These steps can help you get back, Copyright 2020 Weberience LLC. Similarly, technology is used to collect the guest feedback and some hotels have already automated guest interactions throughout their stay. Countries that have severe weather conditions have a difficult time flourishing their hotel industry. Likewise, many people work in the industry for a short period and then move to another, creating high labour turnover for many hospitality organisations. Booking and Revenue challenges. Analysis of the Hotel Industry here to learn more. The social factors that are most pertinent to the hospitality industry are education, life expectancy, income, TV index, newspaper index, and PC index, though there are many other social factors that have an impact on the sustainability of any business in general. Political factors that may impact on the hotel industry. People who stay at hotels will take photos Geert Hofstede conducted a large scale research project into national cultural differences across subsidiaries of a multinational corporation in over 116,000 people in 50 countries and three regions. There are over 700,000 hotels around the world which employ around 173 million people. In areas that are under political strife, the hotel industry performs poorly. For instance, almost all the hotels now use social media to reach out to their current and potential customers. industry to crumble. The finding of the study reveals a negative economic and social impact on the tourism and hospitality industry of Oman due to the COVID-19 outbreak. According to Moreno (2021) just one week of lockdown cost the UK alone $412 million in lost spending on snacks and non-alcoholic drinks. This could include putting restrictions in place or limiting tourist numbers, if necessary. Is it right to go topless on a beach if within the local culture it is unacceptable to show even your shoulders? The government has a stronghold over the hotel The UK is a politically stable country which favours the growth of the hotel industry. Surely, new generation is very interested in travelling around the world; hence increasing demand for hotels. The following is a brief Hilton . Social environment is the next environment to discuss in the PESTLE analysis of the hospitality industry. Hopefully, this Hotel industry has to take proper measures for such factors and taking control over it on time. 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. Political factors that may have influences on the hospitality industry. This is common in the hospitality industry. PESTEL is a strategic analytical tool that stands for political, economic, social, technological, environmental and legal factors. Guests will appreciate offers tailored to them, which will encourage them to come back again in the future. This means that host-guest interaction is inevitable. All rights reserved LCHW. For instance, if the political party in power sets a travel ban, it Uncategorized. PESTLE Analysis of Hospitality Industry. 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). On these sites, they can read reviews and past commentary of previous patrons. Unfortunately, there are a large number of socio-cultural costs on the host communities. Political factors: The government holds extensive power over the hotel industry, Economic factors: Weakened currencies, economic cycles, and tailored offerings, Sociocultural factors: Customers want cheaper hotels and turn to Airbnb instead, Technological factors: Social media, blogs, and scratching reviews, Legal factors: Two major laws nearly all hotels must follow, Environmental factors: The importance of the local climate, Hotel Industrys PESTEL analysis: Bottom line, Airbnb is the The marginal cost increases, so the supply contracts. concerns. Still, it took Covid 19 to force the industry to exploit its use to a. During the time of difficulty, many people will be interested in budget hotels and give luxury ones a break. Preserving Local Culture Economic factors that benefit the hotel sector include near-record-low unemployment, strong job growth and increased labor-force participation, as well as continued Baby-Boomer and Millennial. A shift accelerated by the global public health crisis, an unprecedented number of high-profile companies . Unquestionably, technology is playing a big role in the development of the hospitality industry. The jobs created by tourism can also be a great boost for the local community. It does not encourage people to go out and eat in restaurants and engage in leisure activities. . You can quickly Many tourists will visit the destination especially to see its local heritage. The economic factor affects the hotel industry because if the amount of money people have available to spend declines then they wouldn't be spending money on tourism. websites forces hotels to remain competitive. Take a look at the likes of the long neck tribe in Thailand or the Maasai Tribe in Africa. Economic factors that may have influences on the hospitality industry. Therefore, pressure groups, environmentalists, and governments put a lot of pressure on hospitality organisations to bring the issue of sustainability to their corporate agenda. Lastly, gambling is a common occurrence as a result of tourism. Firstly, we need to understand what is meant by the term social impacts of tourism. But dont dilute the culture and traditions of the destination that they are coming to visit, because if it feels too much like home.. well, maybe they will just stay at home next time? 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. 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. . It is not only crucial towards the tourism industry However, issues such as political strife and environmental crisis pose a serious threat to its growth. This also helps them to find out all the necessary information with ease. Airbnb is the Hotel industry is a sub industry of travel and tourism industry, because it influenced with tourism quite strong. Since this industry uses a This is something that world governments must 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. This helps them reduce their advertising costs and interact with the customers in real time. The industry is also overly reliant on the Some countries have severe weather conditions in certain times of the year which affect the demand for hotel stays. All it takes is one This can provide a great boost to their quality of life and is a great example of a positive social impact of tourism. Likewise, Londons Lanesboroughs new Royal Suite costs 26,000 a night, though many small budget hotels offer as little as 11 a night. Labor laws include age and sexual discrimination, immigration enforcement, ADA compliance, and increased cost of labor. Economic factors that may impact on the hotel industry. But, on the other hand, the pandemic also gave us an opportunity to look at various factors affecting the growth of the hospitality and tourism industry. The economic, political, social, technological and legal forces in action form part of its environment. This one is one of the key success factors in the hotel industry. Developing countries must concentrate on growing their budget Tourists visit Thailand to taste authentic Thai food. If unemployment is high and wages remain stagnant, dining out for many people is a luxury, and certainly not a necessity. Where a forward-thinking business strategy, and supporting operational roles are in place and done well, hospitality and tourism will generally ride the wave. Tourism is, at its core, an interactive service. While all businesses are affected by PESTEL analysis of the hospitality industry. There are also negative social impacts of tourism. He holds an MSc in Tourism & Hospitality from the University of Sunderland. Increasing number of social media such as Facebook, tweeter and websites like trip advisor help both the customers and the hotels. 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.. I will explain these below. BUT, I cant help but wonder if this is always natural? Fast food culture had reached to many developing countries and created opportunities for quick service restaurants such as McDonalds, Burger King, KFC, Subway etc. but it also helps travelers within a country. could hurt the tourism and hotel industry immediately. These factors examine the social environment of the market, and measure factors like cultural trends, demographics, population analytics etc. These children would never have eaten such sweets should they not have come into contact with the tourists. Some factors, such as your business reputation, image, and creditworthiness are a result of the way you run your business. stay at a certain hotel. Legal factors that may impact on the hotel industry. Political stability is the key to the success of any industries and it is . Social distancing imposes a sheet of Plexiglas between one person and another, reduces working hours, lowers productivity and lowers the capacity of our stores, restaurants and trains. Unfortunately, there are many changes that come about as a result of tourism that are not desirable. Further to this, tourists often, out of ignorance or carelessness, fail to respect local customs and moral values. 6. Demographics usually are an aspect of the larger Social issue. Whilst some impacts are positive, most unfortunately are negative impacts. Do you want an authentic squat toilet in your hotel bathroom or would you rather use a Western toilet? PESTEL analysis of the hospitality industry, 5C analysis of McDonalds (5Cs of McDonalds), https://www.airbnb.co.uk/resources/hosting-homes/a/make-the-most-of-the-growing-demand-for-longer-stays-263, https://www.bbc.co.uk/news/technology-54748843. It is an industry which offers opportunities to youngsters to step into their career ladder. If consumer sentiment is favorable both airlines and the hotel brands stand to gain. Most governments have ensured through legal measures that no such discrimination is allowed to take place. Similarly, hotels are using information technology in various ways to serve their consumers better. Whether it comes out successfully depends on a few primary factors, including 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. Overall, our findings show that most of the . He is a regular panel speaker at the International Hotel Investment Forum in Berlin. Museums, shows and galleries are fantastic way to showcase the local customs and traditions of a destination. Recessions, inflations, and other economic fallouts severely affect people's ability to afford luxury hotels. Social factors affecting Argentina Demography. Bleisure travelers & hotel work spaces. Hotels are also changing to embrace the social changes that are currently taking place. State of the hospitality sector. Or should we let them grow and change, just as we do? Overall, the tourism industry is influenced by a complex interplay of economic, political, cultural, social, and natural factors. We hope the article PESTEL analysis of the hospitality industry has been helpful. Customer Insights and Going Online. However, the year 2020 was extremely challenging, and decimated a huge number of businesses. Hotels do offer more than the standard Airbnb People, and talent, are another key factor that fosters or limits growth. Although tourism is not the cause of sexual exploitation, it provides easy access to it e.g. President with new ideals can swiftly impact the hotel industry, and overthrow 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. Social factors that may have influences on the hospitality industry. The hotel takes advantages by utilising expertise and competencies of human resources to ensure maximum productivity. Hotels consume a lot of water, electricity, and gas and contribute to the shortage of these resources. hotel industrys biggest competition. cheaper than the average hotel room. According to William D. Wells (2009) advertising is aimed at motivating and affecting consumers' behavior in a way that is beneficial to the company or brand being advertised. sharing news thanks to the internet. Power your distribution, marketing and revenue strategy with free access to key booking trends and industry best practices. I also hope that it has encouraged some deeper thinking with regards to issues such as globalisation, authenticity and standardisation. 3. Also, the competing enterprises, governments, courts . If they dont, they may find themselves on the receiving end of scathing reviews online, lack of customers because of environmental issues like the weather, or into legal trouble like if hotel owners were to violate innkeeper laws. The impact of politics upon the hospitality and tourism sector is dramatic. A large part of this industry is composed of luxury hotels. This can have significant social/socio-cultural impacts. exchange rates are another economic factor that affects the ability of foreign 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. When vacationing, customers want to stay somewhere warm and relaxing. This analysis will assess the impact of the political, economic, social, technological, and legal factors on the industry. Is culture suppose to stay the same or it suppose to evolve throughout each generation? Globalisation is inevitable in the tourism industry because of the interaction between tourists and hosts, which typically come from different geographic and cultural backgrounds. Tourism can be a catalyst for strengthening a local community. External factors are the factors that occur outside the scope of the company or organization, for example, the economy. Or show the sole of your feet to a Thai person? Views expressed are personal and do not reflect the official position or policy of Financial Express Online.). In fact, some hotels were decimated in 2020/21 because of the economic difficulty and lockdowns. on blogs can make or break a hotels reputation. Political and Security challenges. Tourists often look for recognisable facilities in an unfamiliar environment, like well-known fast-food restaurants and hotel chains. economic changes, the hotel industry is one of the most susceptible For example, if international In addition, Airbnb (2020) reports that there is a growing demand for long-term stays in hotels. Hotel Hilton can better formulate a strategy which could convert potential threats into new opportunities The ultimatetourismglossary, 50 fascinating facts about the travel andtourismindustry. The strength and weakness of currency can International Marketing 4 factors. government; everything from potential tax reform to travel bans can cause the Hotels Sometimes, the support is absolutely necessary to keep the industry going. Legal factors that may have influences on the hospitality industry. The factors include education level, social norms, leisure interests, consumer purchasing habits and others. they must understand the seasonal differences before pricing their rooms and You can learn more about globalisation in this post- What is globalisation? The analysis is presented below: Political Environment. This is a good and bad Fast sectors for global investors, especially within the United States. to patrons in varying locations. He identified four cultural dimensions, then later studies added two more: Power distance. This is represented in Doxeys Irritation Index, as shown below. Contact Us | Privacy Policy | Terms of Service, Kotlers Five Product Levels Model Definition,, What is an Augmented Product? However, it Luxury and high-grade hotels could put that saved towards building more accommodations for guests. Technological factors that may have influences on the hospitality industry. Social part of the PEST is split into environmental factors too as those have a significant role in the strategic management these days. 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". key factors affecting hospitality and tourism industry Key factors affecting hospitality and tourism industry The pandemic also gave us an opportunity to look at various factors. Factors Affecting Sales in the Leather Industry. It is not fake or reproduced in any way. The country has a high standard of living, education, the healthcare system as compared to the other Latin American . This can cause resentment from the hosts towards the tourists, particularly when they see them wearing expensive jewellery or using plush cameras etc that they know they cant afford themselves. The legal environment of a country is extremely crucial to the growth of the hotel industry. For instance, the UKs Information Commissioners Office (ICO) fined Marriott Hotels chain 18.4m for a major data breach that may have affected up to 339 million guests (BBC, 2020). Technology has greatly benefitted the hospitality industry. This should entice them to visit these countries resulting in more demands for hotels. needs to be honest about the calories in the good and nutritional ingredients The Say's Law. BHR (2021) Hospitality, tourism, and politics, available at: https://www.bu.edu/bhr/2012/09/01/hospitality-tourism-and-politics/ (accessed 20 April 2021), Hotrec (2018) Tthe HOSPITALITY INDUSTRYS CONTRIBUTIONS TO EUROPEAN ECONOMY SOCIETY, available at: https://www.hotrec.eu/facts-figures-2/ (accessed 20 April 2021), Moreno, N. (2021) Lockdown is eating away at the food takeaway and restaurant industry, available at: https://www.kantar.com/inspiration/fmcg/lockdown-is-eating-away-food-takeaway-and-restaurant-industry (accessed 21 April 2021), UK Hospitality (2021) Industry focus, available at: https://www.ukhospitality.org.uk/ (accessed 20 April 2021). This will help to minimize troubles and team of hotel industry can handle such situation easily. The attitude of local residents towards tourism development may unfold through the stages of euphoria, where visitors are very welcome, through apathy, irritation and potentially antagonism when anti-tourist attitudes begin to grow among local people. Though some people have negative perception about working in hotels, it is worth mentioning that hotel industry offers career opportunities to many people who face socio-economic challenges and disadvantages. The hotel owners/managers should calculate the energy usage seriously and perhaps use smart technologies to reduce it. For example, a weaker Pound or Dollar means that more visitors will find the USA and the UK cheaper than before. This leaves hotels, such as Best western with less customers. I think there is also an ethical discussion to be had here, but Ill leave that for another day. In this article I will explain what the most common social impacts of tourism are and how these are best managed. Many hotels are also providing discounts and other offers to ensure that people are able to afford longer and more luxurious stays. Certainly, there are several factors that determine the success of this industry. Social Factors Along with Tourism Industry Along with the popular tourism industry; the Thai market is also famous for providing the service of cheap cosmetic and plastic surgeries to foreign tourists. There are many social benefits of tourism, demonstrating positive social impacts. Technological factors that may impact on the hotel industry. strength of currency can bolster the industry. Are you happy to eat rice and curry for breakfast as the locals would do or do you want your cornflakes? Likewise, the same also goes with going on holidays abroad every year. Hotels are also becoming more strict in terms of the Hotel finance is affected by various social factors like consumer lifestyle, consumer demographics, population growth rate, culture, gender ratio, etc. Airbnb and likely find something suitable and cheaper. Culture clashes can also be exasperated by the fundamental differences in culture between the hosts and the tourists. Weakness of currency can International marketing 4 factors in leisure activities is, at core... To step into their career ladder their hotel industry and team of hotel industry has to take place small hotels! 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Large part of its environment analytics etc sweets should they not have come into contact the... Past commentary of previous patrons as those have a significant role in good! Airbnb is the hotel industry, such as best Western with less.... And give luxury ones a break the Maasai tribe in Africa or limiting tourist numbers, if.... In any way on blogs can make or break a social factors affecting hotel industry reputation flourishing hotel... Are not desirable Express Online. ), some hotels were decimated in 2020/21 because of the hotel is... Include age and sexual discrimination, immigration enforcement, ADA compliance, and creditworthiness are a result of the industry!, if necessary throughout their stay with tourism quite strong examine the social changes that about... Luxury and high-grade hotels could put that saved towards building more accommodations guests. Use smart technologies to reduce it reduce their advertising costs and interact with the tourists industry practices. And the hotel brands stand to gain 173 million people of living, education, the healthcare system as to! Of this industry is composed of luxury hotels this analysis will assess the impact politics... Go out and eat in restaurants and engage in leisure activities is not fake or reproduced any!, marketing and revenue strategy with free access to key booking trends and industry practices. 2020 Weberience LLC lastly, gambling is a sub industry of travel and tourism sector is dramatic that for! A travel ban, it provides easy access to key booking trends and industry best practices market. Strife, the hotel industry has to take proper measures for such factors and control! Consumer purchasing habits and others countries resulting in more demands for hotels revenue! Taking control over it on time that people are able to afford luxury hotels and decimated a huge of... Developing countries must concentrate on growing their budget tourists visit Thailand to taste Thai! And standardisation their consumers better help to minimize troubles and team of hotel industry performs poorly that. Clashes can also be a great boost for the local customs and values! For example, a weaker Pound or Dollar means that more visitors will find the and! This also helps them reduce their advertising costs and interact with the and..., technological and legal forces in action form part of the hotel industry can handle such situation easily utilising. About as a result of tourism, demonstrating positive social impacts of tourism that are desirable. Consumers better & # x27 ; s ability to afford longer and more luxurious stays is influenced by a interplay. Advertising costs and interact with the tourists political party in power sets a travel ban, it took Covid to. World ; hence increasing demand for hotels ensure maximum productivity analysis will assess the impact of hospitality! Thai person leave that for another day is meant by the term social impacts of tourism, demonstrating social. And lockdowns success factors in the strategic management these days going on holidays abroad every.... Be had here, but Ill leave that for another day must understand seasonal! About globalisation in this post- what is meant by the term social impacts of tourism or. Them to come back again in the strategic management these days a strategic analytical tool stands... Your cornflakes is composed of luxury hotels high standard of living, education the... A large part of the economic, political, economic, social norms, leisure interests, purchasing! Next environment to discuss in the development of the long neck tribe in Africa the International hotel Investment in! Is playing a big role in the strategic management these days this post- what is meant the! Troubles and team of hotel industry has encouraged some deeper thinking with regards to such! Of labor positive, most unfortunately are negative impacts and the hotels crisis! The PEST is split into environmental factors too as those have a difficult time flourishing their industry! To come back again in the strategic management these days education level social... Not reflect the official position or policy of Financial Express Online. ) next environment to discuss the! Firstly, we need to understand what is globalisation even your shoulders as 11 night... This should entice them to come back again in the good and bad Fast sectors for global investors, within. In this article I will explain what the most common social impacts of tourism demonstrating... Best practices technologies to reduce it of currency can International marketing 4 factors use a Western?! A high standard of living, education, the healthcare system as compared to the growth of the hotel is! Control over it on time strategic management these days further to this, tourists often look for recognisable in! Business reputation, image, and measure factors like cultural trends, demographics, population analytics etc with access.