Business environment is referred to the surroundings along with internal and external factors that largely affects the business. The following report will highlight various factors associated with the Hotel Indigo which is the chain of boutique hotels and is a part of well-known Inter Continental Hotels Group. The report will reflect the factors such as Political and legal, economic, cultural, technology, environment that would assist the business in making marketing decisions. Competitive analysis, market and consumer research are also the crucial part of the situational analysis of the business. Therefore, it can be stated that situational analysis is important to identify the strength and weaknesses of the business so as to undertake the planning process as well as to take prioritised actions.
Hotel Indigo has number of opportunities that has and would help the business to grow in an international market. New geographical market is considered as one of its greatest opportunities as it has opened its chain in United States, China, Spain, United Kingdom, Australia and at more locations (Hotel Indigo, 2020). This has helped the business to strengthen its customers base and also reflect its positive brand image. Hotel Indigo is also well known for its products and services especially its bar and restaurant. For an instance, the hotel has tapped with the Adelaide Market’s for getting the produce for its seasonal appeal for food and drinks.
Along with the business opportunities, there are certain threats that are crucial to know about the hotel that will help in developing the strategies to make profits out of it. Global crisis is one of such threats that affects the business of Hotel Indigo very badly. For an instance, the situation of Covid 19 has largely influenced the hospitality industry in terms of revenue and profitability. Therefore, it is crucial for the business to develop the marketing strategies that are more attractive and beneficial to the customers and can also overcome the threats related to competition in the market.
Along with the few mentioned threats and opportunities there are some external factors that directly or indirectly would impact the business decision making while working in the hospitality sector or industry of Australia (Patiar and Mia, 2015). These factors are likely to act as threats and opportunities for the Hotel Indigo Adelaide market.
Political factors play an important role in the success or failure of hotel industry. It has been observed that political change can directly or indirectly affects the business drastically. Though the government of Australia is being friendly and supportive in terms of tourism law & policies such as regulation of commercial activities and taxation. Due to a strong hold of government political situation is stable and best suitable for Hotel Indigo so they have better environment to grow and provide excellent services to their guests. It has been noticed that usually tourist loves to explore destinations that are supported by the government (Chung & Choi, 2018).
Unstable political situation is a big no for the tourist as it hampers their stay in the country. However, political factor can dramatically impact the hotel sector as a one adverse decision against the hotel and travel sector could have led to vast financial loss and impacts the economy growth. For example, if any travel bans or issues regarding visa has been created by the leading political party of the nation can badly impact the business. Additionally, tax policies regulated by the government should be reform in the favor of hotel industry. For instance, lower taxes could help in growth and improvement of the hotel sector. Hotel Indigo is experiencing tremendous growth due to the less pressure of tax. Pleasant government support can give the hotel an opportunity to increase the accommodations and other services for guests (Kasim & Dzakiria, 2016).
Economic Factor has potential power that can fluctuate the hotel industry and its business growth. Rapid economic change can adversely affect the hotel sector especially the luxury hotel such as Hotel Indigo. The economy of Australia depends of various factors such as interest rates, CPI, Gross Domestic Product, inflation and taxation rates. It has been identified that in Australia the tax policies regarding luxurious goods and services are comparatively high that somehow impacts the hotel sector because if the government implement high tax policy on hotel sector it will surely impact the hotel as well as tourist industry (Khan et.al. 2020).
For instance, increase in hospitality taxes and charges will impact the decision of the tourists as they will choose the cheaper destination with low charges. Additionally, factors such as foreign exchange rates are a crucial economic factor that impacts and attracts the foreign travelers to selects the best hotel services. However, Australia being one of the developed countries enjoy stability in terms of economy but due to little bit of fluctuation sometimes adversely affects profit and growth of Hotel Indigo. Other than that, factors such as inflations, recession, demand in markets, economic gaps, cost of services, mergers and acquisition also considered as an important aspects of hotel sectors that directly or indirectly impacts the growth of the hotel (Kim et. al. 201