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Why You Should Do A SWOT Analysis For Your Hotel

Ever thought of a way of identifying the Strength, Weaknesses, Opportunities, and Threats that your company may encounter? SWOT is a TOOL that helps hotel owners access favourable business opportunities in the context of market trends and get better insights into those areas needing adjustments and improvement.


Answering these questions can help you identify what areas need attention and how to improve them.


In this writing piece, we have covered the basics of SWOT analysis and some common examples and DIY steps for performing a SWOT analysis.


What is SWOT Analysis for hotels?

A SWOT analysis is a classic tool used in the hospitality industry for planning and decision-making. SWOT is an acronym for STRENGTH, WEAKNESSES, OPPORTUNITIES, and THREATS. The main aim of conducting a SWOT analysis is to discover the benefits while watching for what could go wrong.


SWOT analysis for Hotels comes in handy when deciding whether to proceed with specific changes or investments in your hotel by analyzing the pros and cons.


Performing a SWOT analysis is crucial in a hotel business because it enables you to detect opportunities and shows you how to attack specific bottlenecks ahead of time.


It allows you to plan and approach problems proactively

It guides you towards making an accurate decision that will contribute to building a solid strategy for your hotel business.

It helps you pinpoint where your strengths lie, and you can leverage them positively.

It gives you insight into newer opportunities in the industry

You discover newer ways to detect, minimize or avoid threats and their impact


SWOT analysis Hotel

6 Easy steps for a hotel SWOT Analysis:


Your SWOT analysis will breed a bad result if it’s not done orderly. But before you begin your SWOT analysis, you must understand your competitors and the hotel industry. Once you have researched your competitors, you can proceed to your SWOT analysis.


Determine your hotel’s objectives

SWOT analysis is practical when considering a change or trying to figure out if the decision is worth the time and money it’ll require. In the hospitality industry, SWOT analysis can be used for significant projects like establishing a new property, refurbishment, or re-branding. You can also adopt SWOT analysis for minor decisions that have a significant impact, such as purchasing a piece of modular furniture, adopting new in-room technologies, and acquiring or switching to a new CRM software.


What key initiatives, purchases, or projects do you plan on embarking on? A SWOT analysis will help you brainstorm the advantages as well as the disadvantages involved. It will give you a clue whether to move to proceed with the planned project.


Carefully examine your metrics and results

Before mapping out your strengths, weaknesses, opportunities, and threats, you must gather all the data you can about your hotel and the planned initiatives on which you can lay your hands.


Metrics and KPIs are a fundamental part of this process, as they provide actual data that you can work with.


A few metrics to include in your SWOT analysis include:

Average daily rate

Sales circle length

Event Activity

Web traffic percentage of direct bookings

Percentage of occupancy

Revenue per available room

Customer feedback, comments on social media, online reviews, and feedback.

If you can’t find any actual data or metrics, you can just include that as weaknesses. Whether you are doing the SWOT analysis virtually or in person, it is crucial you make it visual. Arrange all your written points on a slide, a whiteboard, or paper.

Map your hotel’s strengths As you already know, strengths refer to the positive traits available in your hotel. They also include internal factors that you can control. Strengths are those advantages your hotel has at its disposal. Strengths can include both tangible and intangible benefits. Examples of strengths include your intellectual property, capital, and proprietary software. While the intangible strengths may be your staff level of training or professionalism, your meals and beverages are better than your competitors, and so on. Remember, an aspect of your business venture is only termed strength if it contributes to your business growth. If your competitors provide the same or more value than you in a specific area, it is not considered a strength. Consider your hotel’s weaknesses Weaknesses are areas of your hotel that limit growth or optimal performance. They are primarily internal factors that are beyond your control. A SWOT analysis isn’t complete if we focus only on the advantages. It is best to discover those weaknesses and deal with them ASAP. To deal with your weaknesses, find out what your competitors are doing better than you. What are your customer’s pain points and disappointments? What areas do guests give a thumbs-down? What part of your sales process is getting short? Finding answers to these questions will help you identify and transform your weaknesses Look for opportunities In the hospitality industry, opportunities are rare openings for a remarkable turnaround, as long as you can identify and leverage them. Unlike your strength and weaknesses, opportunities are external factors that usually come from happenings outside your venture. Sometimes opportunities appear as developments or trends in the industry. Spotting and taking advantage of them can contribute significantly to your hotel’s ability to level up in the industry.

A few helpful ways to stay abreast with opportunities include: Subscribing to hotel trends and newsletter

Subscribing to industry-related gist and blogs

Social listening and keeping a tab on competitor’s websites

Turning on Google Alerts for hotel-related keywords

Additionally, some opportunities could come in the form of increasing bookings, boosting your profits, and finding ways to improve guest satisfaction scores. Dealing with threats Generally, threats are situations that can affect your hotel business, such as shortage of staff and OTA changes. It is safer to anticipate threats and to take prompt action against them. To help you deal with threats, think about those bottlenecks you encounter in the industry. Always consider what other hotel owners are doing to know whether you should be switching emphasis to usurp the challenge. But keep in mind that not everything your competitors do might be right for you, and try not to copy them without knowing how it will benefit your venture. Be sure to find out more potential threats. Does your business have a cash-flow problem or bad debt? Beware of these threats. If you're looking to do a SWOT analysis for your hotel, there are some things you should consider.


For one thing, there's the revenue and forecasting report. This is an essential part of the industry and can give you insight into how your hotel is performing. You can also analyze various departments to see which department is contributing most to increasing revenue


Another important factor to consider is the market share index. This will tell you how well your hotel is doing against its competitors, both in terms of revenue and overall performance.


You should also look at the four main areas of a SWOT analysis: strengths, weaknesses, opportunities, and threats. They all play a role in helping you determine what type of strategy or plan will work best for your business goals


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