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The way to conduct a Strengths, Weaknesses, Opportunities, and Threats (SWOT) analysis of a hotel is to apply the principles of the technique toward a comprehensive overview of everything within the internal and external environment that might affect the hotel from a business point of view. It is important to find out the strengths of the hotel as well as what might cause the hotel to be weak. The characteristics that can be described as opportunities from which the hotel can grow also need to be included. Finally, the analysis should include an investigation into characteristics that can potentially be threats.
Strengths in the SWOT analysis of a hotel could be something like the size of the hotel. If the hotel has many rooms, this increases the profit that can be made from the hotel. A hotel's reputation can also be a strength, because a hotel with a five-star rating means that it has an excellent reputation. Such a good reputation means more customers and the ability to charge higher amounts for the rooms, services and other facilities. If the hotel has auxiliary facilities like standard or world-class conference rooms, this is also a plus because it can increase profits through renting the rooms out for events like conferences, weddings and meetings. A well-trained staff is a strength since customers will always respond positively to good and courteous service. The corporate culture in place in the hotel is important as well, because a good corporate culture boosts the morale of the employees and makes them more productive.
Weaknesses identified in a SWOT analysis of a hotel include all of the aspects that make the hotel vulnerable. This includes qualities like a poor corporate culture and a poor maintenance culture. A poorly maintained hotel will soon earn a bad reputation and lose customers. In the same way, a hotel that has a staff with poor customer service will also lose customers. These are some of the weaknesses that could affect the bottom line.
Opportunities in a SWOT analysis of a hotel include factors like favorable government policies and close proximity to places where the most people can have easy access to the hotel. For instance, a hotel that is located near a major airport can view its location as an opportunity because this makes it easily accessible for people who need a place to stay while in transit. This is also a good business strategy because it means the hotel management is capitalizing on the presence of the airport to maximize its profits.
Threats in a SWOT analysis of a hotel are those factors that threaten the very existence of the hotel. An example of such a threat is too much competition. If a hotel is located in a vicinity where there are numerous hotels, this will affect the profit margin of the hotel. Too much competition translates into too many choices for the customers. This means that the hotel stands a risk of not having a maximum room occupation.
I used to work in hotels. The STR report (pronounced "star") is widely used in the industry to better understand the competitive landscape. It helps management determine how the hotel compares to others in the market and this analysis is usually included in a SWOT.
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