What is Hotel SWOT Analysis?
A Hotel SWOT analysis is a tool used in hotel revenue management consulting that hotels employ to evaluate their internal opportunities (strengths and weaknesses) as well as external opportunities and threats to their business. At XOTELS, have performed competitor analysis for many hotels. Our revenue management experts compare review scores on the different facilities and services of the hotels, with the price positioning.
It is useful to detect opportunities ahead of time and plan how to approach bottlenecks proactively. This tool contributes value by allowing for a more accurate decision-making process that helps building a solid strategy for your business. Below we share with you our experiences and approach:
Maximize internal resources:
- Play and adjust better to your strengths.
- Invest in your opportunities.
As for the external opportunities:
- Turn weaknesses into strengths.
- Detect and minimize the impact of threats.
General Examples of Strengths, Weaknesses, Opportunities and Threats
SWOT analysis can contain many different topics. See below some examples of what can be included into the analysis:
SWOT Examples per Hotel Type
Since so much variety exists in the hotel industry, we have included some cases that highlight different examples of what can be described in the SWOT analysis for various hotel types:
Small-scale Independent Boutique Hotel
- Strength: Flexible/agile decision making, not limited by the boundaries set by major brands
- Weakness: Loyalty benefits vs major brands are difficult to compete with as individual hotels. Unawareness of the hotel (difficult to spot from outside the building)
- Opportunity: Easily adapt to new/emerging markets with new products and services and digitalization.
- Threat: Power/market share of OTAs and Google
Urban Luxury, Centrally Located in a Large Metropole
- Strength: Strong character (building, interior, knowledge staff, location)
- Weakness: High cost price and manpower (due to quality products)
- Opportunity: Targeting travellers looking for highly personalized,unique and private offerings (opportunity to take it to the next level as a luxury property). Opportunity for luxury digitalization.
- Threat: Competition international brands, with long history and established in luxury segment
Rural Resort, in Proximity to Popular International Travel Destination
- Strength: Exceptional location and amenities such as a beach, pool, and restaurants
- Weakness: Difficult to find quality manpower in certain regions
- Opportunity: Emerging travel types to escape city life, opportunities to host events such as weddings, incentives meetings
- Threat: Heavily dependent on tourism, seasonable demand
Step by Step Actions
Start by investigating the following to assess the status quo:
Critically assess your performance
Here are a few metrics you may want to include in your analysis:.
- Revenue per Available Room (RevPAR)
- Average Daily Rate (ADR)
- % Occupancy (Occupancy Rate)
- EBITDA margin
- % Direct bookings (Direct Sales)
- Average group size
- Event activity
- Sales cycle length (by segment)
Benchmark
- Start benchmarking your products and services to your competitors
Market share
Online reputation
- It is important to respond to negative reviews and work on improving your review scores
Website traffic
- What slice of the pie goes to your own website?
- What are the metrics like?
- Find opportunities to start driving direct sales
There is a need to perform these steps of the SWOT analysis both for existing and new hotels in order to perform better. This tool will present new hotel and revenue management opportunities and will be helpful for identifying weaknesses and threats to make your business stronger and more resilient. Creating a great SWOT is a time-consuming process and might require external help from a hotel revenue management consulting and hotel management company to fully draw the potential of the hotel out.
