Certainly, hotel industry is a huge sector that generates massive amount of revenue all around the world. Majority of people will agree that hotel industry acts as a considerable financial muscle in the economic development so one needs a clear business strategy to make that happen in a productive way. Before making an investment in this particular sector one really needs to know the pros and cons of their hotel industry. So in the light of given facts we can realize that a SWOT analysis is a must have for a hotel industry. This article will cover how to use SWOT analysis for restaurant.

SWOT Analysis

Basically a SWOT Analysis provides us a summarizing overview of the Strengths, Weaknesses, Opportunities and Threats of the particular industry in which we are interested to invest. A SWOT Analysis facilitate us in signifying the key facts such as how our restaurant/hotel is or will be perceived in the particular market and how we will be able to have a sound footing and create a competitive advantage in that market with the help of our unique factors. It provides us an opportunity to adjust or reinforce the particular business practices that can increase our profitability and quality services. Lets look at how strength, weaknesses, opportunities and Threats are defined with SWOT analysis for restaurant and hotel businesses

Strengths Defined with Swot Analysis for Restaurant and Hotel Business

When starting a SWOT analysis for restaurant businesses, the first thing looked at is the strengths of the businesses which are very promising. There is no denying in the fact that this trend is not going to fade as people are not going to stop travelling and they love to eat delicious foods and give a treat to their taste buds from time to time. In light of that we can realize the importance of catering that emerges from this fact and most importantly due to the wedding ceremonies particularly that rely customarily on the Hotel and Restaurant industry. Another potential strength of this sector is that it creates employment opportunities for different segments of people including women, youngsters, labor class, people with special culinary skills as well as linguistic skills, and a lot more. Even though the hotel and restaurant industry involves huge investment but still the labor cost is lower relatively as compared to the higher profit margins especially in the Middle Eastern hotels, Latin, Asian, African countries.

Weaknesses Defined with Swot Analysis for Restaurant and Hotel Business

As far as weaknesses of Hotel and Restaurant Industry are concerned we must be careful about some specific key factors. It is greatly affected by weather changes being high seasonal dependent for majority of cases so when the customers flow is decreased the profit margins are affected as well. The hotel industry suffers from an imbalanced tax structure in certain countries that leads to higher costs for their hospitality services to a whole new high. In fact, some hotels and restaurant also get greater sales taxes as compared to other sub industries for instance bed and breakfasts.

Opportunities Defined with Swot Analysis for Restaurant and Hotel Business

Interestingly there are many opportunities for the Hotel and Restaurant business. First of all, it is an international industry and with increasing globalization it can embrace new prospects of more international tourists and holidaymakers, particularly from evolving economies. Interestingly, with the help of modern technology this industry can market its products and services to a whole new demographic through social media offer them attractive booking and travelling options. Furthermore, the industry owners of hotel and restaurants can discover unique spots of attractions in order to address the entertainment as well as cultural needs of different communities that are worth visiting. The seasonal limitations can be tackled with the help of modern technologies and architectural structure that can promise influx of customers throughout the year.

Threats Defined with Swot Analysis for Restaurant and Hotel Business

One also needs to be vigilant in view of the potential threats relating to this industry. The competition is increasing day by day as low-cost and dynamic hospitality services are rapidly increasing. In addition to that, political instabilities and terrorist activities in some countries especially Asian and Muslim countries can affect hotel and restaurant industry both directly and indirectly. This industry depends a lot on tourists flow and due to political changes or unforeseen events it can be affected in a negative way as they are very touchy about such sort of circumstances.


To conclude with, what is needed is a proactive approach instead of reactive approach to overcome the weaknesses and finding opportunities in threats in order to run a successful and profitable business in this industry with quality driven objectives.