SWOT analysis of hotel industry in this regard can provide a thorough insight to whether or not the industry is contributing towards the achievement of its goals. For now, let’s consider the hotel industry in India, which is one of the fastest growing in the world. Strengths
The first step to a SWOT analysis of hotel industry in India will be identifying its strengths. There are more than 1000 classified hotels with a room availability of around 97,000 rooms which can easily cope with the demand of tourists. Furthermore, there are also a number of international names in the market which meet the needs of international tourists on their visit to India. In addition, there are many tourist attractions and the cost of labor is low in comparison with the rest of the world, thus, providing better margins for hotel owners and higher growth potential in the industry. Weaknesses
Next in line is assessing the weaknesses. One major restraint to the hotel industry of India is the cost of land, which is as high as 50% of the total project cost, against a low 15% abroad. The country also has a higher tax structure as compared to other countries which inflates the hotel expense a great deal. Furthermore, the services offered by some hotels are limited and not comparable to world standards. Opportunities
The third strategic element to a SWOT analysis of hotel industry in India is the opportunities. The country boasts a number of attractions and has unmatchable diverse topography making it an ideal destination for tourists. As a result, the number of inbound tourists is expected to increase at a quick rate, further pushing the demand for hotels. Additionally, the demand for both national and inbound tourists can easily be managed as the peak season. For international tourists, arrival is between September and March, while most national tourists prefer to wait until school holidays, which are during the summer months. Threats
Where there are opportunities, you will also find threats. Several hotels in India are being replaced by guesthouses, thus, adversely affecting the hotel industry. Political unrest in the country also plays its part in reducing tourist traffic and consequently affects business of the hospitality industry. The country’s economic condition has a direct impact on the earnings of hotels. As a result, the staff might not be trained well enough to meet international standards. So, using this SWOT example for a hotel industry, you can conduct your own if you are planning to enter the hospitality industry or looking to further expand your hotel business.
What is PEST Analysis?
PEST is an acronym for Political, Economic, Social and Technological. This analysis is used to assess these four external factors in relation to your business situation. Basically, a PEST analysis helps you determine how these factors will affect the performance and activities of your business in the long-term. It is often used in collaboration with other analytical business tools like the SWOT analysis and Porter’s Five Forces to give a clear understanding of a situation and related internal and external factors. Understanding the PEST Factors
Before you jump ahead and start using this analysis, you should understand what each of these factors in this analysis signifies. Political – Here government regulations and legal factors are assessed in terms of their ability to affect the business environment and trade markets. The main issues addressed in this section include political stability, tax guidelines, trade regulations, safety regulations, and employment laws. Political What are the key political drivers of relevance?
Worldwide, European and Government directives, funding council policies, national and local organisations’ requirements, institutional policy Economic – Through this factor, businesses examine the economic issues that are bound to have an impact on the company. This would include factors like inflation, interest rates, economic growth, the unemployment rate and policies, and the business cycle followed in the country. Economic What are the important economic factors?
Funding mechanisms and streams, business and enterprise directives, internal funding models, budgetary restrictions, income generation targets Social – With the social factor, a business can analyze the socio-economic environment of its market via elements like customer demographics, cultural limitations, lifestyle attitude, and education. With these, a business can understand how consumer needs are shaped and what brings them to the market for a purchase. Social What are the main societal and cultural aspects?
Societal attitudes to education, particularly in relation to government directives and employment opportunities. Also general lifestyle changes, changes in populations, distributions and demographics and the impact of different mixes of cultures Technological – How technology can either positively or negatively impact the introduction of a product or service into a marketplace is assessed here. These factors include technological advancements, lifecycle of technologies, the role of the Internet, and the spending on technology research by the government. Technological What are current technology imperatives, changes and innovations? Major current and emerging technologies of relevance for teaching, research or administration Legal Current and impending legislation affecting the role
European and national proposed and passed legislation Environmental What are the environmental considerations, locally and further afield? Local, national and international environmental impacts, outcomes of political and social factors
PESTLE Analysis: An extension of PEST Analysis
What is PESTLE Analysis? PESTEL analysis is an extension of PEST that is used to assess two additional macroeconomic factors. These factors are the Legal and Environment conditions that can have an impact on the company. Examples of PESTLE analysis are similar to those of a PEST analysis, but they would include the following
PESTLE Analysis: An extension of PEST Analysis
What is PESTLE Analysis? PESTEL analysis is an extension of PEST that is used to assess two additional macroeconomic factors. These factors are the Legal and Environment conditions that can have an impact on the company. Examples of PESTLE analysis are similar to those of a PEST analysis, but they would include the following: Environment:
Changes in weather and climate
Laws regarding pollution and recycling
Use of green or eco-friendly products and practices
Health and safety laws
Consumer protection laws
Copyright and patent laws
So, if you want to assess a business situation in a comprehensive way, a PEST analysis is a definite must that can help you understand the macroeconomic business environment.