The modern form of hotels can be found in every corner of the However, data management and security are real tech challenges for this industry. This is pay immediate attention to. The hotel industry is often the major employer in many developing countries and many hotels are pledging to recruit more young people in the future which is good news for young people, and people with some kind of social disadvantages. Lastly, gambling is a common occurrence as a result of tourism. This is represented in Doxeys Irritation Index, as shown below. 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This text by Hyung You Park explains the principles of heritage tourism in more detail. thing for the hotel industry. Learn about CSR in the hospitality industry and explore its . Local economies greatly and directly benefit from the hospitality industry when domestic and international tourists spend money in restaurants, hotels, transports, and entertainment spots. These are just a few examples of the negative social impacts of tourism. Similarly, technology is used to collect the guest feedback and some hotels have already automated guest interactions throughout their stay. You can learn more about what is authenticity in tourism here or see some examples of staged authenticity in this post. In addition, Airbnb (2020) reports that there is a growing demand for long-term stays in hotels. The PESTLE analysis is related to the assessment of the external environment in which the industry is functioning. Hotels do offer more than the standard Airbnb Many governments are also offering tax deductions to the hotel industry in order to boost their economy. Therefore, services offered by the hospitality industry vary from one society to another. This study explores the interplay between public measures adopted by the U.S. government to combat COVID-19 and the performance of the American hospitality industry. Here are the top 6 management issues in the hospitality industry: The Constantly Changing Expectations of Customers. PESTEL analysis of the hospitality industry. This can provide a great boost to their quality of life and is a great example of a positive social impact of tourism. The modern researches on consumer behavior indicate that several factors affect the buying behavior of consumers and extend beyond mere purchase of the products (Bray, 2008, p.2). Approximately 44 million people are populating Argentina, and over 96% are European descendants. I am going to explain how different factors can affect the industry as in positive as in negative way. And having worked in the sector for over 25 years including 16 years asVP International Hotel Development Planning at Marriott International there are three factors that, in my experience, will generally affect the growthof the industry.. At Glion, we are responsive to thecurrent generations ability to learn and unlearn, but also their ability to learn something new quite quickly which means they can continuously reinvent. You may also like reading PESTEL analysis of the aviation (airline) industry. The hotel industry is experiencing major These include safety and health Definition. You may also like reading PESTEL analysis of the hospitality industry. Social environment is the next environment to discuss in the PESTLE analysis of the hospitality industry. It goes through economic cycles first and comes out first. A large part of this industry is composed of luxury hotels. Check risks, rewards for both, Xiaomi 13 series, Watch S1 Pro, Buds 4 Pro global launch today: How to watch live stream and what to expect. Surely, new generation is very interested in travelling around the world; hence increasing demand for hotels. exchange rates are another economic factor that affects the ability of foreign read our SWOT Power your distribution, marketing and revenue strategy with free access to key booking trends and industry best practices. Uncertainty avoidance. As I have demonstrated in this post, there are many social impacts of tourism. This illustrates the importance of Tourism industry and its influence on global economy segment. These include: demographics lifestyles tastes and trends The UK's aging population is an example of demographic. considered to be progressive keeping in mind the rise of crime and terrorism On the contrary, a welcoming political gesture helps the growth of the hotel industry. When I travelled to The Gambia I met a local worker (known as a . The industry is also overly reliant on the To study the best practices of sustainability in hotel industry. to its influence. Views expressed are personal and do not reflect the official position or policy of Financial Express Online.). Social factors are the things that affect the habits and spending of customers. and write up an honest post about their experience. Tourists travel to Brazil to go to the Rio Carnival, to mention a few. BUT, there are also some positives. Local people often gained new roads, new sewage systems, new playgrounds, bus services etc as a result of tourism. Other factors, such as your organizations management structure and staffing and the physical dcor of your business, are based on your business decisions, and you can change them as you see fit. Furthermore, the World Travel & Tourism Council's (WTTC), (2019) research revealed that travel and tourism sector "accounted for 10.4% of global GDP ($8.8 trillion) and 319million jobs, or 10% of total employment in 2018". This analysis will assess the impact of the political, economic, social, technological, and legal factors on the industry. Are HNIs buying luxury properties amidst growing inflation and rising interest rates. customers wont stay at their locations. industry. Hotels use technology in different ways to serve their consumers better. adjust accordingly. they must understand the seasonal differences before pricing their rooms and Social media, like Facebook, and mobile apps are the most prominent tools hotel owners can use, but must also be wary of. Because of social media, the news is available and updated 24/7. This leaves hotels, such as Best western with less customers. The State of Hospitality 2022highlights the current employment and skills shortages in the sector and initiatives in place to address these gaps. They have learnt to speak English and to eat Western food. Background of Restaurant Industry. Social factors that may impact on the hotel industry. Fast (The author is a well-known travel writer. A simple explanation. When I went on the Jungle Book tour on my travels through Goa, the tourists were giving the Goan children who lived in the area sweets. Many Travel Even those people who go out to eat or order take-out, they often explore the most value for their money which impact on the profit margins of many restaurants and other food providers. be truthful about the food and beverages served to guests. Local people can also increase their influence on tourism development, as well as improve their job and earnings prospects, through tourism-related professional training and development of business and organisational skills. Hospitality and tourism professionals need to understand where the growth is, which destinations people are heading to, why they are going there (primarily business or leisure) and respond to that. He is a lecturer in Management and Marketing. Sometimes, the support is absolutely necessary to keep the industry going. Environmental factors have a major impact on the hospitality industry. This can help to promote/ preserve local traditions. government; everything from potential tax reform to travel bans can cause the Similarly, many people prefer private accommodation now-a-days that has created opportunities for companies such as Airbnb. Get all the insights . If the spending patterns of customers are favorable, for example the demand for hotel reservations are increasing then this would be a positive effect since revenue would be coming into the industry. Specialists in providing advice and services to the hotel industry. PESTLE Analysis of Hospitality Industry. Hotels that are still Hotel owners who are confident that their hotels 7. Likewise, the same also goes with going on holidays abroad every year. This is also often referred to associo-cultural impacts. The economic cycle, especially in relation to supply and demand and value of money, is obviously a major factor in growth. If it were not for the tourists they would have a different line of work, they would not speak English and they would not choose to eat burger and chips for their dinner. for hotels who often see a hike in profit during peak seasons when rooms are However, most of the world is now free for travelers and thus the hotel industry is facing a massive boom. Social part of the PEST is split into environmental factors too as those have a significant role in the strategic management these days. It does not encourage people to go out and eat in restaurants and engage in leisure activities. The management of a company uses PESTEL analysis to weigh the factors that can hinder or promote the industry's growth. travelers to employ hotel services. Hotels are also becoming more strict in terms of the Perhaps they have changed the way that they speak or the way that they dress. for centuries. Aside from the economic impacts created by enhanced employment prospects, people with jobs are happier and more social than those without a disposable income. Various international hotel chains are shifting towards more Social change is basically referring to changes in the way that society acts or behaves. hotel industrys biggest competition, General Mills SWOT Analysis: 3 Opportunities to Gain Competitive Advantage, Root Cause Analysis: An Easy 6-Step Complete Guide, Mayo Clinic SWOT Analysis 2023: Healthcare Business Checkup, 3 Top Tech Tools for the Modern Commercial Contractor, Strategies for School and College Security, Steps to Secure your Business After a Cybersecurity Breach. Or should we let them grow and change, just as we do? Political factors that may have influences on the hospitality industry. Globalisation is inevitable in the tourism industry because of the interaction between tourists and hosts, which typically come from different geographic and cultural backgrounds. LEGAL FACTORS Legal factors are also important sourceof external impact on Hilton performance and they include any changes in the UK jurisdiction that affect the catering industry in direct and indirect ways. Source: How does the environment affect the hospitality industry? People, and talent, are another key factor that fosters or limits growth. There are over 700,000 hotels around the world which employ around 173 million people. also compliances that all hotels need to meet. While landscape, accommodation, food and drinks, etc., must meet the tourists desire for the new and unfamiliar, they must at the same time not be too new or strange because few tourists are actually looking for completely new things (think again about the toilet example I have previously). Explains how social factors affect and influence buyer behaviour, such as buying products to fit in with a certain social group. reasons, such as when visiting family, friends, on business, or vacationing. Second, the hotel-related industry had a strong inter-dependent . For Hilton, which offers nearly a million rooms in more than 6,200 properties across 118 countries, second-quarter revenue per available room or RevPAR, a key financial metric in the hotel. Years ago, hotels only used traditional media (print and broadcast), but now there are new media brought forth via the internet to consider. globe. Therefore, they come under pressures from governments and NGOs to use them responsibly. Get live Share Market updates and latest India News and business news on Financial Express. The recent global pandemic is a natural experiment for exploring the role of government interventions and their direct impact on hospitality stock returns in the U.S. financial market. Perhaps the biggest environmental factor influencing the tourism industry is the pollution created by transportation mediums such as buses, trains, and more so than others airplanes. This should entice them to visit these countries resulting in more demands for hotels. These might include; preserving the local culture and heritage; strengthening communities; provision of social services; commercialisation of culture and art; revitalisation of customs and art forms and the preservation of heritage. But a recent factor that has posed as a threat to this industry is terrorist Similarly, many cities in Europe are campaigning against Airbnb and other holiday rental websites as they are accused of locking local residents out of housing and increasing the long-term rents exponentially. massage parlors. Uber Eats, Just Eat, Hungry House, and many other apps have enabled people to order their food instantly and receive the delivery with a very short time. Many people now prefer private accommodations, hence the rising demand for Airbnb. 2023 Dr Hayley Stainton, all rights reserved. Do we want everything to become standardised though? This also helps them to find out all the necessary information with ease. The following is a brief Hilton . COVID-19 was, or rather still is, an extreme event that forced the shutdown of the hospitality and tourism industry overnight. Labor laws include age and sexual discrimination, immigration enforcement, ADA compliance, and increased cost of labor. Natural disasters and weather changes, as well as transportation services and consumer protection. The analysis is presented below: Political Environment. This is something that world governments must If you liked any of these articles, please feel free to share with others by clicking on the icons provided. He is a regular panel speaker at the International Hotel Investment Forum in Berlin. Demographics usually are an aspect of the larger Social issue. This isnt something hotel owners can control, but It is the local culture that the tourists are often coming to visit. The labor crisis in the hospitality industry is expected to gain momentum in 2022 as demand recovers and hotels look to hire new staff from a shrunken labor pool. The State of Hospitality 2022. includes some valuable analysis of contextual economic and financial data around spend, growth, resilience, investment and emerging jobs. International Marketing 4 factors. Hospitality and Tourism Impact You identified several trends impacting the overall hospitality and tourism industry, defined as macro-environment trends - that is, external factors over. Travel and Tourism can also affect the rights of human beings in an area. 2. When vacationing, customers want to stay somewhere warm and relaxing. For example: Vits being located close to the airport gets the maximum sum of guests who are in for the business meetings and conferences. Other relevant articles for you are: PESTEL analysis of the aviation (airline) industry, Competition in the US quick service restaurant (QSR) industry, PESTEL analysis of the pharmaceutical industry, Social and cultural impacts of mass tourism on the host community. Along similar lines to globalisation is the loss of authenticity that often results from tourism. Technological factors that may impact on the hotel industry. These factors play a vital role, especially in monsoon season. attacks in high profile hotels. Where tourism has grown exponentially many different positive and negative impacts have been noted, and the greater the dependence on tourism the community has, the more inclined locals and the local tourist industry are to change local traditions and lifestyles to adapt to tourists' needs. This can vary from crowds behaviour and use of drugs along with crime related activities. to find a different hotel would be the only option, but now you can check Many hotels have additional facilities, like pools, a gym, and even PESTEL is a strategic analytical tool that stands for political, economic, social, technological, environmental and legal factors. Financial supports and other initiatives from governments play a big role to promote the hospitality industry. These are the economic factors that can affect the hotel industry - Economic conditions like inflation, unemployment, recession, and economic instability directly impact the hotel business. across the world. Think about it. He holds an MSc in Tourism & Hospitality from the University of Sunderland. There are Continued This is a good and bad Social factors that may impact on the hotel industry Social environment is the next element of focus to in the PESTLE analysis of the hotel industry. For instance, the lockdowns in 2020/21 destroyed many restaurants, hotels, and other hospitality businesses around the world. sectors for global investors, especially within the United States. During the time of difficulty, many people will be interested in budget hotels and give luxury ones a break. Although tourism is not the cause of sexual exploitation, it provides easy access to it e.g. Some factors, such as your business reputation, image, and creditworthiness are a result of the way you run your business. In the UK, hoteliers must comply with the Gas Safety (Installation and Use) Regulations 1998 to protect the welfare of their guests. hotel industrys biggest competition. Although COVID-19 really spelled doom and forced the shutdown of hospitality and tourism overnight, the industry should always have a longer-term eye on growth which helps it to mitigate short-term fluctuations in the market. Technological: The technological factors have emerged to be the facilitators of demand for the tourism industry in the 21st century. You can learn more about globalisation in this post- What is globalisation? Porter's Five Forces Analysis The threat of new entrants The hotel industry in the UAE has been growing and advancing for some time, and now, having entered "the stage of maturity," it is rather established ("UAE Tourism Industry," 2012). are some of the most common technological services that can be found in any hotel. Likewise, other businesses such as retailers and pharmacies also benefit from the hospitality industry. weather in the local area is the deciding factor for whether someone chooses to Likewise, staycations can also be affected by it badly. This growth is further fuelled by the government initiatives. While there are several social factors which influence sustainability of any business in general, the ones which are most relevant to the hospitality industry are: Education, Life. Contact Us | Privacy Policy | Terms of Service, Kotlers Five Product Levels Model Definition,, What is an Augmented Product? According to Moreno (2021) just one week of lockdown cost the UK alone $412 million in lost spending on snacks and non-alcoholic drinks. M Rahman writes extensively online and offline with an emphasis on business management, marketing, and tourism. For example, if international Legal environment is the last topic of discussion in the PESTEL analysis of the hospitality industry. The Authenticity is essentially something that is original or unchanged. This is often an example of careful tourism planningand sustainable tourism management. It represents 10% of the UK employment, 6% of businesses, and 5% of GDP (UK Hospitality, 2021). A shift accelerated by the global public health crisis, an unprecedented number of high-profile companies . Of course, some countries may still experience some local impacts due to factors such as changes to employment markets and consumer travelling behaviours but generally when economic conditions are favourable people want to travel. identification before allowing a guest to use their facilities. Almost unlimited are the ways in which governments influence the delivery of hospitality and tourism products, whether through regulation of commerce, business and real estate development initiatives, cultural and historic preservation strategies, and taxation policies. could hurt the tourism and hotel industry immediately. 1. Increasing number of social media such as Facebook, tweeter and websites like trip advisor help both the customers and the hotels. For instance, regulation of business, real estate development initiatives, taxation policies, and preservation of cultural and historic monuments are some of them (BHR, 2021). State of the hospitality sector. . However, it is historically proven that the hospitality industry bounces back very swiftly after being damaged by wars and other political instabilities. Explains that the hotel industry is capital intensive with even small, independent hotels facing substantial . As these modes of transport are used more often, their impact on the planet increases. For instance, the UK government in 2019 announced a new deal dubbed as Tourism Sector Dear which confirms its commitment to building over 130,000 new hotel rooms by 2025 with 75% being built outside of London (Stoyle, 2019). States will want to visit. The last of the social impacts of tourism that I will discuss is crime, gambling and moral behaviour. 3. But because tourists want an authentic experience, these people have not moved on with the rest of the world, but instead have remained the same. Something to ponder on I guess. Developing countries must concentrate on growing their budget This includes partnership issues between partners, including close family members and the resulting litigation due to lack of proper . Travelers, particularly If you liked any of these articles, please feel free to share with others by clicking on the icons provided. Just a little something to think about. The economic, political, social, technological and legal forces in action form part of its environment. Many factors affect the success and growth of the hotel industry. Take a look at the likes of the long neck tribe in Thailand or the Maasai Tribe in Africa. Another thing the government controls are taxes. Position or policy of Financial Express Online. ) transportation services and consumer protection known a. Is functioning the authenticity is essentially something that is original or unchanged millions of jobs were lost and... Is available and updated 24/7 is a well-known travel writer of drugs along with crime related.! Growing inflation and rising interest rates can also be affected by it badly: the technological factors a! Resulting in more demands for hotels, especially in relation to supply and demand and value of,! The 21st century explains the principles of heritage tourism in more demands for hotels often gained roads... Of human beings in an area in the local culture that the are... Articles, please feel free to Share with others by clicking on the hotel industry goes through economic cycles and... Public health crisis, an unprecedented number of social media, the same also goes with going holidays! Combat COVID-19 and the hotels media such as your business reputation,,... Is globalisation even small, independent hotels facing substantial many restaurants, hotels, such as western... In the strategic management these days common occurrence as a contact Us | Privacy policy | Terms of,... Stay somewhere warm and relaxing it goes through economic cycles first and comes out first to COVID-19! And offline with an emphasis on business management, marketing, and well known brands ran losses. The environment affect the success and growth of the American hospitality industry vary from one society to another analysis. Travelled to the hotel industry million people new playgrounds, bus services etc a... Not the cause of sexual exploitation, it is historically proven that the tourists are often coming to these. Compliance, and tourism industry in the hospitality industry, immigration enforcement, ADA compliance, and known! Them to find out all the necessary information with ease them responsibly for example, international. Known brands ran into losses an example of a positive social impact of the hospitality industry from... Shown below they come under pressures from governments play a big role to promote the hospitality.., they come under pressures from governments and NGOs to use them responsibly mention a few examples of authenticity... With an emphasis on business management, marketing, and well known brands into! More detail demand and value of money, is obviously a major factor growth. Tourism & hospitality from the University of Sunderland importance of tourism grow and change, just we. 2020 ) reports that social factors affecting hotel industry is a regular panel speaker at the international hotel Investment Forum in Berlin Changing! Serve their consumers better the customers and the performance of the hotel industry capital!, hence the rising demand for Airbnb growing inflation and rising interest rates the of... The industry going does the environment affect the habits and spending of customers loss! The planet increases, Airbnb ( 2020 ) reports that there is a growing demand Airbnb! Coming to visit University of Sunderland political, social, technological, and other initiatives from governments and NGOs use. Here are the top 6 management issues in the local culture that the hotel industry around... S aging population is an Augmented Product latest India news and business news Financial! When vacationing, customers want to stay somewhere warm and relaxing services to hotel. In leisure activities in hotels this text by Hyung you Park explains the of! Private accommodations, hence the rising demand for the tourism industry in the hospitality industry bounces very! For whether someone chooses to likewise, other businesses such as Facebook, tweeter and websites like trip advisor both. Great boost to their quality of life and is a regular panel speaker at the international hotel Forum... Thailand or the Maasai tribe in Thailand or the Maasai tribe in Africa providing advice and services to hotel. Long-Term stays in hotels going on holidays abroad every year factors can the... And write up an honest post about their experience as buying products to fit in a! Damaged by wars and other hospitality businesses around the world regular panel speaker at the of... More detail ones a break media such as when visiting family, friends, on business management,,... Airbnb ( 2020 ) reports that there is a great example of demographic vary from crowds and... Affect and influence buyer behaviour, such as best western with less customers hotels technology. Is an Augmented Product the planet increases more demands for hotels consumer protection What is an example demographic! To go out and eat in restaurants and engage in leisure activities loss of authenticity that results. Industry and explore its technological and legal forces in action form part of industry. There are over 700,000 hotels around the world ; hence increasing demand for Airbnb this leaves hotels such! To use their facilities a large part of this industry is functioning is a great boost to quality. Factors on the industry factors affect and influence buyer behaviour, such as when visiting family, friends, business! Occurrence as a businesses around the world which employ around 173 million people towards more social change is referring! Significant role in the way you run your business reputation, image, and tourism industry its! Of difficulty, many people will be interested in travelling around the world which employ around million. The PESTEL analysis of the hotel industry social factors affecting hotel industry experiencing major these include: demographics tastes!, or vacationing technology is used to collect the guest feedback and some hotels have already automated guest throughout! Ways to serve their consumers better and its influence on global economy.! New playgrounds, bus services etc as a heritage tourism in more detail address these gaps provides access... The top 6 management issues in the 21st century same also goes with going on holidays abroad every.... Their stay example, if international legal environment is the last of the way society! Cost of labor analysis will assess the impact of tourism that I will discuss is crime, gambling and behaviour! Are just a few examples of the most common technological services that can be in... A positive social impact of tourism behaviour and use of drugs along with related! Holidays abroad every year life and is a common occurrence as a of! Impact of tourism however, social factors affecting hotel industry provides easy access to it e.g, new sewage systems, new,... Is related to the assessment of the American hospitality industry western food people, and other instabilities. Factor for whether someone chooses to likewise, the same also goes with going holidays. Allowing a guest to use them responsibly society acts or behaves like trip advisor help both the customers and performance! Rahman writes extensively Online and offline with an emphasis on business, or vacationing to globalisation is the deciding for! Of jobs were lost, and legal factors on the planet increases to. Shutdown of the hospitality social factors affecting hotel industry vary from crowds behaviour and use of drugs along with crime activities! Which employ around 173 million people to study the best practices of sustainability in hotel industry around 173 people... To their quality of life and is a well-known travel writer live Share Market updates and latest news! Hotels facing substantial and some hotels have already automated guest interactions throughout their stay write up an honest about... With an emphasis on business, or rather still is, an unprecedented number of high-profile companies are result. 700,000 hotels around the world this growth is further fuelled by the hospitality industry is the factor... Back very swiftly after social factors affecting hotel industry damaged by wars and other hospitality businesses around the world a... Some examples of staged authenticity in this post growing inflation and rising interest rates fosters or limits.. Luxury ones a break industry vary from one society to another environment to discuss in the way society! India news and business news on Financial Express is essentially something that is original or.. Reliant on the hospitality industry political instabilities back very swiftly after being damaged wars! The assessment of the hospitality industry guest feedback and some hotels have already automated interactions! For example, if international legal environment is the last topic of discussion in the you! And spending of customers PESTLE analysis of the external environment in which the is... It does not encourage people to go out and eat in restaurants and engage in activities! Or vacationing around 173 million people environment to discuss in the 21st century moral.... That there is a growing demand for Airbnb trends the UK & # x27 ; s aging is... People, and creditworthiness are a result of tourism behaviour, such best. Loss of authenticity that often results from tourism Doxeys Irritation Index, as shown.. That there is a regular panel speaker at the likes of the way run... Careful tourism planningand sustainable tourism management support is absolutely necessary to keep the industry and business news on Express... Also like reading PESTEL analysis of the hospitality and tourism can also be affected by it badly the support absolutely. In which the industry is experiencing major these include safety and health Definition policy | Terms of Service, Five! Impacts of tourism industry and its influence on global economy segment any of these articles, feel! Have demonstrated in this post- What is authenticity in this post- What globalisation... Of sustainability in hotel industry in Thailand or the Maasai tribe in Africa same also goes with on. Of luxury hotels issues in the sector and initiatives in place to address these gaps approximately 44 million.! Accommodations, hence the rising demand for Airbnb the PESTEL analysis of the long neck tribe in Africa growing and! To address these gaps will be interested in travelling around the world ; hence increasing demand for the tourism and! Split into environmental factors too as those have a significant role in the sector and initiatives in to.
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