Business Health Check Report: Premier Inn Hotel Performance Analysis

This report conducts a comprehensive business health check of Premier Inn, a leading UK hotel chain. It begins with an analysis of the company's objectives, mission, and vision, highlighting its brand strength and market position. The report then delves into the internal and external factors impacting the business, utilizing PESTLE, SWOT, and Porter's Five Forces analyses to assess the political, economic, social, technological, legal, and environmental influences, as well as Premier Inn's strengths, weaknesses, opportunities, and threats. Furthermore, the report determines potential improvements using the Ansoff matrix, exploring strategies for market penetration, product development, and market development. The report also addresses the evaluation of current skills of management and staff and provides justification for plans for the development of management and skills.

BUSINESS HEALTH
CHECK

Table of Contents
INTRODUCTION...........................................................................................................................1
1.1 Analysis of Objectives of Business.......................................................................................1
1.2 External and Internal factors impacting business ................................................................3
1.3 Determination of potential improvements in the business organization ..............................6
D1 Contribution of the elements of Ans off matrix ...................................................................7
M1 Analysis of objectives as per SMART criteria.....................................................................7
M2. Effectiveness of the business contribute to the sustainable growth....................................9
2.2 Plans to improve the businesses............................................................................................9
M2 Evaluate the effectiveness of areas of business..................................................................11
D2 Analysis of plans that can lead to improvement in the business.........................................11
3.1 Evaluation of current skills of management and staff.........................................................11
3.2 Justification of plans for the development of management and skills................................13
M3 Analysis of current experience, skills and abilities of management and staff...................14
D3 Evaluation of various methods used to develop management and staff skills....................14
CONCLUSION..............................................................................................................................15
REFERENCES .............................................................................................................................16

INTRODUCTION
Business Health check plays a vital role in depicting effectiveness of organisational
activities on the basis of changing business environment. This assist the firm in outlining
strength and weakness of entity which aid in deriving potential areas of improvement in order to
manage successful business operations. The present study is based on Business health check of
hospitality firm that is Premier Inn which is on the strongest hotel brand of UK. The report will
outline internal and external factors of hotel which aid in developing understanding over present
business condition of hospitality firm. Further, the focus of assessment in on outlining potential
improvement of Premier Inn on the basis of business plan will be developed. The plan will be for
improvement and therefore will comprise details like, sales, marketing, productivity, financial
management system, quality, risk assessment, etc.
On the other hand, assignment will focus on training and development for employee
management on the basis technical, operational and managerial skills of staff and management.
The need of training will be outlined with the help of Skill audit which will be evaluated with the
help of Swot analysis. At last, report will frame plan for training and development for reskilling
and Upskilling needs of employees on the basis of improvement plan of business.
1.1 Analysis of Objectives of Business
Premier Inn is one of leading Hotel Chain of Britain and largest hotel brand of with more
than 785 Hotels and 72000 rooms. The hospitality organisation operates at different location like
airports, suburbs, city centres, etc. Mission of hotel chain is to provide guest warm welcoming
experience with friendly teams and by luxurious hospitality services like, ensuite bathrooms,
Freeview with Television, Kind Sized beds, etc. Vision of company is to gain pride on services
by focusing quality and comfort of different types of Guest.

Figure 1: Brand Strength Index score
(Source: Gilliland, 2017)
Current business position of Premier Inn reflects that its strongest hospitality chain and is
also ranked in Brand finance. The firm is given 88.7 Score for Brand Strength Index which
denotes sustainability if its operational, strategies and quality if services. As per consumer
confidence and familiarity Premier Inn has infiltrated mind set of guests for whom hotel is a go-
to-brand. However, priorities of hotel brand are focused on pledge which is providing great night
sleep by focusing on real comfort of guest (Gilliland, 2017). Also, priority of management staff
of organisation is providing value for money experience to guest as it creates direct influence on
visitor’s satisfaction. Priorities of hotel chain are focused on striking a balance between quality
and value of hospitality services as guest expectations.
Short term objectives of Premium Inn Hotel brand are, putting 15 million Pound behind
multichannel campaigns to break the mould of hotel sector. Further, hospitality organisation
focuses on ongoing professional development of employees to manage continuous improvement

in employees’ skills and abilities. The training sessions are organised quarterly in financial year
on the basis of which employee performance and interest is evaluated. However, long term
objectives of Hotel Premier Inn are to create Uniformity in rules of management and
administration. Also, long term plan is to improve standard of hospitality services by
interchanging personnel assistance in staffing of company (Kim and et.al., 2014).
1.2 External and Internal factors impacting business
There are various internal and external factors affecting Premier Inn hotel, these factors can be
analysed by using various models such as Pestle analysis, Porter’s five forces and SWOT
analysis.
PESTLE Analysis
 Political: There are various political factors such as government taxes, rules and
legislations which are highly influencing functions and activities of Premier Inn hotel. In
relation to governmental influences, corporation tax has declined in the last few years in
order to see a rise income or profit. Increase in VAT from 17.5% to 20% since the year
2011 has negatively affected the hotel’s appeal of increasing price became unavoidable
(Mak and Chang, 2019)
 Economical: The financial crisis in 2008 dropped the UK into recession, creating a wide
range of issues for the organisations, but the economic disaster conveyed some benefits
for Premier Inn hotel. Budget hotels can be viewed as an inferior good, & hence during
period of recession, demand of services provided by Premier Inn may rise. It can also be
less influenced as compared to superior high-end hotels.
 Social – Social factors in the business environment plays a major role in every
organisation and related activities. Premier Inn highly relies upon tourism external and
well as internal, seasonal holidays such as Christmas, Bank Holidays and Easter are
essential dates which Premier Inn targets due to individuals being expected to spend more
money in these periods.
 Technological – With the increase in use of computers, availability of mobile
applications and internet browsing have increased the visibility as well as ease of
utilisation of Premier Inn hotel. The rise of advertisements, social media and particularly
viral marketing has developed more methods of targeting a large particular audience with
cost effectiveness.

 Environmental – Climate change globally may have a great impact on Premier Inn hotel,
In January 2014 was a typically month on record, and due to continuous flooding, many
transport services were disrupted, specially the rail networks.
 Legal: Recent change in legislation has led to a rise in minimum wage by 12p in
October 2013. In addition to this, Premier Inn are forced to comply with health & safety
legislation and provide equal opportunities within employment.
SWOT Analysis
 Strengths of Premier Inn
1. Profitability – With an occupancy rate of more than 80% and an operating profit
increased by 7.4% in 2017 to £468 million, Premier Inn is one of the most profitable and
successful hotels in United Kingdom. Though, the first quarter in the 2018 was not much
in favour of the hotel due to the capital investment in real estate properties, décor,
refurbishment, cladding and many more.2. Brand Image – Premier Inn hotel has developed an impressive brand image over the
years. Bike-friendly and Kid-Friendly image along with free Wi-Fi 24/7 has always been
a great selling point for the hotel. It is also rewarded as the best economy hotel brand at
the British Travel Awards 2017 for the 7th repeated year (Williams, 2018).
 Weaknesses of Premier Inn
1. Limited global presence – Limited global presence is a major weakness of Premier Inn
Hotel, as compared to other strong competitors in the market Premier Inn hotel operates
in a limited number of nations.2. Big issues with Hygiene – An undercover filming by channel 4 reporters in February
2018 identified housekeeping staff hired by Premier Inn utilising the same guest towels
for cleaning the entire bathrooms, consisting the toilets.
 Opportunities for Premier Inn
1. New decor – Various properties have been trying an upmarket room décor and design
which is a great surprise to guests in the budget hotel segment. During the year 2018, an
agreement has been given to an organisation of contractors for completing floor renewal
and tiling.

2. New market – After entering successfully entering in Germany, Premier Inn is finally
getting into the republic of Ireland which has already realized the achievement of Costa
Co0ffee Brand.
 Threats
1. Legal threats – There is a high risk of legal issues and actions against Premier Inn hotel
due to various issues mentioned within the above discussion. It can negatively affect the
hotel if it does not take appropriate steps.
2. Competitors – There is a strong competition to Premier Inn hotel from Marriot while the
main competitors of the organisations are Ibis, Easy hotel and Holiday Inn
Porter’s five forces
1. Competitive rivalry – Rivalry among the existing competitors in an industry plays an
important role in lowering or increasing the prices and profitability of the industry. Premier Inn
hotel operates in highly competitive rivalry.
2. Threats of new entrants – New entrants within the hotel or hospitality industry brings
innovative and unique strategies of doings things and put pressure on Premier Inn hotel, through
lower strategy, providing new value propositions to the customers and reducing costs. Premier
Inn hotel needs to manage all these issues or challenges & create effective barriers to protect the
competitive edge of the hotel.
3. Bargaining Power of suppliers – Most of the organisations in the hospitality or hotel industry
buy their raw material a wide range of suppliers. Suppliers in leading position or power can
reduce the margins of profit earn by Premier Inn hotel in the market. Higher bargaining power of
suppliers can lower the revenue or profitability of the hotel (YI, Thawornwiriyatrakul and Bi,
2018)
4. Bargaining Power of buyers – Buyers are generally demanding a lot, they need to buy the
most profitable and best offers available by paying minimum price as possible. This led pressure
on profitability of Premier Inn hotel in the long run.
5. Threats of substitute products or services – When any new service or product meets a similar
customer requirement in distinct ways, the profitability of the organisation or industry gets
negatively affected. For example – services such as Google drive and Dropbox are substitute to
storage hardware drives. The threat of a substitute service or products is high if it provides or
offers a value proposition that is different from current offers of the industry in a unique way.

1.3 Determination of potential improvements in the business organization
To determine the potential improvements in the business organisation the Premier Inn can
use Ans off matrix for increasing its market share as well as profitability along with productivity.
Premier In can grow in terms of employees, customers etc. and there are various ways to do that
by identifying four matrices of Ans off matrix. It will allow the manager of the hotel in analyse
growth strategy and the compare the risk associated with them. As the manager moves in next
quadrant, the risk increases. The strategies that can be adopted by the hotel are :
Market penetration- It is the strategy in which the hotel can sale its existing services in
the existing market. It is the least riskiest strategy and focuses on growing the customer base in
existing market. Under this the hotel can invest more marketing of its current services like hotel
rooms and accommodations etc. and can offer discount to attract and retain more customers. The
hotel can maximize its distribution channels by offering attractive deals to the customers.
1. Product development – This strategy deals with developing and selling new
products and services in the existing market. Premier Inn can launch new services
in the existing market to increase the value of the hotel in the eyes of the
customers. It is riskier than market penetration as there is a huge possibility that
the customers do not like the new services but on the other hand it is beneficial as
the hotel do not have to search for potential customers. As the services are
launching in existing market it saves the cost and time (Yang, and et.al., 2018).
Market development – It means selling existing product and services but in new market.
This strategy focuses on reaching to new segments of customers or expanding operations and
providing services to customers that reside outside the UK. This strategy can be used by premier
Inn only when services of the hotel is really likeable by the customers and the hotel is doing
exceptionally well in the market. It then has the potential to target more countries like Asian
countries, middle east region etc. the Hotel can use Eclectic paradigm to help the hotel in
determining how to enter into foreign markets.
Diversification – It is the most riskiest strategy and needs to be given a lot of time and
attention in case if they want to choose diversification strategy for the hotel. This strategy is
about entering into a new market with the new products that are unrelated to each other from the
services that is company's already offering. It can either be horizontal or conglomerate
diversification in which the horizontal deals with entering into a new market with a new product

which is somewhat related to the company's existing services like providing laundry services to
the customers other than who are residing in the hotel (Urbanos-Garrido, 2016). On the other had
the conglomerate diversification deals with introducing products which are unrelated to existing
services offered by premier inn in new market like introducing medicines in pharmaceutical
industry to avail more opportunities.
D1 Contribution of the elements of Ans off matrix
Among all the strategies the hotel can choose diversification strategy which the riskiest
one but as the Premier Inn hotel has a brand reputation and large customer base along with have
its operation working abroad can introduce new product. It can enter into an unfamiliar market as
the reputation of the hotel is high ans will help in creating a base of customers. It also earns high
profit therefore launching a new product or services would not be a problem for premier inn.
This strategy will help the hotel in having a well-balanced product portfolio which will decrease
the whole risk.
M1 Analysis of objectives as per SMART criteria
In accordance with long term and short-term objectives of Premier Inn it can be said that
specifying objectives on basis of SMART specification assist in deriving whether organisational
plan is specific, measurable, realistic and achievable. For example, short term objective of
Premier Inn is based on improving employee’s performance by organising continuous training
session. The objective is realistic because the session will be organised by management on the
basis of changing business environment and employee skill audit. Further, the objective is time
bound because training for employee will be organised on quarterly basis that in a period of 3
months (Schuler and Jackson, 2014). However, performance of employee will be evaluated at the
end of financial year at the time of appraisal which make plan measurable and achievable. Apart
from this long-term objective of premier Inn is focused on improving standard of hospitality
services by creating uniformity in rules of management and administration. This long-term plan
is achievable because the management will aim at making regular alteration in policies and
practices on the basis macro environmental factors (Silva and et.al., 2019). Further success of
changes will be measured by audit of management book and by annual report presentation where
firm will present all the amendment made in management plan and administration.

2.1 Reviewing the effectiveness of the business
Business effectiveness refers to the efficiency with which organisation is able to meet its
goals and objectives (Banks and et. al., 2017). This means that company is productive and it is
the capacity of the industry to produce the desired outcome with a minimum expense of material
and human resources, money, time and energy. The effectiveness of Premier Inn can be
understand through;
Products and Services: Premier Inn is a leading hotel chain and provide various
products and services to the potential consumers that are unique and innovative in compare to the
competitors. For example; rooms, conference halls, spas and salons, lounge, pool and fitness
rooms, etc. Restaurant of the brand are family friendly and comfortable (Page, 2015). Along with
it, they also provide rooms and in-hotel services in various price range so that all the consumers
from high income to moderate income can afford and enjoy holidays. This specific thing make
them different from others and make the business more effective.
Marketing: The promotional tool used by the hotel chain aims to attract new consumers
as well as to retain the existing guests. Premier Inn was the first budget hotel chain in the UK
that invested in prime time television advertising. Premier Inn use from traditional to modern
marketing techniques that adds more effectiveness to the business for achieving their aim to
attract consumers, they also have attractive company's website from where guests can seek
necessary information (Cao, Duan and Li, 2015). The brand have made substantial investment in
both mobile app for smartphone booking and in its main website. Apart from that it has also been
analysed that Premier Inn provide innovative products and services and to aware consumers,
company regularly market their product that enhance business effectiveness.
Sales and Finance: The financial system of Premier Inn is quite strong through their
innovative products and attractive marketing this result in high sales. The affordable rates of the
services and products also boost the sale. Online and digital promotion drive the significant
proportion of booking of the brand. As per the ending year of 2018, the revenue of the brand
calculated by £3286.1 million that clearly stated the effectiveness of the business (Page, 2015).
After they invested in and developed their website and mobile app that drive their sales and
enhance the financial flow.
Staffing: Premier Inn has effective staffing strategy mainly follow external recruitment
that help the brand to fill the vacant position and allow new innovative minds in the industry that

drive the effectiveness of business (Cao, Duan and Li, 2015). Along with it, business also
provide proper training, rewards that enhance the motivation of the workforce and make them
able to meet consumer satisfaction effectively. For encouraging staff, company provide them
tangible-intangible rewards, appreciation for their outstanding performance.
Business image: The brand image build by the company as budget hotel chain across the
world and generally known by the consumers as affordable travel and hotel services provider.
The mission of the company also stated that they want to being the market leader in the budget
hotel chain with their excellent services. This year, 89% of premier Inn hotels achieved by
Tripadviser award for consistently achieving outstanding guests reviews. Along with it, the brand
also promote sustainable tourism that enhance the effectiveness of the business (Page, 2015).
Premier also rewarded by Best Leisure and Best Budget Hotel chain.
M2. Effectiveness of the business contribute to the sustainable growth
The present effectiveness of the business contribute to the sustainable growth and
development of the hotel chain. In the current market, affordability of the products is in high
demand and consumer also demand the quality that effectively serve by premier Inn. This ensure
that the company is fulfilling consumer's need and growing effectively. The build business image
of the brand contribute to the growth in the selected budgeted hotel chain market in UK and
across the world. Marketing allows company to aware public regarding their products and
services that enhance their interest and increase the sales. If products and services of Premier Inn
can be as per the changing and dynamic demand of the market and consumers that help the
business to develop effectively. The area of business which requires effectiveness is the training
to employees as the employees need to be trained properly in understanding the new concept of
online website. They need to be well trained to understand how it works. It requires a lot of data
to understand the factors that can attract the customer. With the help of online website, they can
analyse the traffic they are getting in the form of customers to avail the services of the hotel
which can include spa, rooms etc. therefore effective on job training would be the best way to
make training effective in the hotel.
2.2 Plans to improve the businesses
Business plan are the systematic procedures which provides a direction to a business
which can plan future and can help in avoiding uncertainties. It is written document that descries
the nature of the business and tells the business about its statement base on profit and loss. It

helps the company in having retained earnings, high customer base, increased profits etc.
Premier Inn is focusing on developing official online website which will help it in attracting
more customers and hence will increase the profitability of the hotel.
Objective
To increase the base of customers via developing online platforms
Vision
The vision of the hotel is : Recognised as unique in the industry for fulfilling the promise
where guests become friends
Mission
It offers preferred destination of choice which will offer professional, flexible hospitality
services to the customers.
Business plan
Planning marketing- it is a blueprint that will help premier inn in making efforts in
marketing which will ultimately increase sales. As the idea is launching online official website to
attract more customers therefore firstly it will need to collect information related to the
destinations and countries in which it offers its services. Along with that it will have to need
information abut the food and other services like spa, swimming pool, other special packages
that it will offer to its customers. Based on this information it will make a plan of creating an
official website (Ismail, 2016).
Sales productivity- Sales productivity is the rate at which sales team of the hotel create
revenue for the organization. Sales department of premier inn is highly focused on changing their
sales process to attract new customers and developing new site will help the ales team to attract
customers via online website which will reach to wide audience and will save their cost and time
after it gets implemented.
Financial management system- For the purpose of developing online website, the hotel
will also install financial management software to manage and govern through-traffic come form
the website which will give clear idea to hotel that how much revenue did the new website
generated.
Role of staff and management – For this purpose the staff of the hotel needs to be fully
trained which will incur cost and efforts but it will be beneficial for future purpose. The role of