Premier Inn Hotel Chain: Organisational Structure and Business Environment Analysis

This case study analyzes the organizational structure and business environment of Premier Inn Hotel Chain, the largest hotel chain in the UK. It includes a SWOT analysis and PESTLE analysis to evaluate the internal and external factors affecting the hotel's operations.

Level 0 Guide – Case Study
2021/2022.
Understanding Business
Organisation
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Table of Contents
1 Introduction ............................................................................................................................3
2 Organisational Structure of Premier Inn Hotel.......................................................................3
3 Business Environment Analysis of Premier Inn Hotel.............................................................5
3.1 SWOT Analysis..................................................................................................................5
3.1.1 Strength.....................................................................................................................5
3.1.2 Weaknesses...............................................................................................................5
3.1.3 Opportunities............................................................................................................6
3.1.4 Threats.......................................................................................................................6
3.2 PESTLE Analysis................................................................................................................6
3.2.1 Political Factors.........................................................................................................6
3.2.2 Economical Factors....................................................................................................6
3.2.3 Social Factors.............................................................................................................7
3.2.4 Technological Factors................................................................................................7
3.2.5 Legal Factors..............................................................................................................7
3.2.6 Environmental Factors..............................................................................................7
4 Conclusion ..............................................................................................................................8
5 Reference................................................................................................................................9
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1 Introduction
Business organisation is a formal structure which is framed by a person or some group
of persons to perform a particular commercial activity with an aim of earning profits. There
are various types of organisations dealing in different types of work such as purchasing and
distributing of goods and services, hospitality business etc. A hotel business deals in
providing facilities like food and beverages, stay, enjoyment etc. It can be said that this sector
aims at creating a feeling of welcome through entertainment and comfort (Harvey, 1980).
This is a case study on hotel Premier Inn. It is the largest hotel chain of UK having more than
800 locations. The hotel provides a supreme level of service and focuses on maintaining its
reputation. Founder of the hotel Whitbread founded the firm in year 1987 by the name Travel
Inn and in year 2004, it renamed it as Premier Inn. the pandemic has affected the profits and
sales of the hotel industry a lot which would be recovered till at-least the year 2023. This case
study describes the organisational structure of Premier Inn hotel along with analysing the
various environmental forces impacting its operations by using different techniques.
2 Organisational Structure of Premier Inn Hotel
It refers to a way in which responsibilities are delegated and the guidance is given to
various members of organisation. It decides the roles, responsibilities and accountability of
the employees. Premier Inn hotel works according to the hierarchical structure. In this type of
structure, entire business is divided in various parts with well decided roles. In this structure,
orders flows from higher to lower and information from bottom to top (Yu, Park and Hyun,
2021).
Benefits
 Loyalty among departments- In this, different sections are formed. It creates a sense
of spirit and loyalty among the members of the team which makes it sure that the
employees of Premier Inn are working towards attaining organisational goals.
 Eliminates indecisiveness- In hierarchical structure, everyone knows their duties and
none can run away from them, not even manager. It helps Premier Inn in chasing
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various actions, thus responsible person can be held accountable for any sort of
misconduct.
Drawbacks
 Creates defensive managers- It often make the leaders protective in which they
refuses to share employees of their department with manger of other team
(Kloutsiniotis and Mihail, 2020). It creates a sectional approach in minds of
employees of Premier In.
 Creates bureaucracy- Hierarchical structure creates politics in the premises of the
company which is not recommendable in changing scenarios. If Premier Inn forces to
use hierarchy for flow of data even in position when decisions are required to be made
quickly, then it will hamper the growth of the firm as information would not be send
in right time.
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Illustration 1: Hierarchical Structure, 2021

3 Business Environment Analysis of Premier Inn Hotel
It refers to collection of activities, people and the other inside and outside factors
which influence the working process of business. Few of these forces are manageable while
others are not in the control of the organisation (Pandey and et. al., 2021). It keeps on
changing, thus the hotel needs to keep an eye on the business environment so that corrective
action can be taken in time.
3.1 SWOT Analysis
SWOT Analysis is a framework which evaluates the internal environment of the
business and helps an organisation in getting best advantage of this environment. It breaks
down the various factors into the four major elements which are discussed below in context
to Premier Inn hotel.
3.1.1 Strength
Strength of a business is a force which helps it in combatting various challenges and
taking advantage of the opportunities prevailing in business environment. Premier Inn is
operating since a number of years and has earned fame through providing best deal to its
customers (Pashkus, Pashkus and Asadulaev, 2021). This reputation helps the firm in
regaining its clients after pandemic and getting same profits as it was earning earlier.
3.1.2 Weaknesses
Weaknesses are the constraints of a firm which tends to drag it backward in
competition. Premier Inn has very less number of locations and on its competitors had spread
there corporation in a wider area. This is a big weak point of the hotel as it could not take
advantage of after Covid situation in which a large number of people are planning their
vacations and demand best hotels in various countries.
3.1.3 Opportunities
Opportunities are the occasions, which a business can use for beating the competition
and developing itself. Presently, citizens of various places are going on vacations to calm
themselves after pandemic and closure. Premier Inn has chance to attract people by giving
great deals and improving their facilities (Dávid, 2022).
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3.1.4 Threats
Threat is a factor which creates trouble for company and this needs to be tackled in
time. The threat of the virus has not gone yet. Premier Inn hotel has to ensure that all the
safety measures are being taken properly. In case any case of Covid is found in hotel it can
harm the reputation and sales of business.
3.2 PESTLE Analysis
PESTLE Analysis examines impact of outer environment on working of the company,
thus various plans can be framed on the basis of results derived from this examination. The
various external factors are discussed below.
3.2.1 Political Factors
These forces analysis influence of governmental decisions on the firm. The 'Eat Out
to Help Out' strategy inaugrated by the government of UK helped the Premier Inn in
attracting more customers towards it (Soh and Seo, 2021). But the travel ban in various
countries can hinder the development of firm because it will not be able to attract customers
from various countries.
3.2.2 Economical Factors
These factors include various forces like various taxes, exchange rates, custom
charges etc. The pandemic has shaken the economy of the world and hotel industry has been
affected at a large scale. Administration can aid the Premier Inn by decreasing tax rate for
the most affected business of the country like the hotel industry.
3.2.3 Social Factors
It examines the culture and attitude of the various people including their education
level, choices, age etc. Today, maximum customers demand premium services with good
quality and the Premier Inn already deals in it which helps the hotel in attracting more
customers (Garrido-Moreno, García-Morales and Martín-Rojas, 2021). But post Covid the
demand of hotels has shown an upward trend but the firm will not be able to take advantage
of it, due to its limited global location.
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3.2.4 Technological Factors
It involves any type of innovation, research and development or any technological
change affecting the firm. Premier Inn can take the opportunity of the various automated
kitchen appliances available in the market which will improve its efficiency. Social media
platform used by the Premier Inn is helping it in increasing its popularity but it can harm its
reputation too if someone posted a negative review of the hotel (Hayri and et. al., 2020).
3.2.5 Legal Factors
These factors analysis the impact of various laws governing the operations of the
industry. Premier Inn has to follow all the rules related to nutrition and calories in its food
and beverages which in return creates value to its product. But the firm has to ensure that it
never breaches these laws otherwise it may had face some legal consequences.
3.2.6 Environmental Factors
These factors involve changing environment, pollution, weather etc. which impacts
the sales of various industries especially the tourism and food industry (Mehta, Kumar and
Ramkumar, 2021). When coming for vacations, customers wants a hotel which can provide
them a comfortable environment and Premier Inn takes care of this demand by providing
them premium services. But the threat of virus in environment is still making people reluctant
to stay in hotels.
4 Conclusion
It is concluded from this case study that hotel has suffered very much in the situation
of pandemic. But after lock down, the firm can use its experience for flipping the situation
from worse to better. Various schemes can be applied for attracting more customers and
retaining its old customers with it. Structure followed by Premier Inn is also assisting it in
getting required information in time and creating coordination among various responsibilities.
Its weakest point is that it has covered limited locations. The business should increase its
number of hotel if it wants to grow and beat the competition.
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5 Reference
Dávid, L.D., 2022. Tourism ecology (pp. 1-2). Edward Elgar Publishing.
Garrido-Moreno, A., García-Morales, V.J. and Martín-Rojas, R., 2021. Going beyond the
curve: Strategic measures to recover hotel activity in times of COVID-
19. International Journal of Hospitality Management. 96. p.102928.
Harvey, J., 1980. Business organisations and the Environment. In The Organisation in its
Environment (pp. 3-19). Palgrave, London.
Hayri, A. and et. al., 2020. How COVID-19 has transformed the hospitality, life sciences and
consumer products sectors. International Tax Review.
Kloutsiniotis, P.V. and Mihail, D.M., 2020. High performance work systems in the tourism
and hospitality industry: a critical review. International Journal of Contemporary
Hospitality Management.
Mehta, M.P., Kumar, G. and Ramkumar, M., 2021. Customer expectations in the hotel
industry during the COVID-19 pandemic: a global perspective using sentiment
analysis. Tourism Recreation Research, pp.1-18.
Pandey, J.N. and et. al., 2021. Crisis management and COVID-19: the case of budget hotels
in Muang Chiangmai District. International Journal of Society Systems
Science. 13(1). pp.71-87.
Pashkus, V., Pashkus, N. and Asadulaev, A., 2021. Impact of COVID-19 on the Global
Tourism Industry and Ways to Ensure High Competitiveness of the Territory in the
Global Tourism Market after the Pandemic. In SHS Web of Conferences (Vol. 92).
EDP Sciences.
Soh, J. and Seo, K., 2021. An Analysis of The Impact of Short-Term Vacation Rentals on the
Hotel Industry. Journal of Hospitality & Tourism Research, p.10963480211019110.
Yu, J., Park, J. and Hyun, S.S., 2021. Impacts of the COVID-19 pandemic on employees’
work stress, well-being, mental health, organizational citizenship behavior, and
employee-customer identification. Journal of Hospitality Marketing & Management,
pp.1-20.
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