Hospitality Business Strategy

This report discusses the impact of macro environment on hospitality business strategy and how to improve competitive edge and market position based on the outcomes. It also evaluates different types of strategic directions available to the organisation. The report includes PESTLE and SWOT analysis, VRIO framework, Porter's Five Forces model, and strategies to improve competitive edge.

Hospitality Business
Strategy

Table of Contents
INTRODUCTION...........................................................................................................................1
PART 1 ...........................................................................................................................................1
Analyse the impact and influence of the macro environment on a given hospitality
organisation and its strategies by applying appropriate frameworks such as PESTLE and
SWOT analysis............................................................................................................................1
Critically analyse the hospitality macro environment to determine and inform strategic
management decisions................................................................................................................3
Analyse the internal environment and capabilities of a given hospitality organisation using
appropriate frameworks such as the VRIO Framework..............................................................3
Critically evaluate the internal environment to assess strengths and weaknesses of an
organisation’s internal capabilities, structure and skill set..........................................................4
Applying Porter’s Five Forces model, evaluate the competitive forces of a given market
sector for a hospitality organisation............................................................................................5
Devise appropriate strategies to improve competitive edge and market position based on the
outcomes.....................................................................................................................................6
PART B ..........................................................................................................................................6
Evaluate the different types of strategic directions available to the organisation....................6
Applying a range of theories, concepts and models, interpret and devise strategic planning for
a given hospitality organisation. This will involve an explanation of the strategic planning
process in your chosen organisation, and an explanation of the corporate, business and tactical
strategic priorities and objectives. ..............................................................................................7

Produce a strategic management plan that has tangible and tactical strategic priorities and
objectives.....................................................................................................................................8
CONCLUSION................................................................................................................................9
REFERENCES..............................................................................................................................10

INTRODUCTION
Hospitality business strategies are the set of the business strategies which works in enhancing
the functions and the operations of the of the hospitality sectors organisation. This can be
implemented by the business owners and the managers of the organisation. These strategies
include different objectives which include enhancing the brand value, increasing customers
value, achieving excellent operational functioning and being represented as the good corporate
citizens. It is very important to implement the effective hospitality business strategies in respect
to identify the motive and direction in the organisation. It produces better vision for the
employees of the organisation which helps in providing better understanding about their working
and the job role. There are different types of the strategies which help organisation is their
succeeding plan such as establishing influential technology, makes effective use of social media,
building partnership with the local business, involves guest feedback and many more. The report
is being made in the context of Hotel Premier Inn London which is a largest chain and hotel
brand in the UK serving best to their customers (Abdolshah, Moghimi and Khatibi, 2018) . The
aim of this report is to highlight the impacts of the micro environment on the organisation with
strategies to improve it. It also evaluates internal environment with application of VRIO
framework. It also elaborate the competitive forces and the strategies that improves market
position. Part 2 evaluates types of strategic directions and the strategic management plan which
provides various advantage to the organisation.
PART 1
Analyse the impact and influence of the macro environment on a given hospitality
organisation and its strategies by applying appropriate frameworks such as PESTLE
and SWOT analysis.
The micro environment comprises larger societies forces that effects the working of the
organisation in various ways such as economically, politically, technically, naturally, on the
basis of the competition, cultural forces, in demographic ways and many more. These all the
forces that impact the decision making and working structure of the organisation. The impacts of
the macro environment can be discuss with the implementation of the PESTLE analysis on the

organisation. PESTLE analysis are the studies of the prime elements of the external factors
which make major impact on the working and functionality of the organisation. The analysis are
discussed below:
 Political factors- These are the elements that relates with the government intervention on
the economy and its effects on the organisation. The factors are tax policies, labour laws,
trade restrictions, tariffs and many more (Akindayomi, Aktas and Amin, 2020) . In the
context of Premier Inn hotel the organisation get effected by the governmental policies
such as decrement in the corporation tax over the last few years results in increment in
the profits of the hotel.
 Economic factors- These are the elements which very effectively help in the growth of
the organisation. The rates and the prices of the commodities affects the discretionary
income, purchasing power and selling power of the organisation. In the context of the
Hotel Premier Inn, financial crises in the UK brings recession which causes large scale
problem in the hotel in respect to manage employees.
 Social factor- These comprises the factors which impact the lifestyles of the people. Its
the people preference which impact the working or the organisation as different people
belongs to different cultures and they associate with the organisation which represent
their culture. As hotel Premier Inn relies mainly on the tourism, so they have to target
people in accordance to the seasons or on the basis of the cultures.
 Technological factor- This includes the techniques and the information and
communication resources which impacts on the products, services, marketing and e-
commerce technologies of the organisation. How an organisation sell its services,
interact with their customers, compete with competitors all depends on the technological
factors. In the context of the Hotel Premier Inn, with the increment of the utilization of
the technology and internet browsing the functioning of the hotel becomes easy as they
can communicate and promote their services more easily and frequently with covering
large audience.
 Environmental factors- This include the impact of the natural factors such as population,
environment, sound and parasites and many more. These are uncontrollable factors and
can be beneficial or disadvantages for the organisation. In the context of the Hotel
Premier Inn, change in the climatic conditions positively brings significant change in the

organisation. Closing of the different networks and cancelling of the flights can cause
losses to the hotel as well.
 Legal factor- These are the factors which make changes in the business regulatory
environment of the organisation. Industry regulation by following all the rules and
regulations helps in better management in the organisation(Alanzi, 2018) . In the context
of the Hotel Premier Inn, the current change in the legalisation increases the minimum
wages of the employees. The hotel also need to comply with all the health and safety
requirement of the employees.
Critically analyse the hospitality macro environment to determine and inform strategic
management decisions.
Hotel Premier Inn operates its business in the UK. Having high competition in the business
creates the requirement of implementing the strategic planning which enhances the functioning
of the Hotel. With the help of the PESTLE analysis the weaknesses and the strengths of the Hotel
Premier Inn evaluated. The external environment comprises environmental, legal, social,
political, economic and social factors which impacts the organisation. Hotel Premier Inn is
having expertise in fresh food, drinks and positive and effective ambience which makes it unique
from competitors. Their high profit generation is due to their luxury services(Gholami and
Seyyed-Esfahani, 2019) . The organisation focuses most on targeting customers who are more
inclined towards tourism and exploring different places.
Analyse the internal environment and capabilities of a given hospitality organisation
using appropriate frameworks such as the VRIO Framework.
An internal environment of the organisation comprises elements within the organisation such
as existing employees of the organisation, management of the company, corporate culture and
the behaviour of the employees. These elements affects the working of the organisation and
builds the positive or negative culture in the organisation. The internal environment analysis of
the Hotel Premier Inn are evaluate through the implementation of the VIRO framework which is
discuss below:
VIRO framework- This framework brings the analysis of the organisation on the basis of 4
elements which measures the success of the organisation and evaluate business functioning more
effectively. The four elements are value, rarity, imitability and the organisation which is discuss
below:

 Value- This establish the particular needs and requirements in the product and services of
the organisation which increases their value in front of customers. This highlights the
demand of the services with is specialized in the organisation. In the context of the Hotel
Premier Inn, they are very effective in quick and quality services with all the luxury
amenities.
 Rarity- It comprises the availability of the important resources and how these resources
are accessible to the organisation and to the competitors. Rarity in the working and in the
resources in important because it brings variety in the operations (Poretti and Blal,
2020) . In the context of the Hotel Premier Inn, they are making themselves unique by
building the image which is kid friendly and bike-friendly with multiple free services
such as free Wi-Fi and complimentary drinks and many more.
 Imitability- It is the framework which is quite similar t the point rarity but generates the
ability of the competitors in respect to copy your solutions and business model. This can
be handle by making increment in the value of the business as well as brand. In the
context of Hotel Premier Inn, they have established a value and the procedure in their
working which if easy to imitate but organisations are failed to get as popular as the Hotel
Premier Inn have.
 Organisation- It states that how internal business operations and the structure of the
organisation brings success. This is the final stage in the VIRO framework which brings
sustainable competitive benefits. In the context of Hotel Premier Inn, they have
established various techniques which motivates the employees in effective as well as
efficient working, The internal working structure can be implemented with proper
guidance and leadership.
Critically evaluate the internal environment to assess strengths and weaknesses of an
organisation’s internal capabilities, structure and skill set.
The internal environment of Hotel Premier Inn is very strong and effective which brings
several advantages and brings the organisation on the top. The SWOT analysis of the hotel
Premier Inn are mention below:
Strengths
The strength of the hotel includes variety of
services both the offline and online which is
Weaknesses
The hotel Premier Inn does not enjoy the its
global presence and does not compete with its

easily accessible by the customer. They are
also implemented environment friendly
activities and operations.
competitors. The hotel is not effective in terms
of implementing new technologies as other
hotels do.
Opportunities
There are multiple opportunities such as
merger with other hotel which enhance their
functioning. Implementation of the digital
marketing for promotions and making use of
technology. They should also commercialize
their customer experience.
Threats
Increasing competition and the technology is
the possess the major threat. As with the rapid
increment in the competition other hotels
increasingly implement the technological
aspects and Hotel Premier Inn also need to do
in terms of standing in market.
Applying Porter’s Five Forces model, evaluate the competitive forces of a given market
sector for a hospitality organisation.
Because of the recession in the past , travel and tourism business affects all over the world and
faces decline in the activities and operations. After suffering from the major loses and blows ,
hotel industry are managing to bounce back in the market with more power(Senbeto and Hon, A
2020) . With the help of Porter's five forces model, it becomes easier to analyst the hotel
industry and it also provides solution to deal with the certain situation.
 Competition in the industry- The competition in the hotel industry is very intense as cost
of the product differentiation and the cost of implementation is not high. That's why
business requires effective implementation of the plan which makes Premier Inn different
from others. They should cut some prices and implement some more technological
upgradation.
 Potential of the new entrants into the industry- These industry is characterized as huge
capital cost which decides the status of the hotel. And they have to make sure that the
cost they implemented is worth in gaining. The new entrants have to start from basic
from target market to build image. That's why Hotel Premier Inn are not competing with
new entrants.
 Power of suppliers- The power of suppliers are possibly low because hotel industry only
requires labour, trained staff as the hotel industry has the huge demand of it. Hotel

Premier Inn are not subjected to make any bargaining power of the suppliers as it
indirectly makes pressure on competition. That's why hotel Premier Inn have a cost
advantage over its rivals and they can be innovative in their functions.
 Power of buyers- The hotel industry is subjected to high power of buyers as these
industries are run by the only people and its not necessity its an luxury. People exercise
their power when purchasing room in the bulk. Hotel Premier Inn needs to implement
some differentiation in the approach which attract more and more customers.
 Threat of substitution- This threat is low in the hotel industry. Except the situation where
customer looking for the low price accommodation. As the hotel is well imaged and have
the capability to provide their customers with best amenities in the affordable prices.
Devise appropriate strategies to improve competitive edge and market position based on
the outcomes.
There are bundle of strategies which Hotel Premier Inn can apply in respect to generate an
competitive advantage and enhance the market position. Some of the strategies are given below:
 Creation of authentic relationship with guests- Listening to the customers and generate
their feedbacks improves the working of the hotel(Shulga, Busser and Bai, 2021) . As
reviews builds last longing relationships and highlights new opportunities.
 Streamline direct booking- Giving quick and easy booking experience to the customers
consume their less time also it is more trusted than book a hotel through agents. Travel
booking services are new strategy to improve market position.
 Stay ahead with high tech technology- Staying on top with innovative technology effects
the customers. As customers find easy assess in their each and every step which attract
them more in Hotel Premier Inn.
PART B
Evaluate the different types of strategic directions available to the organisation.
The strategic directions can be available with different types of the techniques and methods
from which an organisation can take guidance in their working. With the implementation of the
Porter' s generic strategies Hotel Premier Inn can generate some effective approach of
functioning.

Porter' s generic strategies provides 4 generic methods which classify organisation behaviour and
their way of working.
 Cost leadership strategy- It is the concept of focusing on reduction on the cost of
delivering the products and services to the consumer with making sure that organisation
generate appropriate profit. In the context of Hotel Premier Inn, they have to make some
changes in their costing and make it more affordable.
 Differentiation strategy- This states how a business can differentiation in the functioning
which makes it different form other competitors (van Rheede and Lim, 2020) . By
implementing some changes in the marketing and the approaches business can make its
working different from others. In the context of Premier Inn , they have to make changes
in the pricing and implement some innovation techniques.
 Cost focus strategy- Its a cost focus strategy which helps in evolution in the cost of the
product and services. Hotel Premier Inn should increase the cost where they are providing
an exception services and the area of common services should need to be low cost.
 Differentiation focus strategy- This strategy states that business should focus on more in
evolution of the differentiation strategy as analysing aspects and enhancing working will
benefit the organisation by making its different from others.
Applying a range of theories, concepts and models, interpret and devise strategic planning for a
given hospitality organisation. This will involve an explanation of the strategic planning
process in your chosen organisation, and an explanation of the corporate, business and
tactical strategic priorities and objectives.
Strategic planning is the procedures in which the leader of the organisation defines the vision
and the objectives of the future. Its a guidelines to track business goals. The aspect of strategy
development comprises following aspects some of it are discussed below:
 The mission- Strategic planning gives the Premier Inn sense of purpose and direction.
As it provides what an organisation need to achieve in the future on the basic of their
current working.
 Alignment of short term goals- The long term goals can be achieved by the organisation
through basic and small steps. Strategic planning help[s the leaders of the Hotel Premier
Inn to make decisions aligning the,m with long term goals.

 Evaluation and revision- Strategic planning provides great help to the management in
respect to evaluate plans and making changes and adjustments in accordance to the
conditions. Hotel Premier Inn should revise their strategy and where they are lacking
they need to implement strategies.
There are various steps in the strategic planing process which is discussed below:
 Identify- it starts with the evaluation of the current position of the business and this is the
place where stakeholders implement their plans(Vieira and Ferreira, 2020) . This
assessment can be done by implementing SWOT analysis and many other theories.
 Prioritise- The next steps is the evaluate what company needs to achieve and in
accordance to tat they have to deal with the activities and the tasks. Planning prioritise
the important and relevant ones.
 Develop- This the implement the planning process on the basis of prioritising activities.
This involves development of the numerous business plans that fits in the framework of
overarching strategy.
 Implement- Once the plan is developed and its the time to implement plans which
requires effective communication with the set of responsibilities. Implementation
majorly includes strategic management with the strategic reviews and make sure that the
plan goes on on track.
 Update- A strategic plan is reviewed as per the priorities and the revalued goals as
conditions of the business change and new opportunities emerge. Updating planning and
procedures accordance to them makes working efficient.
In the context of Hotel Premier Inn , Strategic planning offers the types of guidance which
brings transparency in the business working, and the hotel need to implement it in accordance to
achievement of goals.
Produce a strategic management plan that has tangible and tactical strategic priorities and
objectives.
Strategic planning produces the long term planing for the achievement of the broad plans that
can be achieve by the individual and the ream. Where as tactical plan is short term steps and the
actions which a business implement in respect to achieve objectives laid down by strategic plan.
Tactical plan includes various components which breaks down long term goals and makes the
time oriented short term goals. Generally these targets are achievable in next three months and

six months(Zahari and Romli, 2019). These tactical plans helps in achieving more customers in
the Hotel Premier Inn as providing services the wide range of customers is what the objective of
hotel.
CONCLUSION
From the above report it is concluded that hospitality business strategy is the key strategies
which helps industries in many different ways as it builds business image, enhance the customer
value, achieving great operational services and makes a company a good corporate dealer. This
report is being made in the context of Hotel premier Inn and its working. This evaluates the
influence of the macro environment on the organisation with the helps of PESTLE and SWOT
analysis. This further explains the competitive forces of the organisation by implementing
porters 5 forces model which provides information about the market. Adding to that Part b
evaluates the types of strategic directions available for the organisation with porter's generic
strategies. At last it explores the strategic business processes with tactical strategies.

REFERENCES
Books and Journals
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Evidence From the Hospitality and Tourism Industry. Available at SSRN 3539942.
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Shulga, L.V., Busser, J.A. and Bai, B., 2021. Hospitality business models, customer well-being
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van Rheede, A. and Lim, A., 2020. Understanding Corporate Responsibility in the Hospitality
Industry: A View Based on the Strategy-as-Practices. In Sustainable Hospitality Management.
Emerald Publishing Limited.
Vieira, E. and Ferreira, J., 2020. What generic strategies do private fitness centres implement and
what are their impacts on financial performance?. Sport, Business and Management: An
International Journal, 10(3), pp.317-333.
Zahari, A.R. and Romli, F.I., 2019. Analysis of suborbital flight operation using
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