Premier Inn Hotel: Organisational Structure and Environment Analysis

This report provides an in-depth analysis of Premier Inn's business organization, focusing on its vertically integrated organizational structure and the external business environment. The report highlights how Premier Inn aims to deliver quality and value while creating value for stakeholders, contributing to its competitive advantage. The analysis incorporates a SWOT analysis, detailing the hotel's strengths as the largest UK brand with special offers, its weaknesses including high competition and costs, opportunities in digital marketing and brand building, and threats from private rooms and labor shortages. Furthermore, a PESTLE analysis examines the political, economic, social, technological, legal, and environmental factors impacting Premier Inn, including the effects of COVID-19, technological advancements, and sustainability initiatives. The report concludes that Premier Inn's unique strategy contributes to its success, while recommending improvements in cost management, private room offerings, and employee training to maximize potential and address threats.

Understanding Business
Organisation

Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
Organisational Structure of Premier Inn Hotel............................................................................3
Business Environment Analysis of Premier Inn Hotel................................................................4
CONCLUSION ...............................................................................................................................8
REFERENCES................................................................................................................................9

INTRODUCTION
Business organisation refers to an entity, formed by individuals, for the purpose of
carrying out some commercial activities. The entity so formed is based on certain laws and
principles that are needed to be followed by the organisation (Odeh, Green and Odeh, 2018). The
business organisation is Premier Inn that is being discussed in this report. Premier Inn is a hotel
established in London, by Whitbread. It is the largest hotel brand of UK and thus is quite famous.
Originally, it was established as Travel Inn which was then merged with a Premier Lodge.
Hence, Premier Inn is the combination of “Travel Inn” and “Premier Lodge”. Other than being
known as the largest brand of UK, Premier Inn is also known for its excellent hospitality
services. The leisure facilities that Premier Inn renders to its customers include swimming pool
and gym, except for the one at Norman Cross. In this report, there is a discussion on the
understanding of organisational structure of Premier Inn. In addition to it, an analysis of the
business environment of the hotel is also done. SWOT and PESTLE analysis are discussed in
detail to analyse the internal as well as external environment of the Premier Inn hotel.
MAIN BODY
Organisational Structure of Premier Inn Hotel
Organisational structure is a system which determines how the activities of an
organisation are directed to pursue its goals and objectives. Rules, regulations and
responsibilities are a part of such activities (Shakeel and Et. Al., 2020). Such rules and
regulations help to determine or direct the working of an organisation. Premier Inn has a unique
“Vertically Integrated Model” as organisational structure. Vertical Integration refers to a
strategy adopted where multiple levels are integrated in a vertical manner. Instead of acting or
functioning individually, authorities at multiple level, work together. in a vertical sequential
manner. The hotel, Premier Inn, aims to deliver quality & value – for – money to customers
while creating the value for stakeholders at the same time. The model helps the hotel to gain
competitive advantage over its competitors by satisfying the needs of its customers which
enables them to win customer proposition. Below is the vertical integrated model followed by
Premier Inn:

At first it comes the development and control of funds. Premier Inn select the location
where the hotel is to be established and the design and layout. Then comes the cleanliness of the
hotel. The hotel has to be made neat and clean for the customers as cleanliness is very important
in a hotel. Premier Inn is a brand of its own and regularly offer services to its customers. Then
the operations planned are executed by the management. The staff is quite efficient which helps
in maintaining a high standard at low costs. And at last it focuses on acquiring new customers
while retaining the old ones. Most of the times the rooms of the hotels, Premier Inn are booked
because of this vertical integrated model. This is the reason behind its being the strongest hotel in
UK.
Business Environment Analysis of Premier Inn Hotel
Business environment refers to the internal and external factors which affect the
company's operations directly or indirectly in negative or positive way(Kaine and Josserand,
2019). The analysis of business environment helps to understand the plans, management, desired
goals and growth opportunities or identifying various threats which may affect the organization.
SWOT Analysis
SWOT Analysis is tool used by business organisations to identify and analyse its
strengths, weaknesses, threats and opportunities (Black and Warhurst, 2021). The goal of SWOT
analysis is to make the organisation aware of the factors which can influence its business
decision making and strategy formation plans. SWOT Analysis in relation to Premier Inn is
discussed below:
Strengths
 Premier Inn is the largest hotel brand of UK with highly advertised hotels chain. Thus,
Premier Inn leads all other hotels and that is quite a big advantage for it.

 Premier Inn has several special offers for its customers, especially in online booking.
This attracts customers and also help in retaining them.
Weaknesses
 Premier Inn has high competition for its brand which make the profit margins low for
the organisation.
 Premier Inn has high costs and thus the rates are high, which is not affordable for
middle class families.
Opportunities
 In this high-tech world, where everything is available online, Premier Inn looks down to
digital marketing as an opportunity. The hotel has invested a surplus amount of funds in
digital marketing as it will help in acquiring more customers.
 By satisfying its customers needs, Premier Inn builds brand value that is helpful in
attracting new customers.
Threats
 Now-a-days private rooms are available almost everywhere. This is a threat to Premier
Inn as the customers are going there because of its budget – friendly nature.
 Premier Inn has high rate of occupancy of rooms in its hotels. This along with the
combination of wide market supply chain, causes shortage of labour in the hotels. It
could be a threat to the hotel if the needs of customers are not satisfied within a specific
time.
PESTLE Analysis
PESTLE analysis describes a framework of macro-environmental factors applied by an
organization to gain a macro picture of an industry environment (Mahabir and Pun, 2022). It is
defined as the external environmental factors that influence the organization such as political,
economical, social, technological, environmental, and legal factors.
The PESTEL Analysis in relation to Premier Inn hotel is discussed below:
 Political factors- The Political factors includes the taxes, legislations and government
policies etc. The political stability is a great strength in UK (Laurens, 2019). The
operations of Premier Inn is affected by the immigration laws, competitions and taxes.
During COVID- 19 pandemic the business of the hotel is severely affected as many

tourists has been discouraged from using the hotel facilities. To overcome the negative
impact of pandemic the hotel reduced their taxes.
 Economical factors- The UK is the sixth largest economy in the world by nominal GDP
(Valantiejienė, Butkevičienė, and Šmakova, 2022). Economies have been affected
globally by last two years by COVID-19 and it is expected that visitors and customers are
discouraged to use Premier Inn hotel because of their high pricing strategy. This may
severely affect the profits and operations of Premier Inn. In that situation some tourists
managed to book hotel because UK government provide relaxed travel advisories.
 Social factors- Social factors include the population growth, age distribution as well as
cultural conventions (Niemimaa and Et. Al., 2019). The Premier Inn hotel adding more
services for attracting the young clients into hotels such as gyms and massage parlours
etc. Therefore, Premier Inn is able to maintain broad network of customers and tourists
globally.
 Technological factors- Technological factors are those factors which includes
technological awareness and high level of innovation etc (Luthra and Et. Al., 2018).
Hacking of data privacy is riskier in the operations of the hotel. Premier Inn hotel
enhance the advanced technology such as the use of 5g networks. It helps in increase
their online bookings and online customer services.
 Legal factors- Legal factors are basically focus on laws such as labour laws, consumer
protection laws, employment laws etc (Wankhade, McCann and Murphy, 2019). The
hotel faces common legal issues in their daily operations such as online data severance
by online services of hotel . On the other hand the Premier Inn hotel has follow all UK's
laws and policies for the safety and health of the customers. The business of hotel is in
good position because it takes benefit from the UK government efforts to boost the
hospitality industry.
 Environmental factors- The Premier Inn hotel is engaged in keeping the environment
sustainable. They sets the appropriate environmental policies which makes the
environment sustainable for good business conduct. Many customers have been attracted
towards the hotel by its various services such as water-efficient showers and energy
saving lights solar energy.

CONCLUSION
From the above report, it is concluded that business organisations have its own working
style and technique. Vertical Integrated strategy is adopted by Premier Inn to make the
organisation work in a systematic and organised manner. The strategy adopted by Premier Inn is
unique in its own sense. It is because of this strategy that the profits as well as the hotels are
touching the sky. Further, the business environment of the organisation is being analysed through
SWOT and PESTLE analysis. The hotel should work on its weaknesses. For instance, it should
try to cut down its costs by removing out the unnecessary expenses. This will help the
organisation to reduce its rates to some extent. In addition to it, the organisation can set up its
private rooms as these are highly in demand. These rooms should be cheaper as compared to the
hotel rooms. The organisation should train its employees to maximise their potential. This will
help them to work more efficiently and effectively. This can reduce the threat of shortage of
labours to some extent.

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