Hotel Business Model Analysis with the Business Model Canvas

Reality is stubborn, as the saying goes, and its stubbornness proves that it is becoming increasingly important to have the best possible information about our markets, segments and even individual businesses. In her book The Mesh, Lisa Gansky says that the raw material of companies, whatever their sector, is information; and while this is clearly true in many cases, in the hotel sector it is vital. And we are not only talking about information on our guests—although that matters too—but also about information on our own organisation, our structural and business model, and our ability to respond to new realities or generate alternative revenue streams. One of the most interesting tools to emerge for conducting this type of analysis is Alexander Osterwalder’s Business Model Canvas. The canvas is an entirely visual tool, heavily influenced by design thinking, which provides a complete view of our organisation and of the relationships generated between its different departments. It allows us to identify where our structural and business model strengths lie, as well as where we may find weaknesses that could undermine our market position. The tool centres on the value proposition we offer to the market. From there, it is divided into three areas. On the right, it shows how we bring that value proposition to market, which segments we target, what type of relationship we have with them, and which distribution, sales and communication channels we use. On the left, we define our internal actions for creating that value proposition, showing the key resources and activities required to deliver it and the partners that are essential to doing so—those without whom that value proposition would be impossible. Finally, the entire canvas rests on two fundamental components: revenue streams and cost structure. Once we have defined our business model—that is, once we have completed the different components—it is useful to observe how they relate to one another and the degree of influence they have in identifying our organisation’s strengths and weaknesses. Effective use of the Business Model Canvas will provide us with highly valuable information and help us improve our management capabilities, our value proposition and our ability to create alternative and/or complementary revenue streams for the business. And let us not forget the opportunity to analyse our competitors by studying the extent to which our offering is differentiated and can be perceived by our markets as distinct.

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Hotel Business Model Analysis

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