Cool Cats

Matt Restrepo

SWOT analysis of Cats Hostel

Strengths: Cats hostile is not any average hostile. The major strength of the hostile is the experience they offer for their guests. Many hostels in large cities are on the more expensive side and cannot offer much entertainment to their guests. A bed, locker, and breakfast is what is included in a typical hostel. However at Cats Hostel, they are offered a club, newly renovated rooms, a movie watching room, and a range of activities (beer pong tournament, tapas tour, city tour pub crawl, themed parties, and karaoke) offered every night. Each of the previous activities are tailored to their target audience of younger people ranged from 18-25.

 

Another strength related with Cats Hostel is the location. The hostel is .4km from the center of the city, one of the closest hostels you will find to the city.  The 17th century mansion in which the hostel is located is in the heart of Madrid where many attractions are within walking distance. The close proximity also allows them to carry out their activities such as the pub crawl, tapas tour, and city tour with ease.

 

The location and activities make this hostel primed for hefty charge for a room. However, Cats was one of the cheapest hostels I came across while researching. Their rooms start at 12 euros per night while other that are more than 1km from center city start at 18 euros per night. Thia hostel becomes a steal for anyone who considers themselves a deal seeker.

The last strength I will focus on is the online presence of Cats Hostel. When I searched for hostels in Madrid, Cats was the third one that came up on hostelworld.com. It is also the cheapest hostel on the site up to that point. This gives them an advantage when tourists do not have a place to stay and see a cheap, up-to-date hostel early in their search. Also, their website itself is very well laid out. They have links to whatever you need, the color theme is constant throughout the site, and most importantly the site is easy to navigate. For reference, I gave the website to my Grandmother, who does not know how to use and iphone, and asked her if she was able to book a room. Within 3 minutes she was on the screen about to make the final payments for the room.

 

Weaknesses: Contrary to strengths, there are not many weaknesses Cats possesses. The major weakness comes with many strength: cost of the location. Madrid is an extremely expensive city with high property costs. The building in which Cats is located is a very elegant 17th century building located right in the heart of Madrid. There is not much Cats is able to do about to about the cost of their prime location. This fixed cost is something they have been able to overcome and hopefully can continue to do so.

 

Another silly weakness is the name “Cats”. When you look up cats on the internet (while not in Madrid) not a single thing about the hostel comes up; instead, articles about the animal pop up. Although there is always a possibility of change, Cats does not want to change their brand name when many people already recognize it.

 

Opportunities: The expansion Cats is about to pursue is unlike any hostel I have ever heard. They plan on expanding their market to cities all around Europe: “We’ve set ourselves the colossal target of opening FIVE new hostels per year in different major European cities, aiming to hit 20,000 new beds in the next five years!” (Cats hostel). To the naked eye, this seems like an ambitious goal that may be too rapid. However, Cats has great leaders and have planned their expansion methodically. Cats is not a brand that will simply take part in the hostel industry, rather they will take over, “We are determined to raise the bar and become leaders of the social hostel movement beyond our borders” (Cats Hostel).  Cats has been around for 16 years and does not plan to slow down. They realize their success of their hostel in Madrid and want to share that with everyone!

 

Another opportunity that could work is introducing an app. These days it seems as though every single business has an app. When Cats does decide to expand, an app where all their customers can have access to them would be an easy way of retaining customers. Rather than going through the internet on the telephone to access the Hostel website where the formatting is hard to navigate, one could just tap the app icon and have easy access to whatever they need.

 

Threats: I would not say a threat to Cats’ business comes from hotels. I don’t consider hotels and hostels in the same league. What I mean by league is that people only stay at hostels when money is tight and they are on a budget. Hotels are for families with money and want a luxurious stay wherever they may be. The other 90+ hostels in Madrid are a threat, however. Hostelbookings.com advertises 96 hostels on their sites. I am not saying any hostel is better than the other but with 96 options to choose from, there is a great possibility that Cats Hostel is skipped over.

 

A relatively new vacation housing available to travelers that can easily take business away from Cats is Airbnb. Airbnb is a new way of traveling. How it works is people put their houses up for a temporary rent (a week or a few days). The guest may use the house in whichever way they want, as long as no damages occur or illegal activities happen. Air B&Bs can be more appealing to travelers because the guest has more privacy and many times the locations are very convenient.

 

SWOT Matrix

S-O strategies- Use their young-and-hip model to their advantage in other large cities. Employ similar activities to the ones in Madrid such as tours, drinking games, and movies. Younger people love to be active. The imaginary app is also perfect for the younger population. Teens and young adults have a lot experience with technology which would play to Cats’ advantage.

 

W-O strategies- This section goes hand in hand, using the opportunity to overcome the weakness. When each expansion occurs, more and more people will be exposed to the brand name. With concern to the cost of occupancy, as long as Cats does not expand too fast and spread themselves too thin, they will flourish in their new environments.

 

S-T strategies- Airbnbs can offer more privacy than Cats hostel, however they cannot offer any of the extracurricular activities that Cats provides.  The online presence Cats has is great, if they are able to keep their reviews high and costs low, then there should not be a problem finding Cats hostel over other hostels.

 

W-T strategies- The most important thing is customer retention. Customer loyalty is the main way to combat weaknesses and threats. While the hostel business does not have the most consistent customers returning due to the need of travelers, if customers are loyal, they will tell their friends and family and Cats will then have their own little marketing network at their fingertips. Also if Cats is able to keep their variable costs to a minimum, they should be in great shape while in Madrid.