Strategic Hospitality Management: Premier Inn Strategic Analysis

This report provides a comprehensive analysis of strategic hospitality management within the hospitality industry, focusing on Premier Inn as a case study. It covers the principles and practices of strategic management, including leveraging strengths, communication, flexibility, increasing customer value, building brand franchise, and achieving operational excellence. The report also explores various strategic management theories such as profit-maximization, competition-based, human resource-based, and resource-based theory, highlighting their application within Premier Inn. Furthermore, it discusses innovative strategies for hospitality businesses, including hotel service optimization systems, mobile booking, personalization, and digital technologies. The strategic management process at Premier Inn is detailed, covering goal setting, analysis, strategy formulation, and implementation. The report also addresses the challenges of implementing corporate strategies in the hospitality industry and the concept of sustainability within Premier Inn. This report provides an overview of how Premier Inn has become the largest hotel brand in the UK through its strategic initiatives and operational strategies.

Strategic Hospitality
Management

Table of Contents
INTRODUCTION ..........................................................................................................................3
TASK ..............................................................................................................................................3
Principles and practices of Strategic management in hospitality industry..................................3
Theories of strategic management in hospitality organizations..................................................5
Innovative Strategies to be applied by hospitality businesses....................................................6
Strategic management process at Premier inn............................................................................7
Challenges of implementing a corporate strategy in hospitality industry..................................8
Sustainability concept in Premier inn ........................................................................................9
CONCLUSION ...............................................................................................................................9
REFERENCES..............................................................................................................................10

INTRODUCTION
Strategic management refers to the process of planning goals , procedures and objectives
so as to provide competitive advantage to the organization. It includes making optimal use of the
available resources for accomplishment of the desired objectives of the organizations
(Stoyanova., 2019). Hospitality organizations includes many fields such as Travel and tourism,
restaurants, parks, lodging, accommodation , hotels etc. Strategic management in hospitality
organizations means formulating and executing the goals and building the franchise, enhancing
customer value for customer satisfaction and achieving operational excellence to get the
competitive advantage in the industry. It involves analysis of the tourism environment for
developing the tourism business (Kandampully., 2018). The following report will cover the
principles and practices of strategic management in hospitality industry. The chosen organization
is a UK based hospitality business Premier inn that is a British service hotel chain and largest
hotel brand in UK having multiple locations like city centres, suburbs and airports. It is
headquartered in Dunstable, England serving in more than 800 hotels with almost 71000 rooms.
The report will cover the innovative strategies applied by Premier inn in strategic management
of the business. It will also cover the strategic management process and challenges in
implementing the strategies in the business. Further the report will also explain the sustainability
concept in the hospitality businesses.
TASK
Principles and practices of Strategic management in hospitality industry
The strategic management in the hospitality industry involves the efforts of top
management in establishing and implementing the planned activities within the total
environment of the organization. The hospitality businesses does not include only hotels,
restaurants, food and accommodation but also includes transportation, events and entertainment.
The hospitality businesses must follow the best practices and principles of strategic management
to get the competitive advantage in the industry. In context with Premier inn, its main strategic
aim is to provide quality affordable hotels while ensuring a positive impact on the surroundings.
The principles and practices of strategic management are explained below in this context :
 Leveraging strengths : The businesses must focus on leveraging competitive advantage
in their respective industry. They must analyse the business activities to identify what is

contributing most to the sales and profits to formulate strategies for further growth of the
businesses. They should balance it with the innovation to expand the business by
identifying new opportunities that leverage strengths and capabilities (Fuertes.,2020). In
context with Premier inn, it has expanded the business at many locations by successfully
leveraging the marketing strengths.
 Communicate : The businesses must make their employees feel that they are the part of
the process and success. They must keep their employees satisfied by taking their queries
and feedbacks regarding the operational management in the organization. In context with
premier inn, it has a large employee base consisting of almost 30000 employees at its
large number of hotels that the company has to communicate with to explain the strategic
decisions regarding operational performance and customer service.
 Flexibility : Strategic management is a dynamic and continuous process. Businesses need
to remain flexible so as to meet with the uncertainties. Hotel businesses also have to face
uncertainties in terms of change in marketing trends and dynamics. In context with
Premier inn, it had to face the impact of Brexit as it reduced the demand for its hotel
rooms by minimising the bookings specially among the business travellers outside
London.
 Increasing customer value : It is the core practice of strategic management to increase
the customers value by ensuring customer satisfaction and customer loyalty. In context
with premier inn, it attracts the customers by using Google Hotel ads to reach out the new
customers and to ensure customer satisfaction, also provide convenient booking services
through its website i.e. premierinn.com and thus ensures better implementation of
strategic planning regarding customer value.
 Building Brand Franchise : The effective strategic management helps the companies in
operational efficiency and in getting competitive advantage in the market by increasing
its brand value due to large market share as a result of successful strategic management.
In context with Premier inn, it follows effective and strong marketing and operational
strategies that has helped the company in becoming the UK's largest hotel brand.
 Achieving operational excellence : It is the execution of business strategies in a
consistent and reliable manner as compared to the competitors. It involves conduct of
activities with low operational risk, low operating costs and increased revenues

(Kviatko., 2018). In context with Premier inn, it uses various revenue management
strategies and short term growth programs that provide employees with a specific
direction such as it has gained operational efficiency in increasing its room numbers.
Theories of strategic management in hospitality organizations
There are various theories of strategic management that provide competitive advantage to
the businesses. The hotel Premier inn has become the largest hotel brand of UK by using the
successful theories of strategic management. These theories help the business organizations in
increasing operational efficiency and making the optimum use of human resources. Some of the
theories of strategic management that are used by Premier inn hotel are explained below :
 Profit-maximization theory : It is a fundamental theory and a principle that should be
used by the business organizations so as to ensure more profit. Companies apply this
theory by reducing their production costs and by charging differentiated prices for the
quality services. As a part of strategic management, this theory ensures the long-term
profitability of the company (Grant., 2018). In context with Premier inn, it is the strongest
hotel brand in the world. When the company faced staff shortages and supply chain snags
in the hospitality industry, it raised the prices of its rooms due to the inflation so as to
ensure profitability by reducing operating costs.
 Competition-based theory : This theory states to maximize the long-term profit and
develop sustainable competitive advantage over the competitors in the industry. It
suggests the businesses to make decisions based on the competitive advantage at all
levels i.e. national, corporate, local and individual (Makadok.,2018). In context with the
hotel premier inn, it is a global organization that attracts customers from various
countries. Also the company has many international as well as national and corporate
level competitors such as Hilton hotels, The Plazzio hotel, Holiday inn, Easyhotel etc.
But its unique ownership operating model provides the company with growing at faster
pace than the competitors by delivering a strong customer experience.
 Human Resource-based theory : In the strategic development, this theory focuses on
human resources and involves the factors like motivation, working environment ,
organizational culture and desires of human resources etc. It emphasises on ensuring
employee satisfaction and productivity in the organization to ensure long-term
profitability. In context with Premier inn , it has a large employee base of more than

30000 employees at various locations. The hotel needs to ensure positive and healthy
working environment for its restaurant staff, accommodation staff and room managers to
achieve more productivity in the operational activities.
 Resource-based theory : This theory states that the ownership of resources should be
valuable, inimitable, rare and non-substitutive. It puts emphasis on finding the sources of
competitive advantage by ensuring optimum use of the resources. In context with Premier
inn, its resources include tangible assets like hotel room bedding, dining at the restaurants
and intellectual resources like management skills that front desk staff has. So it must get
the competitive advantage by making bets possible use of its internal resources.
Innovative Strategies to be applied by hospitality businesses
Innovation in hospitality industry has major importance as its activities and processes are
diverse and it requires technological and non-technological innovation so as to get competitive
advantage in the industry. In context with Premier inn, the innovative strategies to be applied in
the organizations are explained below :
 Hotel service optimization systems : This system facilitates the hotel staff in using
smartphones to receive the tasks and to discuss maintenance issues and ask for any real-
time information. In context with premier inn, it uses the Central Reservation system and
Property management system to get innovative advantage in the hospitality industry.
 Mobile Booking : The hospitality businesses must use mobile booking for developing a
large customer base using the digital technology. It will facilitate the company in taking
more bookings and ensuring competitive advantage in the hospitality industry (Presenza.,
2019). In context with hotel Premier inn, it uses Amadeus for the booking system and
also offer convenient booking through its website.
 Personalisation : It refers to adapting the marketing strategies for enhancing the
customers' experience. Businesses must use this innovative strategy to ensure better
interaction with the customers. It will ensure an effective response to their needs. In
context with Premier inn, it uses personalization to interact with the customers and by
taking their feedbacks and responding in an effective manner that is providing
competitive advantage to the company due to the digital innovation in the company.
 Digital technologies : Now a days, the hotel businesses are using The Internet of Things
to exchange the data. It facilitates the hotels in saving energy costs and optimising the

hotel rooms (Martín-Rios. 2019). In context with Premier inn, it uses digital technology
in demonstrating the services, hotel structure and amenities at the hotels to attract
customers and it also demonstrates the destination sites and travel agencies that it has
strategic alliance with to make overall experience of the customers effective. By
influencing people on the social media, it attracts a huge audience to its suites and
accommodation.
Strategic management process at Premier inn
Strategic management process involves dealing with the strategic objectives of the
organization. It includes development of the vision of the organization, identifying its operational
objectives and implementation of the organizational strategies. It facilitates competitive
advantage by providing the company with steps of implementation of operational strategies. In
context with Premier inn, the strategic management process is described hereunder :
 Goal setting : It is the first step of strategic management process. It refers to clarifying
the vision of organization that includes both long and short-term objectives and the
process by which the objectives are to be achieved (Chofreh., 2021). It also includes the
persons tasked with the implementation of activities planned and that are responsible for
better productivity of the business. In context with Premier inn, its goal is to maximise
profit and increase market share in the hospitality industry, getting competitive advantage
by the combined contribution from internal resources, hotel staff and the company has
ensured successful accomplishment objectives so far.
 Analysis : It involves collection of information that is relevant for the accomplishment of
strategic objectives for the organization. In this, businesses analyse the market needs and
evaluate the internal as well as external information to measure the impact on the goals of
the company. In context with Premier inn, it analyses the strategies of the competitors
such as Easyhotel, Holiday inn etc. to compare with own and get competitive advantage
in terms of introducing innovation in the business like Central Reservation systems and
Hotel service optimization systems.
 Strategy Formulation : It refers to choosing the appropriate course of action for
realizing organizational goals and objectives. This process is used for resource allocation,
prioritization , wide alignment of organization and validation of business goals. It
involves competitive as well as functional strategies formulation. In context with Premier

inn, it formulates its competitive and functional strategies regarding hotel management
and customer service. The company also uses strategic management tools such as
Strategic evaluation, SWOT Analysis for effective formulation of business strategies.
 Strategy Implementation : It is imperative to understand the strategic objectives as well
as planning for everybody in the organization so as to facilitate effective implementation
of the strategies. In the hospitality industry, everyone in the hotel staff must be clear
about their tasks and responsibilities right form the top executives to the employees
working at front desk. In context with premier inn, it has multiple locations of hotels at
airports, suburbs etc. that have large workforce, so the company can use virtual
interaction with the employees to make them understand about the strategic policies of
the business to facilitate their successful implementation.
 Evaluation and Control : After implementation of the strategies according to the
planned objectives, the performance appraisals should be initiated to ensure whether the
tasks are being implemented according to the planned strategies ( Fitriyah., 2019). In the
hospitality industry, it is of huge importance to monitor the activities of diversified staff
to increase their productivity and get competitive advantage. In context with hotel
Premier inn, its evaluations are mainly excel-based and time-consuming because of its
large and diversified workforce.
Challenges of implementing a corporate strategy in hospitality industry
The hospitality industry is one of the most contributing sector to the national as well as
international economy. It is also a fast growing sector but has been observing many challenges.
Regarding technology and personnel management, trends and customers' expectations. The
industry is growing rapidly and businesses are striving to go with the increasing demand. In
context with the hotel Premier inn, the challenges in implementing corporate strategies are as
under :
 Lack of Vision : Sometimes businesses are unable to clearly define the vision and
mission to the organization that leads to hindered operational performance. So hospitality
companies must use data and information to create vision and mission according to the
strengths , weaknesses and risks of the organization considering the competitive factors
as well. Premier inn has overcome this challenge by giving the company a vision of

expansion and has expanded at many locations in UK and planning to penetrate other
markets as well.
 Technology Implementation : Over the years, in the hospitality industry, the technology
trends like self-check ins, contactless service, online ordering and payment through the
apps are emerging day by day. It is a challenge for the hospitality industry to provide
good customer experiences by technology enabled interactions (Japutra., 2021). In
context with Premier inn, it must have a back-up system to be prepared for any issue of
technology. To overcome this challenge, it must enhance the automation process while
conduct of operational activities.
 Reputation management : The hospitality industry is striving to establish the interaction
with its customers by using online platforms and obtaining the reviews of customers by
ratings and comments. Reviews and comments can ruin the image of the company raising
the demands of certain platforms for the companies to maintain their reputation in the
hospitality industry.
 Retaining Employees : The high employee turnover rates impact successful
implementation of planned strategies for the businesses. In the hospitality industry,
workers quit their jobs after working with the company for a very short period of time. In
context with Premier inn, it must use rewards and recognition programmes and other
performance appraisal tools to ensure retention of the employees in the organization.
 Personalization : The businesses must strive to develop personalization with the
customers to get the understanding of their need ad expectations with the company. This
information will help the company in getting knowledge about the past buying habits of
the customers and their interests that will facilitate some promotions by the company to
its specific customers. But now a days, the companies in hospitality industry are facing
this challenge in strategic management of the business.
 Loyalty programs : It is one of the top marketing strategies to get returning customers.
The businesses in hospitality industry face the challenge of competition to attract loyal
customer base and in implementing the loyalty strategies. Also, some customers do not
participate in a system that has complex accessibility (Ervina., 2021). In context with
Premier in, it has many big competitors that also share the customers in the same industry

creating a competitive pressure to the company in terms of loyalty base. The competitors
include holiday inn and Easy hotel.
Sustainability concept in Premier inn
For business organizations, sustainability refers to meeting the needs of current and
prospective customers without compromising with the resources to retain them for future
generations (Gonçalves de Almeida and et. al., 2022). In context with hospitality industry,
sustainability management plays a crucial role in terms of preserving the natural resources ad
conserving the cultural heritage to persuade tourists or customers to visit the destinations and
take the services in tourism industry (Setiawan., 2018). The hotel businesses must also contribute
to the sustainability by reducing their negative environmental impact by green best-practices ,
services, logistics, etc.
In context with Premier in, it has also taken steps towards sustainability by ensuring the
elimination of single-use plastics from its hotels and restaurants. As part of sustainability, it
ensures that all its pillows, beds and duvets at the accommodations are recycled ad not sent to the
landfills. It also ensures energy savings at the hotel premises. The company is also striving to
recycle the coffee disposals as a sustainability measure to protect the environment. As it serves at
many locations in UK, it is also promoting cultural heritage there. The company is also taking
steps towards removing the endangered species form all its menus at every hotel location.
CONCLUSION
From the above discussion, it has been concluded that strategic management plays a key role
in every business organization. In the hospitality businesses also, it has a crucial role by
providing the hotels and tourism businesses a vision to achieve and by implementing appropriate
strategies for successful achievement of that vision. Every business in the hospitality industry
must follow the principles and practices of strategic management such as flexibility, customer
value etc. to get the competitive advantage in the industry. The theories like competition-based
theory has been discussed to provide the competitive advantage to Premier inn. The hospitality
businesses must follow the correct process of strategic management for implementation of
strategies formulated for operational efficacy in the business. The businesses have been facing
some strategic challenges in the hospitality industry like lack of vision , personalization etc. that

they must strive to overcome by using appropriate digital technologies. The hotel Premier inn
has contributed to sustainability by raising concerns towards elimination of single-use plastics.

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