, Wi-Fi can be shared to the customers. Travelodge can also use various online
platforms for promotion of their hotels and for getting reviews of the customers (Pekovic, 2021).
Sustainability and Competitive Analysis-
Travelodge has taken various step related to the environment, several programmes has been running
for number of years. Use of aerated shower heads and taps for avoiding the wasting of water, uses
of such lighting in the hotels which are energy efficient and installation of smart meters for
observation of energy used in a single day (Putra, 2020). Travelodge also focuses on using the
rainwater for the irrigation purpose and introduced several other green technologies to promote the
sustainability.
CONCLUSION
The above report is the detailed discussion on the hospitality industry, in which Travelodge is taken
for the determination of various factors which can affect the working of the hospitality. In report,
analysis of stakeholder for Travelodge has done, which is helpful for knowing the importance and
impact of the people who are involved in the company. For measuring the effect of different macro
factors on the functioning of Travelodge PESTEL analysis has also conducted, along with this, 7s
model and porters 5 forces also used for the evaluation of internal structure of the company and
finding the competitiveness of Travelodge respectively. Various other model has also implemented
on the Travelodge for identification of strategic planning should be used by the company for the
smooth functioning of management and its steps taken for checking their sustainability.

Many other hospitality companies available in the market which are able to give competition
to the Travelodge, Premier Inn Hotels and Holiday Inn Express are one of the examples. Company
need to take some measure to avoid the competitive threat from these rivals. Like Premier Inn have
very limited hotels which are restricted to few nations, so Travelodge has opportunity to expand its
working in different countries which enables company to gain competitive advantage by increasing
its market share and profit ratio against Premier Inn.
REFERENCES
Books and Journals-
Ali, B.J. and Anwar, G., 2021. Porter’s Generic Competitive Strategies and its influence on the
Competitive Advantage. Ali, BJ, & Anwar, G.(2021). Porter’s Generic Competitive
Strategies and its influence on the Competitive Advantage. International Journal of
Advanced Engineering, Management and Science, 7(6), pp.42-51.
Cerchione, R. and Bansal, H., 2020. Measuring the impact of sustainability policy and practices in
tourism and hospitality industry. Business Strategy and the Environment, 29(3), pp.1109-
1126.
Cerchione, R. and Bansal, H., 2020. Measuring the impact of sustainability policy and practices in
tourism and hospitality industry. Business Strategy and the Environment, 29(3), pp.1109-
1126.
Dawes, J., 2018. The Ansoff matrix: A legendary tool, but with two logical problems. But with Two
Logical Problems (February 27, 2018).
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Kelliher, F., Kearney, A. and Harrington, D., 2018. Managing innovation in the hospitality micro
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& Society, 8(2), pp.159-178.
Kudinova, I. and Golovanova, T., 2018. Event tourism in Ukraine as part of the hospitality industry.
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Li, Y.Q. and Liu, C.H., 2018. The role of network position, tie strength and knowledge diversity in
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Madsen, D.Ø. and Grønseth, B.O., 2022. PESTEL Analysis. In Encyclopedia of Tourism

Management and Marketing. Edward Elgar Publishing.
Pekovic, S., 2021. Green pull motives and overall tourist satisfaction: a macro-and micro-levels
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Putra, F.T., 2020. Peranan Departemen Food and Beverage Product di Hotel Travelodge Batam
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