Strategic Hospitality Management Report on Premier Inn Analysis

This report provides a comprehensive strategic analysis of Premier Inn, a prominent British hotel chain. It begins with an introduction to strategic hospitality management and then identifies Premier Inn's mission and objectives. The report details the company's key stakeholders, outlining their significance, needs, and expectations. Furthermore, it conducts a stakeholder analysis to determine the actions required to manage different stakeholder groups effectively. A PESTLE analysis is performed to assess the macro-environmental factors influencing Premier Inn's strategies and decision-making, considering political, social, technological, environmental, legal, and economic factors. Finally, the report uses SWOT analysis to evaluate the company's internal strengths and weaknesses, as well as external opportunities and threats, providing recommendations based on the findings. The report concludes with a summary of the key insights and implications for Premier Inn's strategic management, ensuring its competitive advantage in the market.

Strategic Hospitality
Management

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK ..............................................................................................................................................1
Mission .......................................................................................................................................1
Stakeholders................................................................................................................................2
Strategic Analysis........................................................................................................................5
Recommendations.......................................................................................................................5
CONCLUSION................................................................................................................................6
REFERENCES................................................................................................................................7

INTRODUCTION
Strategic Hospitality Management is a concept which includes formulation and
implementation of good strategy that leads an organisation towards high growth and success. It
mainly emphasize on the way in which managers develop, execute and evaluate strategies of
hotel in order to gain high competitive advantage in market and creating superior value for
consumers (Avci, Madanoglu and Okumus, 2011). In the present assignment, given organisation
is Premier Inn which is a British hotel chain and operates in variety of locations. This report
includes identification of firm's mission and objectives as well as its key stakeholders. Moreover,
PESTLE and SWOT analysis is conducted to determine internal capability & current external
environment of organisation.
TASK
Mission
Premier Inn is one of the largest hotel brand of United Kingdom. It operates in variety of
locations involving suburbs, airports and city centres. The company was established in year 1987
by Whitbread. It is a subsidiary firm of Travel Inn which accounts for around 70% of
Whitbread's earnings. The chain have more than 750 hotels with 65,000 rooms. Their main
purpose is to offer high quality services to guests and provide them unforgettable experience.
Mission statement of Premier Inn:
“We are the preferred destination of choice offering professional, personalised, flexible
hospitality and service to the discerning business and leisure market”.
The purpose of mission is to be most hospitable firm in world by providing heartfelt
experiences to guests, high value for owners, meaningful opportunities for team members and
create a positive impact for communities (Brotherton, 2012).
Objectives of Premier Inn:
 To grow successful brands by developing strong customer innovations and heartbeat to
stay ahead.
 To grow and innovate their core UK businesses.
 To contribute in development and welfare of society.
 To create 6500 jobs and recycle 80% of domestic waste by 2020.
 To increase their market share by 25% in next 5 years.
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 To maintain strong relationship with customers by administering the good quality
services.
Stakeholders
Every firm and business has its own stakeholders. They are the persons or group of
individuals who have some stake in business and work for the success of company. There are
some key stakeholders of company that contributes in its growth and success. Stakeholders of
Hotel Premier Inn are as follows:
Stakeholders Their significance Needs and expectations
Owners They are the individuals who are
responsible to manage functions and
activities of firm and have the power to
formulate all rules and regulations that
highly assists in growth and development
(Buhalis and Crotts, 2013).
As they are the owner of business,
they have high authority for taking
all the essential decisions of
Premium Inn Hotel. Owners expect
to maximize value for investment
and expect dividend on it.
Management Management is an important part of
company that is liable to take all decisions
regarding activities and operations of
firm.
They plays vital role in formulating
plans and strategies that provides
guidance to their workforce to work
towards attainment of goals. They
formulate long term goals for
company and ensures its effective
attainment.
Employees Manpower are the essential asset of
company that leads the firm towards high
growth and success. If they get all this,
they get motivated and work more
effectively towards attainment of mission
of Premier Inn.
They helps in carrying out all the
operations of firm. They concerned
about compensation, job security,
acknowledgement, rates of pay,
appreciation, recognition, truthful
communication and respect.
Customers They are that vital component of company
that highly assists in its growth and
sustainability. The reason behind
They are important stakeholders
group and firm make conscious
efforts to meet expectations and
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existence of business is sake of its
consumers.
needs of their customers.
Suppliers They are the one who provide raw
materials or other goods to firm that
assists they in offering high quality goods
and services to customers.
It is required by company to
manage good relationship with their
stakeholders so that they are able to
get their raw materials on time so
that operations can be carrying out
effectively (CG Davidson, McPhail
and Barry, 2011).
Government Legal authority is one of the stakeholder
of company that contributes in growth of
company. It is required by firm to comply
with all the laws and legislations made by
government.
They will help in carrying out
operations and functions of firm in
an effective and efficient manner.
Local
community
It is the area within which business
operates and are considered as another
stakeholders. Sound businesses and good
organisations are referred as asset to
community.
Along with meeting expectation of
other stakeholders, these firms
contributes in various welfare
programmes. Hotel Premium Inn
engaged in various CSR activities
gives high contribution in welfare
of society (Galliers and Leidner,
2014).
Investors They are the one who invests money in
firm with the hope of getting high returns
from their investment.
They analyse financial position of
company carefully before investing
in it. Financial position of Hotel
Premium Inn is good so, investors
can invest money in it. They expect
return on investment.
Affiliates It is a kind of inter firm relationship in High returns.
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which one enterprise owns less than
majority stake in stock of other company.
In other words, it is a relationship in
which 2 different firms are subsidiaries of
large parent company.
Travel agents For an Hotel industry, they are also
important stakeholder as they helps in
growth of company.
Assists in growth of business.
Stakeholders Analysis:
(Source: Stakeholders Mapping, 2017)
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Illustration 1: Stakeholders Mapping

STAKEHOLDER ANALYSIS
High
Power
Low
Low Interest High
Position that is allocated to stakeholder shows the actions require to take with them:
High power and high interest High power less interest
People with high power and interest needs to
be manage closely. Hotel Premier Inn must
completely engage with employees, manager
and HR and make their whole efforts in order
to satisfy them. They should involve
employees in process of decision making.
People with high power and less interest needs
to keep satisfied. For satisfying them, enough
work is put in with these but not much that
they bored. Firm requires to satisfy them as
they have power to alter decisions taken by
BOD.
Low power high interest Low power low interest
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Employees
Managers
HR
Suppliers
Customers
Government
Competitors
Local
Community
Inactive Board of
Directors

People with low power and high interest needs
to be keep informed. These people includes
suppliers, customers, government and
competitors. Premier Inn needs to adequately
inform these concerns so that no issues are
arise. Though, they are not able to influence
operations of business, but they assists in
improving goodwill of firm.
People with low power and interest: Firm
needs to monitor these people but ensure not to
bore them with overweening communication.
They are not able to takes participation in
process of decision making. But, they need to
monitor activities that are essential for long
term planning.
PESTLE Analysis:
There are some forces in macro environment that influence strategies and decision
making of company. Sudden changes in government policies & political environment, tax rates,
increasing and decreasing trade barriers, imposition of laws, demographic and cultural changes
are some important examples of macro environment. PESTLE analysis is one of the tool which is
widely utilized by managers for analysis of macro environment factors. It is very useful for
strategic decision making development. PESTLE analysis of Premier Inn Hotel evaluates and
determine strategic in dynamic and competitive environment (Harrington and C. Ottenbacher,
2011).
PESTLE Factors affecting Stakeholders Stakeholders
Political Pragmatic and positive collaboration with government of
United Kingdom has bought hospitality sector into important
success area of development of economy in UK. It is the fifth
largest industry which contributes over £34 billion in tax
revenues. Current recession could be a main ground of concern
for hotel industry. Because of substantial decrease in interest
rates assisted to reduce further rises in rate of unemployment.
This results in increasing spending power of customers which
becomes a encouraging element for Premier Inn for their
budget hotel chains expansion. With growing demand,
tremendous expansion are making by them in business.
Local authority,
government
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Social Changing living standard & lifestyles and social circles has
bought many cultural and social changes all around the world.
People prefer products with low cost accompanied with high
value standard for money, as living cost increasing (Jang and
Park, 2011). Some key thinking patterns that affect behaviour
of consumers in decision making are easy accessibility, quality
standards, high value for money, variable room rates,
responsiveness to demands of customers, centralized and online
reservation systems, promotion and discount offer, security,
customer feedback etc. Premier Inn emphasize on satisfaction
of customers & keep revitalizing their strategy of business with
changing consumer preferences and social values. They offer
100% money back guarantee to their customers of friendly
service, comfortable surroundings and good quality room. They
are highly committed to understand their guests better than
others.
Local
community,
customers
Technolog
ical
It is one of the factor that directly influence operations of
business. Use of current development in IT assists in
maintaining smooth functioning of organisation across the
region. It facilitates in developing centralized system of supply
chain management. They highly influence promotion and
marketing of products. Premier Inn maintaining interactive and
good looking websites. They provide online reservation facility
to their customers and maintain their database. They keep
sending messages to their customers regarding promotional
campaign and new product offering. Utilization of mobile also
administering great platform for awareness and advertisement
campaign (Mitchell, Obeidat and Bray, 2013).
Employees,
customers,
suppliers
Environm Social responsibility and care of environment are referred as Community
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ental centre stage of expectations and preferences of customers. Now
a days, they are more vigilant & favours the firm who care
about environment. They give due diligence to follow such
operations of business which assist in reducing pollution as
well as proper waste disposal. One of the major core
competency of Hotel Premier Inn is that they strongly focus on
Corporate Social Responsibility. They have formulated strong
CSR strategy and reviewed it & develop “Good Together”
programme. Their main objective of formulating this strategy is
to reduce 26% of carbon emission and 20% of water
consumption by 2020. Environmental approach of Premier Inn
is guided by their energy and environment policy which
includes various principles they needed to comply (PESTLE
ANALYSIS, 2016).
Legal 15.5% increment in minimum wage rate by government of
United Kingdom would costs an increment in operating cost of
hotel. This leads to increase in production cost that hampers
policy related to offering competitive prices to guests. To
maintain high standard and avoid legal issues, they framed a
responsible sourcing policy. It states minimum standards and
principles of cooperation expected from business partners,
contractors and suppliers by Premier Inn Hotel. Commitment is
also sets out by them to working with suppliers to support
policy implementation (Mok, Sparks and Kadampully, 2013).
Government
Strategic Analysis
SWOT Analysis:
Strengths:
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 The company has strong global presence and its brand name is known worldwide. As
Premier Inn Hotel provides its services in various countries, it is well known by people
and has strong presence in markets of all over the world. Initially company is operated in
some countries only but now, it operates in many countries with its 750 hotels. It is one
of the biggest strength of company.
 Firm have high reputation in terms of delivering high quality or superior customer
service. Premier Inn is one of the leading hotel chain of United Kingdom which is
known for its quality services. As the Hotel serves food with good taste and its excellent
services creates good image of organisation in minds of customers. It assists in improving
its goodwill in market. It is known for its adaptability to changing socio economic trends and for constant
innovation. Marketing team of Hotel Premier Inn is highly skilled and knowledgable.
This team provides complete information to firm regarding market trends and changes in
taste and preferences of customers. It assists managers of hotel in adapting with these and
bringing innovation within firm. Premier hotel constantly adapt changes and make
alterations in its products and services constantly as per the changing needs and
preferences of customers.
Weaknesses:
 Firm generates around 69% of operating profit form its US operations only and
remaining part is from other countries. It is the major weakness of firm as major area of
its operations and activities are concentrated in a particular market only.
 80% of its hotel are located in 20 countries only. Therefore, high geographic
concentration due to which popularity of firm in other countries is less.
 Intense competition which declines their margins. Today, there is high competition in
market as various other large group of hotels are operated due to which margins of firm
may decline. Constantly decline in profits and revenues of company is becoming a major
weakness of hotel. Global presence is not as elaborated as international chains of hotels as they are not
giving their clients single point of contact.
Opportunities:
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 Good distribution of sales resources provides an opportunity to company to develop its
strong presence in market. It will assists in developing good brand image of Hotel
Premier Inn.
 Tremendous potential is offered by emerging markets to Hotel Premier Inn. This will
provides an opportunity of growth and development to an organisation and also assists in
expansion of business activities. It is an opportunity as it assists in increasing productivity
and profits of company.
 Well managed Corporate social responsibility results in good or positive feedback from
stakeholders. It will helps in maintaining good brand image in minds of people of society
which is the biggest strength of company as it helps in creating good image of hotel in
minds of customers and they attract more towards it.
 More strategic tie ups provides a huge opportunity to Hotel Premier Inn in terms of its
expansion and growth in business activities and operations are expanded in diverse areas. Investing in digital marketing will be beneficial for firm in order to reach more and more
people and communicate its brand name in market. This will provides an opportunity to
company in terms of increasing its customer base.
Threats:
 Lack of control on unpredictable events such as terrorist attacks, natural disasters etc.
This will decline incoming of visitors to country which in turn leads to decline in profits
of Hotel Premier Inn. It is the biggest threat for company as it will declines its
profitability.
 Global recession as it leads to decline in lodging demand which may lead to decrease the
revenue of Hotel Premier Inn. This will be a threat for hotel as declining demand leads
the firm towards losses.
 Political instabilities in areas of tourist leads to negative influence on hotel industry and
affects its functioning and operations. By this, firm is not able to run their operations
smoothly and efficiently.
Recommendations
Budget hotel industry is rapidly growing one around the world. Purchasing power of
customers are further decreasing and recession era is continued. Spending patterns of customers
are changing & they always look for high quality products in cheaper rates. This phenomenon
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