Premier Inn Hotel: Business Environment Analysis Using SWOT & PESTLE

This case study analyzes Premier Inn's business environment and organizational structure. It highlights the company's functional organizational structure, detailing its advantages and disadvantages, and conducts a SWOT and PESTLE analysis to evaluate the external and internal factors influencing Premier Inn's performance. The SWOT analysis identifies strengths such as a large customer base and standardized services, weaknesses including high prices and market dependence, opportunities for acquisitions and digital marketing, and threats from budget hotels and economic downturns. The PESTLE analysis covers political, economic, social, technological, legal, and environmental factors, revealing both favorable and unfavorable conditions impacting the hotel chain. The report concludes that Premier Inn's strengths can be leveraged to capitalize on market opportunities while mitigating threats, and that external environmental factors significantly influence the company's profitability and operational activities.

Understanding Business
Environment

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
Organisational structure of Premier Inn Hotel............................................................................1
Business Environment Analysis of Premier Inn Hotel....................................................................2
SWOT Analysis..........................................................................................................................2
PESTLE Analysis........................................................................................................................3
CONCLUSION................................................................................................................................5
References:.......................................................................................................................................6

INTRODUCTION
The global business environment is operating within the competitive business
environment. As result of the COVID-19 the most affected business sector of the global business
environment is the hospitality industry. The famous and leading hotel chain Premier Inn is the
part of this industry (Betti and Sarens, 2020). The Premier Inn is the part famous British
hospitality expert Whitbread PLC and is headquartered in United Kingdom, The company is the
largest hotel chain and is operating with 800 hotels all across the UK and other countries of
globe. The Premier Inn hotel was founded in 1987 and was established with a purpose to
compete with Travelodge. The hotel contain more than 72000 rooms and 800 hotels. The hotel
serves the customers with great food, comfortable and luxury accommodations and much more.
The present report is the case study of Premier Inn and will discuss organisation structure of
Premier and will also conduct environmental analysis using SWOT AND PESTLE framework.
TASK 1
Organisational structure of Premier Inn Hotel
The organisational structure is the systematic framework that outlines how organisation is
managed and conduct all its activities in order to attain organisational goals. In the hotel chain
like Premier Inn there are multiple departments and all have their unique roles and responsibility
towards the mission and vision of an organisation (Yu, Qian and Zhang, 2021). Therefore, the
Premier Inn Hotel has a functional organisational structure. This organisational structure refers
to the type of structure in which organisation is divided into teams or departments on the basis of
their specialities and daily functions. In Premier Inn hotel there are multiple departments such as
front office, marketing, finance, human resource, kitchen department etc. all these divisions are
the part of the company's organisational structure. All the departments of the Premier Inn
perform different task and actions into their area. The departments contribute their efforts to
attain organisational goals of Premier Inn. These departments are the team based functional areas
that are controlled and guided by the supervisors. This functional organisational structure has its
own advantages and drawbacks to the Premier Inn Hotel that are discussed underneath:
Advantages
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 With the compliance of this organisational structure the Hotel is able to provide the
employees a clarity of the roles and responsibility therefore, it becomes easy to reach the
certain goals at time (Raziq and et. al., 2020).
 Premier Inn Hotel is huge hotel chain of UK and has large of employees and different
operations. Therefore, through functional organisational structure it become easy for an
hotel to manage all the their activities smoothly without any confusion and also the
monitoring of performer of each employees becomes convenient.
 By adopting this organisational structure the Premier Inn Hotel is able to improve and
facilitate the higher productivity and profitability within an organisation as the employees
work dedicatedly in their teams and also the achieving goals become easy when work
related to it is distributed in different areas.
Disadvantages
 The communication between the employees of different functional areas get minimal that
become a major cause of barriers or silos in the functions and also the misunderstanding
or miscommunication is arise between the functional areas of the Premier Inn (Gillam
and Cosford, 2021).
 The another drawback of this functional organisational structure to the Premier Inn is the
inhibiting of the collaboration and innovation as when the less diversified people work
together they don't have much to share and collaborate with each other.
Business Environment Analysis of Premier Inn Hotel
SWOT Analysis
Strengths
 The biggest strength of Premier Inn Hotel is that it has the largest customer metric in the
market of UK hospitality industry. This gives the company an advantage to earn high
profits after Covid-19.
 The Premier Inn has highly standardized rooms and food service that provide the
customers a unique and satisfactory experience (Woods and et. al., 2020). This means the
everyday efficiency of the Hotel is inimitable factor that is beneficial during Post Covid-
19.
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Weaknesses
 The Hotel is luxury and high priced service provider which is weakness of company
because at the time Covid-19 when the economy dropped so does the disposable income
of customers the company was facing issue of low sales. The Premier is highly depended on the UK market and is not well elaborated in other
international market this has impacted the business of the Hotel at the time of Covid-19.
Opportunities
 The Premier Inn is the huge Hotel brand and is well recognised this gives an opportunity
to the Hotel as the result of Covid-19 to make acquisitions and mergers with the other
company of the same or different industry in order to gain other market opportunities
(Rutti, Garcia and Helms, 2021).
 The Premier Inn is known for it direct digital distribution therefore, company holds and
opportunity to leverage digital marketing and other social media marketing to enhance its
business presence at the time of Covid-19.
Threats
 As a result of Covid-19 the budget hotels like Easy Hotel, Ibis etc. are the competitors of
the Premier Inn as the company operates in high prices segments with private rooms, and
other luxurious facilities.
 The Lockdown in UK due to Covid-19 has decimated the business of the Premier Inn and
has caused the threat of turn down of financial resources of the hotel. This has also
caused the threat to the company's market share as the low sales and increasing cost will
impact company's profits.
PESTLE Analysis
Political factors: The decrease of the corporation tax by the government of UK has been
favourable political factor for the Premier Inn as this has helped the company to see rise in their
profits. But the increase of the VAT has caused the problem for the UK hotels as this has
increase inevitable price of the company.
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Economical factors: The Covid-19 has caused a major downfall to the economy of the UK as
the crisis has restricted the businesses of hospitality industry to stop operating (Tambunan,
2020). Due to the complete lock down and restriction in Travelling Premier Inn faced an
unfavourable downfall in revenue and increase in maintenance cost.
Social factors: The customers of the hotel industry are indulged into new customer trend where
they require luxury facilities like fitness centre, gym, swimming pool, spa etc. this trend is
advantage for the Premier Inn as the company provide all the facilities. With the covid-19
situation the company is unfavourable situation in operating the business as the customers are
have fear of getting sick.
Technological factors: the hotel industry is completely technology driven and is prospering
itself with the new technology. The premier is highly supported with the technology as the
company has gained an advantage in building technology driven supply chain. The excess
modification with the technology in the operating systems has caused high risk to the
confidential information of the Premier Inn (Perera, 2017).
Legal factors: The legal factors has huge role with the business of Premier Inn as the company
has to take care of the legal laws such as data privacy and GDPR in order to protect the
information of guest (Susilo, 2020). This also helps the company to protect its property rights
through intellectual property rights. The disadvantage of this law suit is that company has to take
care of the health and hygiene laws and employments laws of all country in order to operate
smoothly in all the countries.
Environmental analysis: The government has strict rules regarding the protection of
environment this is useful to the Premier Inn as company has taken multiple actions to reduce the
impact of carbon emission from the hotel over the environment. The Premier Inn has also
developed strategy to reduce the usage of plastic in order to protect the environment which will
help the company to gain sustainable development (Šošková, 2016). The growing environmental
concern among consumers is forcing the Premier Inn to convert all its operations sustainable and
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ecologically friendly which is unfavourable to the hotel as this has increased the expenses of the
company.
CONCLUSION
It is concluded from the above report that The organisational structure of the hotel or any
company is developed on basis of their company's goals and objectives. It is understood that
functional organisation structure is appropriate structure for the company as it keep the different
roles and responsibility segregated and also helps the hotel in appropriate management. Thus the
the company strength helps in grabbing new market opportunities and also mitigate the threats.
Thus the external environmental factors are helpful to the company in gaining profitability but
the Covid-19 has decreased the profitability and productivity as the restriction to operate
business by the government has reduced the operational activities in company.
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References:
Books and Journals
Betti, N. and Sarens, G., 2020. Understanding the internal audit function in a digitalised business
environment. Journal of Accounting & Organizational Change.
Yu, K., Qian, C. and Zhang, L., 2021. Understanding sustainable development flexibility: An
information perspective. Business Strategy and the Environment. 30(4). pp.2173-2183.
Raziq, M.M and et. al., 2020. Organisational Structure and Project Success: The Mediating Role
of Knowledge Sharing. Journal of Information & Knowledge Management. 19(02).
p.2050007.
Gillam, S. and Cosford, P., 2021. Organisational structure. In Leadership and Management for
Doctors in Training (pp. 26-31). CRC Press.
Woods, A.L and et. al., 2020. Functional framework for change leaders: results of a qualitative
study. BMJ Leader. 4. pp.207-213.
Rutti, R.M., Garcia, F. and Helms, M.M., 2021. Entrepreneurship in Peru: a SWOT
analysis. International Journal of Entrepreneurship and Small Business. 42(3). pp.369-
396.
Tambunan, T.S., 2020. SWOT Analysis for Tourism Development Strategy of Samosir
Regency. TIJAB (The International Journal of Applied Business). 4(2). pp.90-105.
Perera, R., 2017. The PESTLE analysis. Nerdynaut.
Šošková, K., 2016. A Competitiveness Analysis of NH Hotel Olomouc.
Susilo, D., 2020. Macro-Regional Analysis of Tourism Entrepreneurship Environment in Bali: A
Descriptive Study. International Journal of Economics, Business, and
Entrepreneurship. 3(1). pp.1-13.
(Betti and Sarens, 2020) (Yu, Qian and Zhang, 2021) (Raziq and et. al., 2020) (Gillam and
Cosford, 2021) (Woods and et. al., 2020) (Rutti, Garcia and Helms, 2021) (Tambunan, 2020)
(Perera, 2017) (Šošková, 2016) (Susilo, 2020)
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