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What Is Hospitality Industry Analysis?

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  • Written By: Esther Ejim
  • Edited By: Kaci Lane Hindman
  • Last Modified Date: 24 November 2016
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A hospitality industry analysis is a comprehensive study of the different points of study that can be applied by both established organizations in the industry as well as prospective entrants. The hospitality industry includes organizations like restaurants and hotels, and the result of an analysis will enable those in the industry to make informed decisions. Some of the factors included in a hospitality industry analysis are the ease of entry, the power of suppliers, the power of the customers, and the competition.

One of the issues that will be of much interest to prospective entrants during a hospitality industry analysis is the ease of entry into the industry. Ease of entry is a term that describes the level of difficulty in place for new entrants trying to establish themselves in the industry. In order to answer this question, the analysis must include a study of any monopoly in any part of the industry by established organizations that serve as a barrier to new entrants. It would also have to study the ease with which new entrants can gain access to finance in order to join the industry. Even established companies in the hospitality industry will benefit from this knowledge, because the easier it is for new companies to penetrate the industry the higher the competition will be.

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Another aspect of a hospitality industry analysis is a study of the ability of those in the industry to get the necessary supplies and raw materials they need in order to carry out their business. For instance, restaurants need items like raw food materials in order to prepare their food. As such, the hospitality industry analysis must include a detailed study of the ease or difficulty for obtaining these supplies. The analysis must also include the study of how the suppliers of the raw materials relate with the business owners.

Customers also have an important role in the hospitality industry analysis since they are one of the main factors that will determine the success of the business. The hospitality industry analysis should include a study of the availability of customers to help make the business successful. This may be affected by the number of competitors in the industry because the more companies that offer the same or similar items or services, the less patronage the new entrant or established business can expect. To this end, the analysis should include a study of how fierce the competition is in the industry.

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