SWOT Analysis/ PESTEL Analysis/ Porter’s Five Forces Progre…

Hello Everyone,

This is a ‘Are you on the right track?’ assignment worth 15 points, which will start to build toward the Final Project. It is a mini version of the Final Report, and it is intended to reduce the pressure on the final project, and to make sure you are ‘on the right track’. NO VIDEO required for this assignment.

As you know,

PRIORITY LEVEL – HIGHLY CONFIDENTIAL

Project ‘SPP’

Susan Kline, VP of Global Development for Hilton Hotels and Resorts Corporation.

As previously discussed, Hilton Hotels and Resorts Corporation is devising its strategy moving forward from the COVID 19 pandemic. It is critical that Hilton Hotels focus their investment strategy for the next five years.

The SWOT/PESTEL/Porter’s Five Forces is a Perspective through the lens of a professional Developer/Consultant/Architect/Designer – and Independent Contractor (YOU) hired by Hilton (not through the eyes of an employee or manager). Hilton wants to get a handle on the near and mid-term future (5 – 15 years). Is it a good investment of time, money and resources to invest or not? Your report will help them make that decision.

Your 3 tasks are to complete a typed report to include:

1) A SWOT Analysis for Your particular country

2) An in-depth PESTEL Analysis

3) A thorough Porter’s Five Forces Framework

The information you provide will be instrumental in Hilton Corporation’s decision-making process.

For this assignment you need to consider the entire portfolio of Hilton brands to determine which one(s) are most appropriate in the country you are studying.

The assignment has two ‘deliverables’: An Executive Summary (SWOT/PESTEL/Porter’s Five Forces) with a recommendation (per region of the country) to invest or not to invest with reasons supporting your decision; and a Recorded Video that includes a PowerPoint presentation of your findings and recommendations. The Executive Summary is worth 15 points and the Recording is worth 10 points. The rubric located in the syllabus will be used for grading purposes.

Selection of Countries for PESTEL and SWOT and Porter’s Project

Argentina, Australia, Austria, Brazil, Chile, China,

Columbia, Croatia, Denmark, England, Egypt, Finland, France, Germany,

Greece, India, Indonesia, Ireland, Italy, Japan,

South Korea, Malaysia, Nicaragua, Netherlands, Norway, New Zealand,

Peru, Philippines, Poland, Portugal, Qatar,

Romania, Saudi Arabia, Singapore,

South Africa, Spain, Sweden, Switzerland,

Taiwan, Thailand, Turkey, UAE, Venezuela, Vietnam, Zimbabwe

I will do my best to update you frequently, as countries are chosen, so you are aware of available locations.

SWOT/PESTEL/Porter’s Five Forces Analysis for Hilton Global Growth (Project SPP)

Project Brief:

Scope, Key Objectives, Deliverables, Timelines

Perspective:

Through the lens of a Developer/Consultant/Architect/Designer – and Independent Contractor hired by Hilton

Scope:

We look forward to your professional, comprehensive brief of this country. The SWOT Analysis, PESTEL Analysis and Porter’s Five Forces Framework will help to determine Hilton Hotels and Resorts expansion plans for the foreseeable future (2025-2035). The assignment you are requested to perform is of a highly confidential manner, and it is incumbent upon you not to share any of this report with any business or hospitality source.

Key Objectives:

Many factors affect the success and growth of the hotel industry, and these factors vary by country. Everything from governmental changes to high stake competitors and the uncontrollable weather impedes the hospitality and tourism industry. As a corporation we have dedicated in excess of 7 billion dollars to expansion. However, we are committed to invest only in countries that are moving in the right PESTEL direction, AND ARE EXPECTED TO MOVE IN AN UPWARD PROJECTION INTO THE FORSEEABLE FUTURE (2025-2035).

You are requested to remain objective in your analysis, and do not feel obligated to provide a positive report if there is none. You are charged with providing an objective recommendation: summary statements must be accompanied with facts, data, forecasts, etc., without prejudice or bias in favor or against.

When you advise Susan Kline, V.P. of Development, IT IS IMPORTANT THAT YOU…..advise as to which geographical area/s (in your chosen country) is/are best to invest (use a map the dots or circles), and which Hilton brands are best for those areas. For example, is it best to develop the traditional Hilton Hotel brand, or the Waldorf Astoria, or the True, or the DoubleTree, or the Homewood Suites brand, etc.? (Hint: the brand will be based largely on your PESTEL and particularly the economic and social factors – e.g., more upscale or budget or for millennials of for seniors or for families or businesspeople).

Given your pre-approved country, this is the assignment for this Progress Report (min-version of the Final):

1) Research and write a Summary Statement of each SWOT factor (e.g., Strengths) with 4 sub-factors that support each factor. sentences per factor

2) Research and write a Summary Statement of each PESTEL factor with 4 sub-factors that support each factor.….for the country you selected.

3) Research and write a Summary Statement of each of Porter’s Five Forces 4 sub-factors that support each force.….for the country you selected.

Include an Introductory Paragraph, a Map (i.e., a full page with major cities and/or regions noted), and Research sources/references, ASA style)

Examples follow:

1) SWOT

Strengths

There are more than 1000 classified hotels with a room availability of around 97,000 rooms which can easily cope with the demand of tourists. Furthermore, there are also a number of international names in the market which meet the needs of international tourists on their visit to India

Weaknesses

…………………………………………………..

Opportunities

…………………………………………………

Threats

……………………………………………….

2) PESTEL

Political factors: The government holds extensive power over the hotel industry (summary statement)

Travel bans can kill the hotel and tourism industry.

The government has a stronghold over the hotel industry. For instance, if the political party in power sets a travel ban, it could hurt the tourism and hotel industry immediately.

Hotel owners would enjoy tax reform.

Another thing the government controls are taxes. In the United States, should there be a tax reform in which hotel owners pay lower taxes.

Fear during presidential elections.

Since the government affects this industry so intensely, many hotel owners are on edge during election time, as a new President with new ideals can swiftly impact the hotel industry and overthrow the previous Presidents laws.

3) Porter’s Five Forces

Your self-research will address these

Do well!!!

Below is a brief on a sampling of considerations, which will help you gain insight as it relates to the final Project SPP written Executive Summary report and Recorded Audio/Video PowerPoint presentation to be viewed by the Hilton Hotels Corporation Board of Directors. The following SAMPLE TOPICS (Note: yours will be different) may start you in the right direction:

1) SWOT Analysis that identifies the positive and negative internal and external environments

2) PESTEL Analysis factors that are germane to your selected country

3) Porter’s Five Forces Framework

1) SWOT Analysis of Hotel Industry

Hotels are one of the most important services which directly affect the arrival of tourists to a particular country. Obviously, it would not be possible for tourists to stay in a place if there are not enough hotel rooms available. Therefore, the hotel industry plays a significant role when it comes to tourism as it is a support service which will affect the number of tourists visiting a particular place.

SWOT analysis of hotel industry in this regard can provide a thorough insight to whether or not the industry is contributing towards the achievement of its goals. For now, lets consider the hotel industry in India, which is one of the fastest growing countries in the world.

Strengths

The first step to a SWOT Analysis of hotel industry in India will be identifying its strengths. There are more than 1000 classified hotels with a room availability of around 97,000 rooms which can easily cope with the demand of tourists. Furthermore, there are also a number of international names in the market which meet the needs of international tourists on their visit to India. In addition, there are many tourist attractions, and the cost of labor is low in comparison with the rest of the world, thus, providing better margins for hotel owners and higher growth potential in the industry.

Weaknesses

Next in line is assessing the weaknesses. One major restraint to the hotel industry of India is the cost of land, which is as high as 50% of the total project cost, against a low 15% abroad. The country also has a higher tax structure as compared to other countries which inflates the hotel expense a great deal. Furthermore, the services offered by some hotels are limited and not comparable to world standards.

Opportunities

The third strategic element to a SWOT analysis of hotel industry in India is the opportunities. The country boasts a number of attractions and has unmatchable diverse topography making it an ideal destination for tourists. As a result, the number of inbound tourists is expected to increase at a quick rate, further pushing the demand for hotels. Additionally, the demand for both national and inbound tourists can easily be managed as the peak season. For international tourists, arrival is between September and March, while most national tourists prefer to wait until school holidays, which are during the summer months.

Threats

Where there are opportunities, you will also find threats. Several hotels in India are being replaced by guesthouses, thus, adversely affecting the hotel industry. Political unrest in the country also plays its part in reducing tourist traffic and consequently affects business of the hospitality industry. The countrys economic condition has a direct impact on the earnings of hotels. As a result, the staff might not be trained well enough to meet international standards.

2) PESTEL Analysis

Political factors: The government holds extensive power over the hotel industry

Travel bans can kill the hotel and tourism industry.

The government has a stronghold over the hotel industry. For instance, if the political party in power sets a travel ban, it could hurt the tourism and hotel industry immediately. All it takes is one decision and a country loses the vast majority of its economy.

Hotel owners would enjoy tax reform.

Another thing the government controls are taxes. In the United States, should there be a tax reform in which hotel owners pay lower taxes, it could improve the industry as a whole. Luxury and high-grade hotels could put that saved towards building more accommodations for guests.

Fear during presidential elections.

Since the government affects this industry so intensely, many hotel owners are on edge during election time, as a new President with new ideals can swiftly impact the hotel industry and overthrow the previous Presidents laws.

Economic factors: Weakened currencies, economic cycles, and tailored offerings

A big investment expected to grow.

Hospitality is one of the biggest investment sectors for global investors, especially within the United States. Continued growth is expected into 2020 and beyond.

The strength of currency can bolster the industry.

The strength and weakness of currency can affect the attractiveness of a vacation spot. For example, if international currencies are stronger than the American dollar, people outside of the United States will want to visit.

The importance of economic cycling.

While all businesses are affected by economic changes, the hotel industry is one of the most susceptible to its influence. It goes through economic cycles first and comes out first. Whether it comes out successfully depends on a few primary factors, including unemployment rates, job growth, and travel spent.

Tailoring to patrons in varying locations.

Hotel chains are improving profits and revenue by acquiring worldwide resorts, like how the Marriott International acquires Starwood Hotels & Resorts Worldwide. InterContinental Hotel Group (IHG) also changes its offerings to guests based on the location of the hotel. Guests will appreciate offers tailored to them, which will encourage them to come back again in the future.

Sociocultural factors: Customers want cheaper hotels and turn to Airbnb instead

Big trouble with Airbnb.

Airbnb is the industry biggest competition. Travelers, particularly millennials, enjoy the mass selection of rooms Airbnb offers. You can quickly and conveniently book your room through an app and its often less expensive than hotels in the area.

Hotels often run out of rooms during peak seasons, and when they dont, they jack up the room prices. At one time, trying to find a different hotel would be the only option, but now you can check Airbnb and likely find something suitable and cheaper. This is a huge problem for hotels who often see a hike in profit during peak seasons when rooms are scarce.

Hotels do offer more than the standard Airbnb room. Many hotels have additional facilities, like pools, a gym, and even massage parlors. You can eat at the many restaurants built within, like Starbucks and IHOP, too.

Technological factors: Social media, blogs, and scratching reviews

New technology to be wary about.

Years ago, hotels only used traditional media (print and broadcast), but now there are new media brought forth via the internet to consider. Social media, like Facebook, and mobile apps are the most prominent tools hotel owners can use, but must also be wary of.

Fast sharing news thanks to the internet.

Because of social media, the news is available and updated 24/7. Any incidents close to the hotel can be reported within minutes, shared online by thousands, and have articles written up by media outlets in seconds. Its so quick that hotel owners cant do much to stop it.

Reviews on blogs can make or break a hotels reputation.

Anyone can write a review and post it on a blog or share it on social media. People who stay at hotels will take photos and write up an honest post about their experience. This is a good and bad thing for the hotel industry. Hotel owners who are confident that their hotels are worthy will pay social media influencers to write about it. Hopefully, this will grab attention and the hotel chain will gain new customers. However, it only takes one scathing review to destroy a reputation.

Traveling websites forces hotels to remain competitive.

Travel websites have made it easier for people to price shop hotels. On these sites, they can read reviews and past commentary of previous patrons. As such, hotels must remain competitive, otherwise, patrons will book a different chain.

Environmental factors: The importance of the local climate

Hotel guests stay in hotels for a variety of reasons, such as when visiting family, friends, on business, or vacationing. When vacationing, customers want to stay somewhere warm and relaxing. The weather in the local area is the deciding factor for whether someone chooses to stay at a certain hotel. This isnt something hotel owners can control, but they must understand the seasonal differences before pricing their rooms and adjust accordingly.

Legal factors: Two major laws nearly all hotels must follow

Crime rates ruin hotel profit.

Everyone wants to stay somewhere safe. If a hotel is near an area with high crime rates, itll struggle to survive. Choosing a spot with low crime is crucial for all hotel owners, otherwise, customers wont stay at their locations.

Innkeeper laws.

Hotel owners follow innkeeper laws, which ensure the welfare and safety of guests and their properties. In some locations, the innkeeper law must be posted inside the door of every guest room of the hotel. In most cases, the innkeeper law will state how much compensation the innkeeper will pay guests if their property is stolen or damaged.

Truth-in-menu laws.

Any hotel with food or beverage establishments within must follow truth-in-menu laws, which means the food establishment must be truthful about the food and beverages served to guests. The establishment needs to be honest about the calories in the good and nutritional ingredients of the dishes.

Hotel Industrys PESTEL analysis: Bottom line

The hotel industry is experiencing major competition with corporations like Airbnb, which offer a variety of rooms for cheaper than the average hotel room. The industry is also overly reliant on the government; everything from potential tax reform to travel bans can cause the industry to crumble.

This is why its so important for hotel owners to understand how the six factors of PESTEL analysis effect this industry in this country. If they dont, they may find themselves on the receiving end of scathing reviews online, lack of customers because of environmental issues like the weather, or into legal trouble like if hotel owners were to violate innkeeper laws.

3) Porter’s Five Forces Framework

Conduct self-research to identify the five forces and apply them to the country you selected

A.

B.

C.

D.

E.

Conclusion and Recommendations

1) Include an Executive Summary (8-12 pages)

2) Add your assessment and recommendation whether to invest in this country, which brand(s) may be appropriate, and why. (2-3 pages)

(NOTE: There is a Progress Report worth 12 points, which is due prior to this final report. Therefore, the entire final project is worth 35 points)

Examples of the Progress follows:

Here are some tips and hints, so you can score high next month on the Final Project:

Include a map that is easily readable (i.e. large enough to see; and marked with the major cities and regions)

Include a dynamic introduction.

List at least FOUR items per factor (i.e., 4 items per Strengths, 4 per Weaknesses, …………OT, PESTEL, Five Forces.

Include plenty of statistics and references to back up your comments. Here is a summary example of SWOT and PESTEL:

SWOT Analysis: Vietnam
Strengths
1. Rapid Tourism Growth Vietnam welcomed 18 million international tourists in 2019 (pre-pandemic), with a strong recovery post-COVID-19 (12.6 million in 2023) (Vietnam National Administration of Tourism [VNAT], 2024).
2. Young and Affordable Labor Force Over 60% of the population is under 35, ensuring a steady supply of workers for the hospitality sector (World Bank, 2023).
3. Strategic Geographic Location Proximity to China, Thailand, and Singapore enhances regional business and leisure travel connectivity.
4. Government Incentives for Tourism Policies like e-visa extensions (90-day validity) and tax breaks for hotel developers encourage investment (Vietnam Ministry of Planning and Investment, 2023).

Weaknesses
1. Infrastructure Gaps Outside major cities, transportation (roads, airports) and utilities (electricity, water) remain underdeveloped, increasing operational costs (Asian Development Bank [ADB], 2023).
2. Bureaucratic Red Tape Complex land ownership laws and slow permitting processes delay hotel projects (World Bank Ease of Doing Business Report, 2023).
3. Seasonal Tourism Dependency Coastal resorts experience low occupancy during monsoon season (MayOctober).
4. Shortage of Skilled Hospitality Workers Despite abundant labor, luxury service training is limited, affecting upscale hotel operations.

Opportunities

1. Domestic Tourism Boom Vietnams middle class (36 million by 2030) is driving demand for mid-scale and premium hotels (McKinsey & Company, 2023).
2. MICE (Meetings, Incentives, Conferences, Exhibitions) Market Growth Hanoi and Ho Chi Minh City are becoming regional business hubs, with rising demand for conference hotels (JLL Vietnam, 2024).
3. Eco-Tourism Expansion Untapped potential in Sapa, Mekong Delta, and Phong Nha-Ke Bang National Park aligns with Hiltons sustainability initiatives (Vietnam Ecotourism Association, 2023).
4. Digital Travel Adoption Online travel bookings (OTAs like Booking.com, Agoda) grew by 25% in 2023, enabling direct-to-consumer sales (Statista, 2024).

Threats
1. Geopolitical Risks South China Sea tensions with China could disrupt regional stability.
2. Economic Volatility Inflation and currency fluctuations (Vietnamese dong) impact hotel profitability (IMF, 2024).
3. Over-Tourism in Key Destinations Da Nang and Phu Quoc face congestion, risking brand reputation.
4. Climate Change Vulnerabilities Coastal erosion and typhoons threaten beachfront properties (World Bank Climate Risk Profile,2024).

PESTEL Analysis: Vietnam
Political
1. Stable One-Party Rule The Communist Party maintains control, ensuring policy continuity but limiting political dissent.
2. Pro-FDI Policies Tax holidays and relaxed land lease terms attract hotel investors.
3. Visa Liberalization 90-day e-visas for 80+ countries boost tourism (Vietnam Immigration Department, 2024).
4. Corruption Concerns Bribery remains an issue, increasing operational risks.

Economic
1. Strong GDP Growth (6.5% in 2024) Outperforming regional peers like Thailand and Malaysia (World Bank, 2024).
2. Labor Cost Increases Minimum wage rose 6% in 2024, squeezing hotel margins (Vietnam General Confederation of Labor, 2024).
3. Dependence on Exports & FDI Vulnerable to global trade wars (U.S.-China tensions) (IMF, 2024).
4. Rising Urban Disposable Income Ho Chi Minh Citys average monthly income reached $450 in 2023, fueling domestic travel (VNAT, 2024).

Social
1. Urbanization (40% by 2030) Demand for city hotels and serviced apartments is rising.
2. Tech-Savvy Population 75% smartphone penetration drives mobile bookings (Statista, 2024).
3. Cultural Heritage Appeal UNESCO sites (Hoi An, Hue, Ha Long Bay) attract heritage tourists.
4. Workforce Mobility Rural-to-urban migration ensures staffing availability.

Technological
1. High Internet Penetration (73%) Online travel sales hit $2.1B in 2023 (Google-Temasek e-Conomy Report, 2024).
2. Smart City Development (Hanoi, Ho Chi Minh City) 5G rollout and IoT adoption benefit business hotels.
3. AI in Hospitality Chatbots (e.g., Luxstay) and contactless check-ins are growing.
4. Cybersecurity Risks Data breaches increased by 30% in 2023 (Kaspersky Lab, 2024).

Environmental
1. Net-Zero Pledge by 2050 Solar energy investments align with Hiltons sustainability goals.
2. Coastal Erosion Threats 30% of beaches may shrink by 2030 (WWF Vietnam, 2023).
3. Plastic Pollution Crisis Single-use plastic bans impact hotel operations.
4. Renewable Energy Push Wind and solar power capacity doubled since 2020 (IEA, 2024).

Legal
1. Eased Foreign Ownership Laws 50-year land leases for hotels.
2. Stricter Labor Regulations New unionization laws increase compliance costs.
3. Tax Breaks for Green Hotels 20% reduction for LEED-certified properties (Vietnam Tax Authority, 2024).
4. Intellectual Property Risks Counterfeit hotel brands are a growing issue.

Please feel free to contact me when you need more information of the Final Report.

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