SWOT Analysis for Hotel/Nightclub Retox in Melbourne AU

SWOT Analysis for Hotel/Nightclub Retox in Melbourne AU

SWOT Analysis for Hotel/Nightclub Retox in Melbourne AU

Retox Hotel/Nightclub is a 3-star hotel located in Melbourne AU. The hotel has 160 rooms. Precisely, the hotel is located in Fitzroy district. Some of the services offered by the hotel include in-room massage treatment and state-of-the-art gym. Our Unique Selling Preposition (USP) is a restaurant which turns into a nightclub during dinner services. This three-star luxurious hotel is surrounded by other best restaurants, shopping malls, and theaters.

SWOT Analysis

A SWOT analysis encompasses performing a strategic planning to determine the organization’ strengths, weakness, opportunities, and threats (Enz, 2010). Strengths and weaknesses constitute internal factors while opportunities and threats of an organization constitute external factors. The management uses SWOT analysis to evaluate the past, present and future situation of the organization. The SWOT analysis will provide information on the growth of Retox hotel/nightclub as a brand since its inception. Similarly, the SWOT analysis will provide insights into the future of the hotel in the hospitality industry.


First, Retox offers unique service. With the new hotel concept within Melbourne, Retox offers a combined hotel-nightclub concept. No any other hotel in the world provides customers with such services. Therefore, the unique selling proposition of the hotel is anticipated to attract more customers. The unique and innovative ideas of the hotel allow it to penetrate the market gaining a competitive advantage over rival firms.

Second, Retox hotel/nightclub is upgrading its services with advanced technology that entertain travelers and creates multifunctional services. The new technology used in the hotel provide customers with entertainment experience and a virtual concierge. Third, Retox has state-of-art infrastructures. The facilities in the hotel allow it to offer globalized services to customers. Apart from providing customary services such as dining, nightclub, events and meeting, the hotel has unique facilities such as luxurious bed and bath and sensory welcome on arrival.


First, the new hotel lacks brand recognition. Consumers are always not aware of startups; therefore, it will take time for the local to recognize the existence of the hotel. Retox will have to promote brand recognition by investing in marketing and engaging in promotion activities. Second, the hotel faces operational challenges. It is not easy to convert a restaurant into a club. The management will have to spend time and resources to develop a suitable plan that will utilize the available space.


Retox has the opportunity to take advantage of the growing tourism in Melbourne. The growth in the tourism industry is a real-time opportunity for a hotel or restaurant to explore (Lee, Wang, Chien, Wu, Lu, Tsai, & Dong, 2016). Due to the growing influx of people, the hotel will have more customers, and this will increase the revenue. Second, engaging in partnerships with organizations such as Australian Hotel Association and Asahi Beverages bring ideas and key knowledge to Retox. The hotel can engage in consultation and cost cut agreement on corporate rates and supplies (Victoria State Government, n.d.). Third, Retox can rent part of the club for private functions. When Retox offers catering services for private parties, it can generate more revenue compared to engaging in normal operations.

How to Capitalize on External Opportunities

Retox has opportunities such as growing tourism, partnership programs and renting part of the club. The hotel can capitalize on these opportunities by making use of the social media sites to promote brand awareness. The social media marketing and the hotel marketing team can promote and share the idea of Retox’s hotel concept. Increased popularity and brand awareness will attract more investors and customers (Schlesinger, 2016).


The first threat is the lack of startup capital. Starting a hotel business requires a large amount of capital to cater for various operations such as building, promotions, and hiring of employees (Dobson, & Hooper, 2015). Second, Low awareness of the availability of the hotel is a threat if the organization does not take into considerations certain measures. For instance, in the situation when the club is not filled on the opening night, people will develop negative thoughts about the club, and this will discourage future customers. Third, the hotel faces stiff competition from rival firms. Fitzroy district is famous for its nightlife; therefore, due to congestion brought by companies that offer same service, Retox finds it hard to prosper in such condition. Fourth, the existence of illegal drugs in Melbourne is a threat to the potential of Retox to succeed as a business. Australia and Melbourne are known for drugs and drug related violence (Hughes, Ritter, Cowdery & Phillips, 2014).

How to Mitigate ‘Real’ External Threats

One of the threats Retox faces is inadequate startup capital. The hotel can overcome the challenge of capital by borrowing loans from the bank. Financial institutions can offer any amount of credit as long as one is capable of repaying. In the case of Retox, it would be appropriate to take loans with a longer repayment period. Second, Retox can overcome the challenge of low awareness or interest by investing heavily in marketing. Increased marketing campaign will enhance awareness of the brand and keep the hotel busy for the opening. Third, regarding the challenge of competition, Retox can mitigate the issue by delivering high-quality services compared to what competitors offer. Similarly, the hotel can engage strategies such as differentiation and price reduction. Lastly, on the issue of illegal drugs, Retox will prevent the use of drugs by enacting laws that prohibit one from selling or buying illegal drugs in the hotel/nightclub. Also, the management will report any suspicious activities involving drugs to the relevant authority.

Risk Analysis and Mitigation

Some of the top risks that might face the hotel include the following. First, the hotel faces the risk of data privacy. Hotels are popular targets for hackers since they collect information about their customers (Montera, 2012). Retox can mitigate this risk by designing and implementing a strong privacy program that would help to identify and report privacy compliance and risk. The second risk is guest behaviors. Customers are sometimes the biggest threat to the profitability of the hotel. For instance, customers may cause damage to the facility. Retox will handle customer destructions and keep them safe by ensuring that they have internal controls in place. The hotel will have a closer management of the resources.



Dobson, C., & Hooper, K. (2015). Insights from the Australian Tourism Industry. RBA Bulletin, March, 21-31.

Enz, C. A. (2010). The Cornell school of hotel administration handbook of applied hospitality strategy. Thousand Oaks, Calif: Sage.

Hughes, C., Ritter, A., Cowdery, N., & Phillips, B. (2014). Evaluating Australian drug trafficking thresholds: Proportionate, equitable and just? Report to the Criminology Research Advisory Council, Australian Institute of Criminology.

Lee, Y. C., Wang, Y. C., Chien, C. H., Wu, C. H., Lu, S. C., Tsai, S. B., & Dong, W. (2016). Applying revised gap analysis model in measuring hotel service quality. SpringerPlus, 5(1), 1191.

Montera, N. (2012). Hospitality industry risks: data privacy and security. Retrieved from http://www.psfinc.com/wp-content/uploads/psfinc/2016/07/hospitality-industry-risks-data-privacy-and-security.pdf

Victoria State Government. (n.d.). Industry partners. Retrieved from http://www.tourism.vic.gov.au/tourism-industry/industry-partners.html

Schlesinger, L. (2016). Tourism boom to drive record Australian hotel investment in 2016. Financial Review. Retrieved from http://www.afr.com/real-estate/tourism-boom-to-drive-record-australian-hotel-investment-in-2016-20160107-gm1m91


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