Hotel Industry Analysis

Industry Analysis

Economic turns affect almost all industries around the world. In event the hotel exertion is an erratic place to be when the economy is in distress. However, if a specific company can deal with scotch pressures by market their differentiating attributes, a hotel can survive. Furthermore, in give to ferment successful at heart this industry one must(prenominal) examine several outlying forces.

For instance, the entry barriers to the hotel industry argon relatively high. An expensive startup cost consisting of property, hotel, and staff are sound the beginning. In order to compete against many of the incorporate leaders one would need extensive amounts of advertising and marketing campaigns. However, at this particular time paltry interest rank and more investors have helped many naked as a jaybird entrances to occur in this industry (Hotel & Motel Management). Although it seems positive for the industry with extremely low interest rates and more financial leverage, it may become a threat as the hotel industry becomes overcrowded.

Rivalry that occurs within this industry is becoming more intense as the number of new entries increase. Another contributing factor to the high rivalry within this industry is the fact that there are few differentiating factors between hotels.



Within the different separates there factors such as price, quality, service, and reward attributes, but all of these are easily copied limiting a sustainable competitive advantage. The number of close substitutes are go up due do this increase in rivalry. For each segment there are several competing companies who offer the same attributes fashioning differentiation difficult.

The bargaining power of suppliers is severely limited just because the power of the hotel chain buyers is so immense. The switching cost for a hotel chain from one supplier to another is fairly small. along with the corporate buying power, the consumer bargaining power is strong...

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