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Porter’s Value Chain Analysis for Hotel Industry

Michael Porter created a concept called value chain analysis to assist firms in identifying the processes that add value for stakeholders and customers. The model is predicated on the notion that organizations are made up of a variety of tasks carried out to develop, create, sell, provide, and support goods and services. Each step in the value chain presents a potential source of competitive advantage and a chance for businesses to streamline their processes and set themselves apart from rivals.

Porter’s value chain model can be used to pinpoint the actions that help create and deliver value to visitors in the hotel sector. Hotels can find areas where they can increase productivity, cut expenses, and improve the guest experience by evaluating the value chain. This can range from obtaining raw materials and controlling inventory to providing individualized service and preserving customer happiness. In the end, hotels may achieve their strategic objectives and acquire a competitive advantage in the market by optimizing their value chain.

Poeter’s framework aids in identifying the many tasks involved in producing value for clients in the hospitality sector is the hotel industry value chain analysis. Primary activities and support activities make up the value chain as described below.


  1. Inbound Logistics: including the receipt, storage, and distribution of supplies needed for hotel operations are referred to as inbound logistics. By streamlining the procurement process, technology enables the hotel to get goods and services at the lowest cost and with the quickest turnaround.

An example is a cloud-based procurement tool that a hotel may use to automate purchases, monitor inventory levels, and notify workers when it’s time to refill supplies.

  1. Operations: This refers to all of the tasks involved in maintaining a hotel operational, including housekeeping, front desk duties, food and beverage services, and maintenance. Technology contributes to value creation by streamlining operations, cutting costs, and raising service standards.

With an automated housekeeping management system, for instance, a hotel can speed up response times and enhance client satisfaction by enabling housekeepers to manage room cleaning requests from a mobile device.

  1. Outbound logistics: These are all the tasks involved in providing guests with the hotel’s goods and services. By allowing the hotel to deliver goods and services swiftly and effectively, cutting expenses, and raising customer happiness, technology aids in value creation.

A hotel might employ a digital concierge service that enables visitors to use their mobile device to buy room service, make reservations at restaurants, and arrange tours and other activities. This would cut down on wait times and enhance the guest experience.

  1. Marketing & Sales: All of the activities involved in promoting and selling the hotel’s goods and services fall under the category of marketing and sales. By allowing the hotel to reach a larger audience, customize marketing campaigns, and boost revenue, technology aids in value creation.

Using a customer relationship management (CRM) system, for instance, enables a hotel to gather and examine guest information, customise marketing messages, and assess the success of marketing efforts.

  1. Service: This refers to all actions taken to give visitors excellent customer service while they are visiting. By improving the guest experience, cutting down on wait times, and raising customer satisfaction, technology aids in value creation.

A hotel can employ a platform for guest engagement, for instance, that enables visitors to interact with staff via a mobile device in real-time, making personalized recommendations and quickly resolving any difficulties. This promotes client satisfaction and the guest experience.


  1. Procurement: This refers to any actions taken in connection with obtaining the items and services necessary for hotel operations. By automating the procurement process, cutting expenses, and increasing efficiency, technology contributes to value creation.

An example is a cloud-based procurement tool that a hotel may use to automate purchases, monitor inventory levels, and notify workers when it’s time to refill supplies.

  1. Technology development: This term refers to the actions involved in creating and maintaining the technological infrastructure needed to run a hotel. By increasing productivity, cutting costs, and improving the guest experience, technology aids in value creation.

A property management system (PMS) can be used by a hotel to integrate all of its operations, from front desk work to housekeeping, allowing staff to run the establishment more effectively and enhance the visitor experience.

  1. Human Resource Management: Management of human resources comprises all actions taken to oversee the staff at the hotel. Through increasing productivity, lowering expenses, and increasing employee happiness, technology aids in value creation.

The hiring process may be automated, employee performance can be tracked, and employee benefits can be managed using a cloud-based human resource management (HRM) system, for instance, which increases productivity and lowers administrative expenses.

  1. Firm Infrastructure: This refers to all operations involved in maintaining the hotel’s physical assets, such as its buildings, machinery, and facilities. By increasing productivity, cutting costs, and improving the guest experience, technology aids in value creation.

The deployment of a smart building management system by a hotel, for instance, can lower energy costs and enhance visitor satisfaction by monitoring and controlling energy use such as Heating, ventilation, and air conditioning (HVAC) operations, lighting, and security.

The author of this blog post is a technology fellow, an IT entrepreneur, and Educator in Kathmandu Nepal. With his keen interest in Data Science and Business Intelligence, he writes on random topics occasionally in the DataSagar blog.
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