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A Case Study on Premier Inn Hotel

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A Case Study on Premier Inn Hotel

Introduction - A Case Study on Premier Inn Hotel

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This case study is based on understanding the business organization of Premier Inn Hotel. The hotel is the UK's largest brand with more than 72000 rooms and 800 hotels. Premier Inn hotel was founded in 1987 by Whitbread in Dunstable, United Kingdom. The company aims to provide quality services at affordable prices that enable their guests to live comfortably and to positively impact the world. With the room services, they also provide irons, hairdryers, and free travel cot hire. These products are available on guests' requests. The mission statement of the company is to make a meaningful contribution to its customers and communities. The organization wants to be a place where everyone can reach their potential with no barriers to entry and no limits to growth. The vision of the company is to be available always for people and will be available for the customers. Opportunity, responsibility, and community are values of the company on which they are providing services to its customers.

In this case study, the organizational structure of Premier Inn hotel will be described in detail. Further, the business environment analysis will be done while using the SWOT and PESTLE analysis of Premier Inn hotel.

The organizational structure of Premier Inn Hotel

The organizational structure is a system that outlines certain activities which are directed to the goals of the organization. These activities can include roles, rules, and responsibilities of all the employees in the organization. The Premier hotel has a flat organizational structure. The flat structure is an organizational structure that has fewer management layers and a wider span of management control than another organization. While having a flat organizational structure, Premier inn hotel focuses on the requirements of customers (Yinan, Tang and Zhang, 2014). The organization uses a decentralized management approach to increase the duties and responsibilities of lower-level management and also to motivate the employees in the organization. Premier Inn hotel has few levels of management which enables them to clarify the roles and responsibilities to the employees in the organization. The flat organizational structure also motivates the employees while generating development opportunities, offering work-life balance, and so on. The advantages and disadvantages of having a flat organizational structure in the business are as follows:

Advantages

  • The flat organizational structure helps to improve employee morale. Premier Inn Hotel motivates the employees in the organization by involving them in the decision-making process (El Talla et al, 2018).
  • The higher authorities of Premier Inn hotel directly contact the managers which leads to less miscommunication. The organizational structure is based on direct contact this is why there are fewer opportunities to misinterpret ideas and feedbacks.

Disadvantages

  • While having a flat organizational structure in the business, limits the productivity of the employees. The higher authorities of the organization assume that each employee is going to give their best effort every day. So, it lacks close supervision in many instances.
  • Sometimes, Premier Inn Hotel lacks defining the responsibility to its employees. This is because the higher authorities give more than one responsibility because of few management levels in the organization.

Figure 1: Organizational structure of Premier Inn Hotel

Business environment analysis of Premier Inn Hotel

The business environment enables an organization to analyze its competitor's strategies and actions. It is the sum totals of all the internal and external factors that influence their functioning. It covers all the forces like government, social, cultural, legal, suppliers, competitors, political, technological, supply & demand, customer's needs & expectations, and economic factors.

SWOT analysis

SWOT analysis is a framework that is used to analyze the company's competitive position and to develop strategic planning. This tool enables the company to assess internal and external factors as well as current and future potential (Takacs and Vaduva, 2017). It includes strengths, weaknesses, opportunities, and threats of an organization which can be developed according to the market condition. The SWOT analysis of Premier Inn hotel includes:

Strengths

  • Premier Inn hotel has established a good brand image in the eyes of the customers which helps them to win the trust of customers during COVID-19 (Feili et al, 2019)
  • The company has a strong presence in the UK with 800 hotels over 78500 rooms.
  • The organization has a highly advertised chain of hotels.

Weaknesses

  • As compared to the other market giants, the company has a limited global presence.
  • Premier Inn Hotel has been accused of refusing to refund customers who booked to stay in part of wales which came under stringent local lockdowns (Lin, 2016).
  • The major weakness of Premier hotel inn is related to hygiene issues. It has been found that housekeeping staff uses the same towel to clean the entire bathroom including toilets.

Opportunities

  • It has been identified that Premier Inn hotel has a limited global presence. So, it is an opportunity to expand the business in other countries.
  • Premier Inn hotel has an opportunity to build brand value through the experience of customers (Idris and Abdul Wahab, 2015).
  • The organization has an opportunity to attract customers while taking precautions against COVID-19. They have the opportunity to improve their services after removing COVID-19 restrictions. So, that Premier Inn hotel can win the trust of customers.

Threats

  • Premier Inn hotel has tough competition in the market with the competitors such as Holiday inn, EasyHotel, Ibis, and Marriott.
  • Due to the current pandemic, Premier Inn hotel has been affected badly which is a threat for the company.

PESTLE Analysis

A PESTLE analysis is a tool used to gain a macro picture of an industry environment. This framework provides information about the business direction, growth targets, brand positioning, and risks to productivity (Perera 2017). Pestle analysis focuses on political, economic, social, technological, and environmental factors. To find out the external environment of Premier Inn Hotel, this framework is used by the organization which is as follows:

  • Political factors: Some political factors affect the business environment such as taxation policies and economics, employment laws, foreign trade regulations, political stability, and so on. Sometimes the employment laws like providing legislation on dismissal, pay, discrimination, holidays, and so on create unfavorable situations for the company (Seth, Hindley and Wilson-Wünsch, 2019). The positive collaboration with the UK government is the key success area for the hospitality industry like Premier Inn Hotel.
  • Economic factors: It has been identified that the current economic recession could be a major concern for the hospitality industry. The Premier Inn hotel is contributing to the development of the economy for a particular country because the hospitality sector gives more job opportunities to the people.
  • Social Factors: It has been identified that changing lifecycle and living standards of the people have brought many cultural changes across the globe. Premier Inn hotel focuses on providing quality services at an affordable price with changing social values and customer preferences. Certain key thinking patterns influence consumer behavior in decision making in the hospitality industry such as quality standards, variable room rates, high value for money, security, customer feedback, centralized reservation systems, and so on.
  • Technological factors: This factor is one of the most important variables that directly influence business operations. Premier Inn hotel is maintaining a good look and interactive website to attract customers (Mak and Chang, 2019). Due to the current pandemic also the organization has adopted digitalized payments for the safety of guests as well as employees in the organization.
  • Legal factors: Premier Inn Hotel has been impacted by the legal factors because of the changing situation all over the world due to the COVID-19 (Arif and Hossin, 2016). Consumer rights protection is an important issue for the organization because it includes the right to proper quality of service and the right to receive services in compliance with the requirements of the legal regulations.
  • Environmental factors: It has been identified that the care of social and environmental responsibility is considered as the center stage of customers' expectations and preferences. Premier Inn Hotel is maintaining sustainability in the business while doing activities related to corporate social responsibility.

Conclusion

It has been concluded that due to the current pandemic hospitality industry has faced many challenges. The impact of COVID-19 on the hospitality industry is worst as some of the organizations went into loss. It has been identified that Premier Inn hotel has managed things properly while fulfilling the expectation of the customers in difficult times as well. Although they have also faced many challenged but managed to cope with the difficulties and find out the solutions to attract customers. It has been identified that Premier Inn hotel uses a flat organizational structure which enables them to keep clear goals with clear roles and responsibilities in the minds of employees. It has been identified that this organizational structure helps them to improve the morale of employees which leads to an increase in productivity. With the help of this report, it has also been identified that due to having a strong brand position in the market they have successfully implemented the changes to decrease the impact of COVID-19 and to re-gain the trust of the customers. It has also been analyzed that legal factors have impacted the hospitality industry due to the changes in laws and legislation related to consumer rights protection, and so on.

References

Arif, T.M.H. and Hossin, M.Z., 2016. A comparative analysis of internal and external environments between Hotel Hyatt, UK and Hotel The Cox Today, Cox’s Bazar, Bangladesh. IOSR Journal of Humanities and Social Science21(6), pp.13-22.

El Talla, S.A., Al Shobaki, M.J., Abu-Naser, S.S. and Abu Amuna, Y.M., 2018. The Nature of the Organizational Structure in the Palestinian Governmental Universities-Al-Aqsa University as A Model.

Feili, H., Qomi, M., Sheibani, S. and Azmoun, G., 2017, November. SWOT analysis for sustainable tourism development strategies using fuzzy logic. In 3rd international Conference of Science & Engineering, In the Technology Era. Copenhagen, Denmark (Vol. 30).

Idris, J. and Abdul Wahab, N., 2015. The competitive advantages of Sharia-compliant hotel concept in Malaysia: SWOT analysis. Fakulti Pengurusan & Muamalah.

Lin, X., 2016. Strategy analysis of a boutique and lifestyle hotel: a SWOT analysis (Doctoral dissertation, California State Polytechnic University, Pomona).

Mak, A.H. and Chang, R.C., 2019. The driving and restraining forces for environmental strategy adoption in the hotel Industry: A force field analysis approach. Tourism Management73, pp.48-60.

Perera, R., 2017. The PESTLE analysis. Nerdynaut.

Seth, P., Hindley, C. and Wilson-Wünsch, B., 2019. An Analysis of Women-only Hotel Accommodation in India.

TAKACS, J. and VADUVA, S.A., 2017. A swot analysis of the global hospitality industry. Revista Economica69(6).

Yinan, Q., Tang, M. and Zhang, M., 2014. Mass customization in flat organization: The mediating role of supply chain planning and corporation coordination. Journal of Applied Research and Technology12(2), pp.171-181.

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