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I'd like a SWOT analysis of Element Hotels
Hi! Thanks for your request for a SWOT analysis of Element Hotels. The most useful sources I found to answer your question were industry reports and leading news articles. In short, Element Hotels has implemented many changes that distinguishes them from other brands, and has attempted to reduce its weaknesses to stand out against competitors. There are opportunities for growth by expanding into high demand areas, such as the Middle East. However, threats exist in the form of the vast number of competitors, both internal and external to the Marriott chain. Below, you will find a deep dive of my findings.
STRENGTHS
Element Hotels will soon be implementing a lodging concept designed to meet the needs of travelers who desire unique accommodations. Communal guest rooms consist of four private guest rooms that share a common living area (kitchen, dining, and lounge space). This eco-friendly and flexible design is consistent with Element's modern, forward-thinking approach.
2. Expansion
At the end of 2016, there were 23 Element Hotels worldwide. Marriott anticipates opening 14 additional Element Hotels in 2017 to increase their global presence and expand the brand. Furthermore, through 2018, Element plans to open 22 additional properties throughout the United States and Canada, more than doubling its current North American presence.
3. Eco-conscious
Element Hotels incorporates many distinctive details that are not only stylish, but sustainable, as well. For example, they offer amenities such as loaner bikes and charging stations for electronic vehicles. In 2008, Element pursued universal LEED certification for high-performance buildings. "Sustainability is no longer optional; it’s become a requirement among a growing number of travelers worldwide, and Element is the perfect choice with its clean, modern design and eco-conscious programming," notes Global Brand Leader Brian McGuinness.
4. Culinary Excellence
Rise, Element Hotel's signature breakfast, makes use of healthy, fresh ingredients to create foods that are convenient for their guests. Such foods include breakfast wraps and smoothie shooters. Also included is a rotating menu of handmade granola. Additionally, three times per week, the hotel's happy hour, Relax, offers guests the opportunity to drink, eat, and mingle with one another.
5. Rewards
Element Hotels participates in the Starwood Preferred Guest reward program. In addition to convenient policies of no black-out dates, late checkout, and Cash + Points, the program leverages apps for Android, iPad, and iPhone that help the global traveler create a more personalized experience.
6. Technology
Marriott plans to largely focus on technology within its Element brand. Automated beverage-dispensing systems are currently being tested. Additionally, portable wine carts that can be activated by a guest's room key are in the pipeline.
WEAKNESSES
1. Just Another Marriott Brand
In 2016, Marriott acquired the Starwood empire, which consisted of approximately 12 brands. This merger brought Marriott's total number of brands to around 30. One problem that has arisen is the challenge of marketing each of the brands individually. With the presence of so many brands under the Marriott umbrella, there appears to be less that makes the Element brand unique.
OPPORTUNITIES
1. Global Hotel Rate Increase
Globally, hotel rates are expected to increase 1-3% in 2017. North America and the Southwest Pacific regions are expected to see the heaviest inflation due to lack of supply. The Middle East is also expected to see overall rate increase as a result of growing demand.
2. Emerging Markets
Emerging markets are set for a 4.2% growth in 2017. Asia and India continue to be front-runners in this area, while Brazil, Argentina, and Columbia are also expected to experience strong growth.
THREATS
1. Airbnb
Airbnb was once criticized for its very un-hotel-like offerings where guests lived alongside their hosts. Element's introduction of communal guest rooms is very similar to Airbnb's approach. While the communal guest rooms could be viewed as a strength of the brand by many, Airbnb will likely become a viable competitor of Element.
2. Competition Among Marriott Brands
With the acquisition of Starwood, Element is faced with increased competition by brands under the same parent company. This competition is not likely to be eliminated. According to Marriott International Chief Arne Sorenson, many properties are still owned by real estate developers who are invested in a particular brand, making it impossible to retire certain brands even when they are not overly productive or lucrative.
3. Brexit
The U.K.'s decision to leave the European Union, or Brexit, diminishes the outlook for all hotel brands in Europe, including Element Hotels. Potential issues related to Brexit include depreciation of the U.K. pound and greater exposure for countries that have strong trade relations with the U.K. Led by Brexit, other European nations have considered similar actions, creating a fear of "Brexit Contagion," which could negatively impact investment decisions.
CONCLUSION
To wrap it up, there are many strengths available to the Element brand, including sustainability, technology, the introduction of communal guest rooms, rewards programs, culinary excellence, and the potential for expansion. Opportunities exist in the form of an anticipated increase in hotel rates and the presence of strong emerging markets. Weaknesses and threats also exit; however, primarily in the form of competition, both externally and within the Marriott company.
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