Hotel Industry SWOT Analysis 2022

hotel industry swot analysis

The hotel industry is a large field that is responsible for a large sum of money in the form of revenue. It is responsible for contributing billions of dollars to the global economy. It is the sole reason for tourism to be as popular as it is now. There are even some chains that run their business all over the world.  For this reason, a hotel industry SWOT analysis is very important to keep one’s business strategy for this sector in check. As one would expect with an industry with a particularly enormous monetary muscle, one needs to have an obvious business technique and a hotel industry SWOT analysis helps with that.

Hotel Industry SWOT Analysis

Simply put, a SWOT Analysis is a rundown of all Strengths, Weaknesses, Opportunities, and Threats facing a particular industry or niche.

A hotel industry SWOT analysis or in some cases, the hospitality industry SWOT analysis by and large aids in conceiving a legitimate arrangement to remain ahead of the opposition. Its enchanted appeal lies in the way that it can help hoteliers worldwide to create and execute sound and powerful business systems.

As you would expect with an industry with a particularly enormous monetary muscle, you need to have an obvious business technique.

Primary business strengths, weaknesses, opportunities, and threats will be the main focus of our hotel industry SWOT analysis.

Strengths of Hotel Industry in SWOT Analysis


The understanding of hotel industry SWOT analysis will result in gaining a deeper perception of the background of the hotel industry. This will also assist one to understand the depth of service in the hotel industry and to explore the hotel industry SWOT analysis further.

At first, it has to be acknowledged that the hotel industry’s strong points may alter depending on Its region. Each region has Its own merits and demerits.

First off in the hotel industry SWOT analysis chart, we will take an incisive look at Its general and most common strengths.

Gives a protected lodge away from home: The hotel business gives safe convenience to individuals when they are away from their homes. The industry itself brags millions of nice rooms. With an assortment of lodgings across the globe – from boutique hotels to the loftiness worldwide name brands and everything in the middle, there’s consistently a hotel that will fit a client’s needs. They offer everybody a spot to kick back and loosen up away from all the hurrying around of regular day-to-day existence and work. Without the hotel business, get-aways and travels wouldn’t be more secure or even conceivable.

Contributes to the Local Economy: As an industry that uses critical monetary force, the hotel industry can positively hold things over in the neighbourhood economies. Sure, it’s nearby attractions that carry masses to the local area, yet the hotels are the ones that keep them there. When individuals stay in a spot, they burn through nearby administrations and goods. They will visit nearby shopping centres, eat in neighbourhood eateries, and shop in neighbourhood stores.

It employs a large number of people: The hotel industry is a large sector that employs a large number of workers. This industry has a large number of subsectors. So the need for new employees is never to be filled. In the future, there is a chance of ten percent for each and every people to become somehow invested in this industry. So, this industry will continue to employ a huge number of people for a very long time.

High-Profit Margin: The hotel industry needs a huge sum of capital to start the business but it is still a good investment. All because the price of labour is lower and the profits are higher. This may not be the situation for all the countries. The hotel industries of Asia, North America, Africa, and the Middle East have the pleasure of cheap labour. On the other hand, the hotel industries of Europe and America have to spend a huge amount of their earnings to pay wages. Extravagant amount of profit is the core strength for many sectors of the hotel industry. Some of those are enlisted below:

Weakness of Hotel Industry in SWOT Analysis


This is an essential part of the hotel industry SWOT analysis. Because only after sharpening their defences against these weaknesses, the hotel industry gains their competitive edge. Some of these weaknesses are enlisted below.

Huge setup cost and high hotel rates: It is a known fact that only a day in a high-end hotel costs a huge amount of money. These charges are so high that an average individual with an average income can never afford them. For this, the hotels are losing valuable customers both inside and outside of the industry. So, in short, there is only a small part of society that the hotel industry can order its services to. Yes, there are other hotels out there that are much more affordable but the service standard of those is much, much lower.

It also takes a large sum of money and a lot of effort to set up a hotel and maintain it. It can take years for the high-end hotels to get to their target profit zone.

Large investments and operational costs are the main reason that the hotel industry is falling behind.

Troublesome Tax rates: In certain nations, the hotel industry is exposed to a baseless expense structure which, thus, takes the expense of offering cordiality administrations to an entirely different high. Get this: a few rooms pull in explicit expenses which are charged each night spent there. As though that isn’t more awful enough, a few hotels likewise get higher deal charges when set in opposition to other sub-enterprises like bed and breakfast.

Depending on tourism and seasons: The hotel industry is a piece of the greater travel and neighborliness industry. This reliance makes the hotel industry vulnerable. The business of hotels would rely upon the flood of sightseers, occasions, and season. This irregularity and reliance on the tourism industry is a critical shortcoming of the hotel industry. Predicting high and low seasons ahead of time is very troublesome. Keep a full-scale point of view, this gets significantly more difficult. As a model, the COVID-19 pandemic has just crushed the travel industry area in 2020. The hotel industry is straightforwardly subject to venture out and along these lines needed to endure gigantic losses. This is an exemplary illustration of the over-reliance of the hotel industry on outer elements.

Opportunities for Hotel Industry in SWOT Analysis


Now, we take a look at all the opportunities that we can exploit in the hotel industry SWOT analysis:

Large field for Technology: Indeed, it’s a vital strength of the hotel industry as the innovation actually can be supposed to be under-explored in accommodation and travel. Doing a SWOT investigation for your hotel business around innovation would open an expanse of chances.

  • Using Artificial Intelligence in client care (Chat-bots)
  • Overhauling the Property Management System
  • More noteworthy utilisation of Automation for registration and look at
  • Utilising Robotics for programmed some piece of administration
  • Block-chain for an upgraded instalment security
  • Cloud innovation for saving money on worker assets
  • Increased and Virtual Reality helps in a more extravagant customer experience.
  • Also, considerably more would be on your investigation radar while investigating openings for the hotel industry.

Millennials as the new target sector: Millennials are creating new sectors for the hotel industry. Their love for travel, technology, sustainability, and green tourism acts as the sole reason for these opportunities. A large group of people is now becoming the chief of travelling and housing (during the travel). Depending on this market, a lot of other sectors can have the spilling-over effect. Like these millennials are paving new ways for the hotel industry.

Threats for Hotel Industry in SWOT Analysis


This is the most important part of the hotel industry SWOT analysis.  Some of these threats are enlisted below:

Boutique Alternatives: Cheap and warm hospitality services are gradually taking over the market. Airbnb is one of them.

Prevalent Conditions: Political uneasiness in a country can easily pose a threat to the hotel industry.

Turbulent Economies: The world’s recess has had a heavy toll on the hotel industry. With low rates of disposable income and small interests, the hotel industry is finding itself in a great struggle.

Changes in Travelling: A.R. and V.R. technologies give people the choice to enjoy the pleasures of traveling without having to travel. This creates a major problem for the hotel industry.

Pandemic Disasters: Pandemics can put a heavy dent in the hotel industry earnings. The recent COVID serves as a good example in this case.

Hotel Industry SWOT Analysis Overview Template


Conclusion and Recommendations for Hotel Industry

The following recommendations will focus on improving the weaknesses or neutralising the threats for the hotel industry. The recommendations are the following:

  • Redecoration of the classic room products
  • Performance management schemes for employees
  • Trying to keep up with five-star standards
  • Hotel wide free Wi-Fi system needs to be developed
  • Special salary and wage reviews

The hotel industry plays a very important part in our economy. Even though it’s recently suffering from the world’s recess, it still needs more consumers. This hotel industry SWOT analysis will help the hotel industry to take a step back and analyse their business. This will help them recover from their weaknesses and neutralise the threats while strengthening their strength and allowing them to make good use of the available opportunities.

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Written by: Admin

I'm Angela, founder & content creator of SWOT Hub. As an entrepreneur, I love to explore various brands/companies & write about them.

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