SWOT analysis of Premier Inn

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SWOT analysis of Premier Inn

This is a detailed SWOT analysis of Premier Inn. It aims to examine the strengths and the weaknesses of Premier Inn. It also aims to explore some of the opportunities and the threats concerning the company. Premier Inn is a British hotel chain and is the largest hotel and restaurant group in the country. It is a Whitbread owned brand.

Strengths of Premier Inn

Profitability

With an occupancy rate of more than 80% and an operating profit risen by 7.4% in 2017 to £468 million, Premier Inn is one of the most profitable hotels in the UK.  However, the first quarter of 2018 has not been great, probably due to some capital investments in the real estate properties, refurbishments, décor, cladding etc.

Strong presence in the UK

Premier Inn had 60,990 rooms by the end of 2015 which made it the largest hotel group by bedroom count in the UK. This is set to carry on in 2018 and coming years as 24,000 bedrooms set to open before the end of 2020 bringing the total to nearly 85,000 (Harmer, 2016).

Brand Image

Premier Inn has established a very good brand image over the years. Kid-friendly and bike-friendly image coupled with free Wi-Fi 24/7 has been a great selling point for the hotel. Premier Inn was voted the ‘Best UK economy hotel brand’ at the British Travel Awards 2017 for the 7th consecutive year (Premier Inn, 2018). Indeed, the hotel has won a number of awards awarded by some of the prestigious organisations in the UK.

Weaknesses of Premier Inn

Big issues with hygiene

An undercover filming by channel 4 reporters in February 2018 found housekeeping staff (agency workers) hired by Premier Inn using the same guest towels to clean the entire bathrooms, including the toilets (Newton, 2018). In the same programme, the trade union Unite expressed concerns for Premier Inn’s exploitative work practices.

Limited global presence

Limited global presence is a weakness of Premier Inn. Compared to some other market giants, Premier Inn operates in a very limited number of countries.

Opportunities for Premier Inn

New market

After a successful entry in Germany, Premier Inn is finally getting into the Republic of Ireland which has already seen the success of Costa Coffee brand.

New décor

Some properties have been trialling an upmarket room design and décor which is a nice surprise to guests in the budget hotel segment. During 2018, a contract has been given to a firm of contractors for complete renewal of floor and wall tiling, as well as sorting out the issue of inflammable cladding on some of the properties.

Threats to Premier Inn

Competitors

While the main competitors of Premier Inn are Holiday inn, Easyhotel, and Ibis within the same category of budget hotel segment, there is strong competition from Marriott as well as many other small and independent hotels.

Legal threats

Due to all the issues mentioned in the weaknesses section above, there is a high risk of legal actions against Premier Inn if it does not take actions, arguably from Unite trade union and from health and safety executives.

Concluding statement

From the research conducted on the ‘SWOT analysis of Premier Inn’, it is cleat that Premier Inn is going to remain the leader in budget hotel segment in the UK. The competition pressure is mainly price-based, with some of the competitors going as low as £19 per night and breakfast as low as £2.95. However, as the hotel, restaurants and coffee shops complement each other, Premier Inn has a competitive model which is hard to emulate by others.

We hope the article on the ‘SWOT analysis of Premier Inn’ has been useful. You may also like reading SWOT analysis of Hilton Worldwide. Other relevant articles for you are:

SWOT analysis of Marriott International

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Last update: 05 October 2018

References

Harmer, J. (2016) “Premier Inn remains the largest UK hotel brand as 24,000 bedrooms set to open before 2018” https://www.thecaterer.com/articles/366617/premier-inn-remains-the-largest-uk-hotel-brand-as-24000-bedrooms-set-to-open-before-2018  [Accessed on: 05.07.2018]

Newton, J. (2018) “Housekeepers ‘use the same guest towel to clean the entire bathroom, including the TOILET, and work unpaid extra hours’ at Premier Inn” http://www.dailymail.co.uk/travel/travel_news/article-5380489/Premier-Inn-cleaners-use-towel-clean-bathroom.html  [Accessed on: 05.07.2018]

Premier Inn (2018) Our awards, available at: https://www.premierinn.com/gb/en/why/awards.html (Accessed on: 04.10.2018)

Price, P (2017) “Premier Inn ‘world’s strongest hotel brand’ https://www.thecaterer.com/articles/499276/premier-inn-worlds-strongest-hotel-brand  [Accessed on: 05.07.2018]

Photo credit: Premier Inn

Author: Veeren Gowrea

Veeren Gowrea is a lecturer in Tourism & Hospitality management. He holds an MBA in Strategic Management and MSc in Human Resource Management from the University of Wales, UK. He also holds a Postgraduate Certificate in Higher Education (PgceHE) from Birkbeck, the University of London. He works as a visiting lecturer at a number of institutes in London.