Understanding Business Organisation: A Case Study of Premier Inn Hotel

This case study delves into the organisational structure and business environment of Premier Inn Hotel, a prominent hotel chain in the UK. It highlights the hierarchical structure implemented by Premier Inn, emphasizing its advantages like clear management and defined roles, alongside drawbacks such as slow communication and high wage costs. The analysis extends to the hotel's business environment, examining both internal and external factors through SWOT and PESTLE analyses. The SWOT analysis identifies strengths in prioritizing guest safety post-COVID-19, weaknesses in financial losses due to the pandemic, opportunities in reopening regional travel, and threats from travel limitations and health concerns. The PESTLE analysis explores the impact of political schemes, economic downturn, changing social preferences, technological advancements, legal compliance, and environmental initiatives on Premier Inn's operations. The study concludes that a well-defined organisational structure and continuous analysis of the business environment are crucial for navigating challenges and achieving business goals, especially in the face of unforeseen events like the COVID-19 pandemic. This document is available on Desklib, a platform offering a wide array of study resources for students.

Understanding
Business Organisation

Table of Contents
1. INTRODUCTION.......................................................................................................................3
2. Organisational Structure of Premier Inn......................................................................................3
3. Business Environment Analysis of Premier Inn Hotel................................................................4
3.1 SWOT Analysis................................................................................................................4
3.1.1 Strengths...................................................................................................................4
3.1.2 Weaknesses...............................................................................................................5
3.1.3 Opportunities............................................................................................................5
3.1.4 Threats .....................................................................................................................5
3.2 PESTLE Analysis.............................................................................................................5
3.2.1 Political Factors........................................................................................................6
3.2.2 Economic Factors.....................................................................................................6
3.2.3 Social Factors............................................................................................................6
3.2.4 Technological Factors...............................................................................................6
3.2.5 Legal Factors............................................................................................................7
3.2.6 Environmental Factors..............................................................................................7
CONCLUSION................................................................................................................................7
REFERENCES................................................................................................................................8

1. INTRODUCTION
Business organisation assist in determining companies' structure enforced by them in
order to achieve desired targets or goals. Managing and organising people of several divisions
within an organisation helps it in operating business effectively (Vahlne and Jonsson, 2017). In
this report, the focus has been paid on structure implemented by Premier Inn Hotel to operate
management activities efficiently. Furthermore, this report covers business environment of the
hotel and how it has been negatively or positively influenced by COVID-19 by using SWOT and
PESTLE analysis. Premier Inn Hotel is one of the largest hotel chain in UK and was founded in
year 1987 by Whitbread. It has its headquarters in Dunstable, UK and has around 800 hotels with
72,000 rooms.
2. Organisational Structure of Premier Inn
Organisational structure is a technique that helps in managing activities which involves
roles, responsibilities and regulations in companies to accomplish certain goals. It also assist in
discovering how particular details flows between the various levels within an organisation
(Mukherjee, 2020). In context of Premier Inn Hotel, it implements hierarchical organisational
structure which connects different levels of management within hotel. This structure consist of
direct chain of command where top level management takes all the major decisions regarding
hotel which are then passed down to adjunct level of management.
Benefits of hierarchical organisational structure
 This organisational structure provides a clear and controlling management which helps in
managing employees properly.
 It also creates a clear format of role and responsibilities among employees.
 As there is a limited span of control which means that every manager or leader has a
small group of employees under their supervision that allows mentors to closely oversee
their workers.
 It provides more opportunities for growth and promotions which ultimately boost
motivation in employee towards their work. It gives opportunities to employees to learn management style closely from their mentor
and senior managers groom them for further profitable possibilities in career (Kostera
and Harding, 2021).

Drawbacks of hierarchical organisational structure
 As all the information of organisation has to pass through each level in chain of
command which creates a long communication pathway and the procedure become slow.
 Multiple level of management authorities slows down the process of decision-making as
each manager has different opinions regarding any issues arising in hotel.
 The wage cost is high due to several people are working in different department which
makes this structure expensive to implement.
 Employees are not authorised to make any decisions without the approval of their
mentors or managers which sometimes creates demotivation in them as they feel ignored.
 As employees feel restricted, it develops an environment where there is no creativity as
managers or leaders avoid taking ideas from them.
3. Business Environment Analysis of Premier Inn Hotel
Business environment consist of all the internal and external factors that impacts the
strategies as well as functions of an organisation. Internal factors include interior elements such
as management department, suppliers, employee and all those who are directly connected to
hotel (Struijk and et. al., 2020). Whereas, external factors include all the exterior elements such
as social, political changes, market trends and many more which indirectly influence the
functioning of hotel.
3.1 SWOT Analysis
SWOT analysis helps in evaluating capabilities, fragility, possibilities and threats
companies experience while operating businesses in market. The following is the SWOT
analysis of Premier Inn Hotel:
3.1.1 Strengths
After COVID-19, Premier Inn Hotel main priority is well-being and security of their
guests as well as employees. The hotel launched a new strict daily cleaning and sanitizing
program across all its branches in UK. By following pandemics' guidelines, it has minimized
contacts at front desk area with protective screens and implemented auto dispense hand sanitizer
all over the public areas (Abdul Rahman, 2018). The hotel is taking all the major precautions

such as providing employees all the necessary safety equipments like gloves, face masks, hand
sanitizers and aprons which creates a good image in public.
3.1.2 Weaknesses
Hospitality industry is worst hit sector by coronavirus pandemic. Due to COVID-19 the
hotel has faced financial loss in first half of financial year of about £725m. The hotel occupancy
in August 2020 was about 50% which rose in September 2020, up-to 58% but again it has fallen
to almost 50% in October 2020 (Premier Inn owner hit by £725m loss as local lockdowns dent
bookings, 2021.). As the hotel was closed, Premier Inn Hotel kept around 27,000 of its workers
on temporary furlough and almost fired 6,000 employees permanently.
3.1.3 Opportunities
For traditional regional travellers hotel bookings are reopening in UK which provides an
opportunity for Premier Inn hotel to attract more customers. The hotel is including seaside areas
which includes holiday destinations like Newquay, Brighton and Blackpool in their package
which will help it in building customer base. As people are becoming more concerned about their
health after COVID-19 hence, by providing more clean and stress- free environment to its guests
the hotel could earn their trust (Singh. and Singh, 2018).
3.1.4 Threats
Travel limitations and social distancing schemes have a major impact on the hotel
industry. These restrictions on travelling at national and international level has enhanced the
chances of losses. Fear of getting infected from virus among people has also increased which
results in reduction of their need to leisure travel. It is not been discovered yet that when the
spread of this virus will be reduced which has developed a feeling of insecurity within people
about their health.
3.2 PESTLE Analysis
It is a model which is used to evaluate external factors influencing the working and
decisions of companies (Paterek, 2018). It allows the owner to analyse factors impacting the
company from outside and helps them in modifying strategies according to that. The PESTLE
analysis of Premier Inn Hotel in explained below:

3.2.1 Political Factors
These factors includes policies, rule and regulations implemented by government within
country. In case of Premier Inn Hotel, the government of UK has announced a scheme called
“Eat out to help out” for hospitality industry in order to support them and to enhance their profit
after COVID-19. The government has also launched business support schemes like CJRS and
business loans to give financial support to hotel industry.
3.2.2 Economic Factors
Due to COVID-19 the economy of UK has been declined which has majorly impacted
businesses, employment and GDP of country (Hossain, Kibria and Farhana, 2017). The
employees of the hotel are put on temporary leaves, lock-down restrictions on travelling,
business loss of people have reduces sales and revenue of hotel. This has negatively impacted
Premier Inn Hotel as it has to bear expenses and have to maintain the decor of hotel even though
it was facing a big loss.
3.2.3 Social Factors
COVID-19 has changed all the market trend such as now people prefer to stay in those
hotels which not only provide them basic facilities but also give them additional safe and
hygienic environment. This has positively impacted the Premier Inn Hotel as it is focusing more
on security of their guests by providing them sanitized rooms and has installed sanitizers in all
their lobby areas. They also take care of their staff by providing them health insurance as well as
all the basic important equipments for their safety from virus.
3.2.4 Technological Factors
Use of digitalization has increased in the recent year after COVID-19 which has also
forced all businesses to modify their strategies to implement more technological equipments. In
case of Premier Inn Hotel, the technological factors have positively impacted as the hotel
enforced digital payment transactions, supply chain and many more technological features in
order to improve their customer services (Sedera and Lokuge, 2017).

3.2.5 Legal Factors
The legal laws related to hospitality industry in UK plays an important role as it helps the
hotels in maintaining their reputation by following rules properly (Companys and et. al., 2017).
In case of Premier Inn Hotel, it follows all the guidelines given by the government regarding
COVID-19 and has implemented technological advanced equipments to supervise activities like
data security, actions of guests in hotel, etc. in order to avoid any legal problems.
3.2.6 Environmental Factors
The environmental factors is the trending element in UK for hospitality industry. People
are becoming more concerned about conserving environment which creates pressure on
companies to reduce their impact on environment. In context to Premier Inn Hotel, the company
has taken initiatives to reduce its carbon footprints. It also provides an environment friendly
staying experience for its guests through their gardens and greenery looks which attracts more
customers towards hotel.
CONCLUSION
From the above report, it could be evaluated that for maintaining management in a
company it is very crucial to enforced right organisational structure which could further help
accomplishing certain targets. From the above analysis of the selected hotel about its internal and
external environmental factors it has been observed that at the time of COVID-19, it had faced
many financial losses due to strict lock-down restrictions by the government. It has also helped
the hotel in focusing more on the health of their employees and guests. The hotel also launched
various schemes to attract more customer base after reopening again during the pandemic. From
PESTLE analysis in this report it has been encapsulated that government of UK has also
launched various strategies to support hospitality industry after the virus outbreak. The economic
downfall has negatively influenced the hotel whereas technological trends has enhanced the
utilization of new technical equipments in hotel. In the end it can be said that for a smooth
running of business it is very important to analyse all the factors essential to avoid further
obstacles.

REFERENCES
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[Online]
Premier Inn owner hit by £725m loss as local lockdowns dent bookings. 2021. Online Available
through: <https://www.theguardian.com/business/2020/oct/27/premier-inn-owner-whitbread-
loss-local-lockdowns-bookings-profits-covid-hotel-closures>./