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SWOT Analysis of Hotel Marketing

By: Yogin Vora on February 15, 2010 3 Comments

Hotels form one of the most important support service that affect the arrival of tourist to a country. There are around 1000 classified hotels and the total room availability is pegged at 60,000 rooms.

To find out the present status of this industry we have done a strength, weakness, opportunity and threat (SWOT) analysis. This will help us in understanding this industry and also identify the weak spots.

Strengths

  1. A very wide variety of hotels are present in the country that can fulfill the demand of the tourists.
  2. There are international players in the market such as Taj and Oberoi. Thus, the needs of the international tourists travelers are seen to while they are on a visit to India.
  3. Manpower costs in the Indian hotel industry is one of the lowest in the world. This provides better margins for Indian hotel industry.
  4. India offers a readymade tourist destination with the resources it has. Thus the magnet to pull customers already exists

Weaknesses

  1. The cost of land in India is high at 50% of total project cost as against 15% abroad. This acts as a major deterrent to the Indian hotel industry.
  2. The hotel industry in India is heavily staffed. This can be gauged from the facts that while Indian hotel companies have a staff to room ratio of 3:1, this ratio is 1:1 for international hotel companies.
  3. High tax structure in the industry makes the industry worse off than its international equivalent. In India the expenditure tax, luxury tax and sales tax inflate the hotel bill by over 30%. Effective tax in the South East Asian countries works out to only 4-5%.
  4. Only 58,000 hotel rooms are available in India today, which is less than the Bangkok hotel capacity.
  5. The services currently offered by the hotels in India are only limited value added services. It is not comparable to the existing world standards.

Opportunities

  1. Demand between the national and the inbound tourists can be easily managed due to difference in the period of holidays. For international tourists the peak season for arrival is between September to March when the climatic conditions are suitable where as the national tourist waits for school holidays, generally the summer months.
  2. In the long-term the hotel industry in India has latent potential for growth. This is because India is an ideal destination for tourists as it is the only country with the most diverse topography. For India, the inbound tourists are a mere 0.4% of the global figures. This number is expected to increase at a phenomenal rate thus pushing up the demand for the hotel industry.

Threats

  1. Guesthouses replace the hotels. This is a growing trend in the west and is now catching up in India also, thus diverting the hotel traffic.
  2. Political turbulence in the area reduces tourist traffic and thus thee business of the hotels. In India examples of the same are Insurgency in Jammu Kashmir and the Kargil war.
  3. Changing trends in the west demand similar changes in India, which here are difficult to implement due to high project costs.
  4. The economic conditions of a country have a direct impact on the earnings in hotel industry. We can see that the present economic slowdown in India has let to a 51.6% fall in the industry average net profits for the second quarter of the current financial year, 2000.
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3 Responses to “SWOT Analysis of Hotel Marketing”

  1. Jacob A. Swanson on: 18 March 2010 at 4:39 pm

    Thanks in advance for your kind and generous input.

  2. Del Sandhop on: 22 March 2010 at 4:52 pm

    Hello, A good friend of mine referred me to your site, and I must say that I am very glad that I visited. The information is “gold” to me. I will also be referring some of my friends to your site as well. It is amazing what you can learn online today. Thanks a lot.

  3. Amie Finton on: 23 September 2011 at 3:56 pm

    A SWOT Analysis is indeed an effective way in your marketing plans and strategies. Making this will help you identify your strong and weak points. Upon identification, you can find ways to overcome your weak points and enhance your strong points.

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