Hospitality (accommodation and food activities) has been one of the sectors most affected by lockdowns and government restrictions throughout the coronavirus (COVID-19) pandemic. 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. Economic factors that may have influences on the hospitality industry. The government has a stronghold over the hotel Here are the top 6 management issues in the hospitality industry: The Constantly Changing Expectations of Customers. There are other social factors too that affect the global hospitality industry. Likewise, Londons Lanesboroughs new Royal Suite costs 26,000 a night, though many small budget hotels offer as little as 11 a night. There are different categories of business in the hospitality industry such as accommodation, food and beverage, travel and tourism, and entertainment. Most of the environmental factors which affect hotel business are flood, storm or heavy rains. Online booking facilities either directly or through third-party apps has helped boost the booking rate of hotels. There are many social benefits of tourism, demonstrating positive social impacts. But at the same time, it has various nuances that require in-depth analysis. The current generation has shown a strong trend towards traveling. 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. 2. Do we want everything to become standardised though? Hotels in the EU must comply with the GeneralData Protection Regulation(GDPR)as they collect high volumes of personal data from guests. Culture clashes can also be exasperated by the fundamental differences in culture between the hosts and the tourists. to patrons in varying locations. PESTLE Analysis of Hospitality Industry. range of service sectors. Labor laws include age and sexual discrimination, immigration enforcement, ADA compliance, and increased cost of labor. Political factors that may impact on the hotel industry. There are many social benefits of tourism, demonstrating positive social impacts. Consumer preference is changing rapidly. 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. Political instability is also an important factor. The PESTLE analysis is related to the assessment of the external environment in which the industry is functioning. Tourism is, at its core, an interactive service. Many 6. 2. For instance, restaurants must comply with food hygiene standards though these standards may vary from one country to another. They have learnt to speak English and to eat Western food. Tourists visit Beijing to learn more about the Chinese Dynasties. we break down the political, economic, socio-cultural, technological, legal, and environmental factors that govern the hotel industry worldwide. hotel industrys biggest competition. The industry is also overly reliant on the biodegradable items to counter the climate crisis. Local people often gained new roads, new sewage systems, new playgrounds, bus services etc as a result of tourism. Hotels have become more and more technology-friendly in recent times. There are many examples of ways that tourists offend the local population, often unintentionally. There is likely to be economic inequality between locals and tourists who are spending more than they usually do at home. hotel industry to welcome more foreign guests and expand their economy. Social factors that may have influences on the hospitality industry Social environment is the next environment to discuss in the PESTLE analysis of the hospitality industry. This industry has witnessed a surge of substantial growth over the last decade since the end of the financial crisis of 2007/8. To study the best practices of sustainability in hotel industry. 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. Industry Analysis is effectively covered under the Economic heading. These businesses may also promote the local cultures and arts. Recessions, inflations, and other economic fallouts severely affect people's ability to afford luxury hotels. The role of education and training providers to support these issues is therefore significant. Putting your hotel in front of 600,000+ travel agents. This is often an example of careful tourism planningand sustainable tourism management. Individualism and collectivism. But as their maturity level increases, so, too, does their ability to impact the hospitality sector. This is also often referred to associo-cultural impacts. Developing countries must concentrate on growing their budget Read also: Business tourism explained: What, why and where. Lastly, gambling is a common occurrence as a result of tourism. also compliances that all hotels need to meet. industry. However, it Stakeholders in tourism: Who are they and why do they matter? Known by its initials, F&B is the largest segment of the hospitality industry and is estimated to provide around half of all meals eaten in the U.S. today. Did you know that you should never put your back to a Buddha? On the contrary, when the economy is stable, many people are likely to go on holidays, and eat out regularly. The hotel owners/managers should calculate the energy usage seriously and perhaps use smart technologies to reduce it. BUT, there are also some positives. globe. affect the attractiveness of a vacation spot. These are two examples of cultures which have remained unchanged for the sole purpose of tourism. weather in the local area is the deciding factor for whether someone chooses to Theres something great about trying out a traditional, yet unfamiliar coffee shop, or any independant place for that matter. Bleisure travelers & hotel work spaces. scarce. Restaurant Industry PESTEL analysis can identify how political, economic, socio-cultural, technological, ecological, and legal issues can impact the conditions of the restaurant industry. currencies are stronger than the American dollar, people outside of the United competition with corporations like Airbnb, which offer a variety of rooms for iHop, too. Therefore, political factors that affect the tourism and hospitality industry will affect the hotel industry as well. within must follow truth-in-menu laws, which means the food establishment must The Political and Security challenges. Due to lockdowns in 2020/21 many restaurants around the world were closed, and many had to rely on home delivery services only. 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 show the sole of your feet to a Thai person? You may also like reading PESTEL analysis of the aviation (airline) industry. 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. governments are still carrying out policies that benefit their hotel industry. PESTEL is a strategic analytical tool that stands for political, economic, social, technological, environmental and legal factors. If you liked any of these articles, please feel free to share with others by clicking on the icons provided. 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 Political stability is the key to the success of any industries and it is . Hotels often run out of rooms during peak industry, otherwise known as the hospitality industry, spans across a large These stats show the importance of this industry in the global economy and lives of some many people (Condor Ferries Ltd, 2021). Anyone can write a review and post it on a This is a huge problem To study the environmental issues of hotel industry. The supply! The factors affecting the hospitality and tourism industry are wide-ranging and varied. The hotel Read also: Environmental impacts of tourism. 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. Social Factors Affecting Travel Industry Posted By : admin Tourists visiting a place can have a significant impact on the community they are visiting. Continued Environmental factors that may have influences on the hospitality industry. Legal factors that may have influences on the hospitality industry. Nicole refers to a recent publication,The State of Hospitality 2022by Sommet Education, Switzerland,and says, When we think about growth of hospitality and tourism, or any industry for that matter, the discussion often becomes a macro-economic one. 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. We recently got a chance to interact with Nicole Philips, Director of the MSc in Real Estate, Finance and Hotel Development at Glion Institute of Higher Education, Switzerland and she keenly explained the threekey factors affecting the growth of the hospitality and tourism industry. They touch on areas such as business and financial analytics, mergers and acquisitions, portfolio valuations and private equity. The sector may have also been affected by Brexit, but as the end of the transition period coincided with the start of the latest lockdown, it is hard to separate the effects of the two. Similarly, destinations risk standardisation in the process of satisfying tourists desires for familiar facilities and experiences. sectors for global investors, especially within the United States. Almost all of them are fitted with CCTV cameras to provide security and other features that make the guests stay more comfortable. Preserving Local Culture In the UK, hoteliers must comply with the Gas Safety (Installation and Use) Regulations 1998 to protect the welfare of their guests. Hotels that are still Natural disasters and weather changes, as well as transportation services and consumer protection. It goes through economic cycles first and comes out first. And globalisation helps us to get that! 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 activists to ensure a minimal carbon footprint. 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). room. Any major economic change massively affects the hotel industry. 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. It does not encourage people to go out and eat in restaurants and engage in leisure activities. If you are interested in learning more about topics such as this subscribe to my newsletter! The strength and the weakness of currency also impact on the hotel industry. You can learn more about globalisation in this post- What is globalisation? It is not fake or reproduced in any way. 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. hotel industry. Wifi services, lifts, intercoms, etc. Or show romantic affection in public in the Middle East? A little education in this respect could go a long way, but unfortunately, many travellers are completely unaware of the negative social impacts that their actions may have. continuing to use environmentally harmful materials are facing a downfall in For instance, many people have negative perceptions, and therefore, do no seek employment opportunities in this industry, creating skill shortage that is crippling it. Any major economic change massively affects the hotel industry. and conveniently book your room through an app and its often less expensive Service in the hospitality industry holds the key. (The author is a well-known travel writer. stay at a certain hotel. Do you have any comments on the social impacts of tourism? Do you want an authentic squat toilet in your hotel bathroom or would you rather use a Western toilet? SiteMinder's Hotel Booking Trends for 2023 . Hilton Hotels also changes its offerings to guests based on the location of the hotel. 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). People who stay at hotels will take photos industry to crumble. Therefore, an in-depth analysis of these factors is very useful for hoteliers to devise their business and marketing strategies. 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. Hotel chains are improving profits and revenue by acquiring worldwide resorts, like how Marriott International acquired Starwood Hotels & Resorts Worldwide. Social media, like Facebook, and mobile apps are the most prominent tools hotel owners can use, but must also be wary of. These factors are outside the influence of the company (Lindbald, 2014). travelers to employ hotel services. When we travel, most tourists do want a sense of familiar. Another thing the government controls are taxes. Fast This illustrates the importance of Tourism industry and its influence on global economy segment. 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. In addition to data protection laws, hotels need to comply with many other rules and regulations. considered to be progressive keeping in mind the rise of crime and terrorism Almost all countries now have discrimination laws in place which has benefitted the tourism industry and in turn the hotel industry. I think there is also an ethical discussion to be had here, but Ill leave that for another day. 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