For example, if international Read also: Economic leakage in tourism explained. M Rahman writes extensively online and offline with an emphasis on business management, marketing, and tourism. for centuries. For the specifics, keep reading this PESTLE analysis of the hotel industry to learn more. We dont walk around in Victorian corsets or smoke pipes anymore, Our social settings have changed immensely over the years. Therefore, an in-depth analysis of these factors is very useful for hoteliers to devise their business and marketing strategies. Now its all chains and multinational corporations. 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. Hospitality is one of the biggest investment Many destinations will make a conserved effort to preserve and protect the local culture. Get all the insights . Similarly, destinations risk standardisation in the process of satisfying tourists desires for familiar facilities and experiences. Consumer preference is changing rapidly. I think there is also an ethical discussion to be had here, but Ill leave that for another day. Travelers, particularly This detailed PESTEL analysis of the hotel industry aims to evaluate some of the macro factors that influence the global hotel industry, with particular references to the USA, the UK, and the EU. The current generation has shown a strong trend towards traveling. A shift accelerated by the global public health crisis, an unprecedented number of high-profile companies . There are many social benefits of tourism, demonstrating positive social impacts. Social factors that may impact on the hotel industry. 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. Along with that economic factors are split into legal factors for the same previously mentioned reason. Political stability and government initiatives are vital for the development of the hotel industry. Also, the competing enterprises, governments, courts . Anyone can write a review and post it on a It does not encourage people to go out and eat in restaurants and engage in leisure activities. Recessions, inflations, and other economic fallouts severely affect people's ability to afford luxury hotels. Factors Affecting Sales in the Leather Industry. Copyright 2017 2025. Many people now prefer private accommodations, hence the rising demand for Airbnb. Understanding the social impacts of tourism is vital to ensuring the sustainable management of the tourism industry. This can help to promote/ preserve local traditions. Many people believe globalisation to be a bad thing. hotel is near an area with high crime rates, itll struggle to survive. If there is income inequality, then it can minimize the ability of people to travel and stay at hotel's. Social-The factor can give positive impact on the future of the Ritz-Carlton Hotel.To enhance the operations in the international market, the company should give focus on the social factors that are prevailing in the market. Several long-standing factors have attributed to hotel dominance, particularly business and group travel, which accounted for about one-quarter of demand prior to the coronavirus, STR also. In one way, this is great! The top sex tourism countries in the world, Components of tourism: Structure of the tourism industry, 10 Economic impacts of tourism + explanations + examples, 150 types of tourism that are trending right now. Likewise, staycations can also be affected by it badly. A simple explanation, The 3 types of travel andtourismorganisations, 150 types oftourism! On the contrary, when the economy is stable, many people are likely to go on holidays, and eat out regularly. Also, graduated from Leeds Metropolitan University with a BA in Business & Management Studies and completed a DTLLS (Diploma in Teaching in the Life-Long Learning Sector) from London South Bank University. President with new ideals can swiftly impact the hotel industry, and overthrow At Marriott International, I supported the expansion of the company in the Europe, Middle East and Africa region. When I travelled to The Gambia I met a local worker (known as a . Are HNIs buying luxury properties amidst growing inflation and rising interest rates. The establishment activists to ensure a minimal carbon footprint. prostitution and sex tourism. Hotels have become more and more technology-friendly in recent times. We are losing our individuality and gaining a sense of global being, whereby we are more and more alike than ever before. The study reveals as what and how various social factors affects an organisations strategic human resource planning and decision making. These children would never have eaten such sweets should they not have come into contact with the tourists. For instance, in the UK, they must comply with the Gas Safety (Installation and Use) Regulations 1998 and the Health and Safety at Work Act 1974. He is a regular panel speaker at the International Hotel Investment Forum in Berlin. This article shares his insights into the impact of coronavirus on the hotel and leisure market, together with views discussed at the conference. This may help promote traditions that may have become distant. The industry is also overly reliant on the This leaves hotels, such as Best western with less customers. Our responsibility as educators is to give students the base to emerge strongly from these challenges. These factors examine the social environment of the market, and measure factors like cultural trends, demographics, population analytics etc. This also helps them to find out all the necessary information with ease. Tourism can be a catalyst for strengthening a local community. Various macroenvironment factors including economic, technological, demographic, political and social-cultural factors affect the hotel and hospitality industry either positively or negatively Macro environment factors enable business to assess the elements that would affect the economic environment of a business as a whole and not a particular Customers can now book their holidays and restaurant tables online. Various international hotel chains are shifting towards more Therefore, pressure groups, environmentalists, and governments put a lot of pressure on hospitality organisations to bring the issue of sustainability to their corporate agenda. Read also: Environmental impacts of tourism. . Therefore, they come under pressures from governments and NGOs to use them responsibly. Our General Mills SWOT Analysis examines internal and external factors that impact the company's operations, What is root cause analysis, the goal, and why is it important? In most cases, the innkeeper law will state how much compensation the innkeeper will pay guests if their property is stolen or damaged. 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 When vacationing, customers want to stay somewhere warm and relaxing. This industry has witnessed a surge of substantial growth over the last decade since the end of the financial crisis of 2007/8. The ultimatetourismglossary, 50 fascinating facts about the travel andtourismindustry. reasons, such as when visiting family, friends, on business, or vacationing. These include: demographics lifestyles tastes and trends The UK's aging population is an example of demographic. Eating out in restaurants regularly are strong in some countries and cultures. However, most of the world is now free for travelers and thus the hotel industry is facing a massive boom. In Thailand, many workers have exchanged their traditional work of plowing the fields to work in the cities, in the tourism industry. Local economies greatly and directly benefit from the hospitality industry when domestic and international tourists spend money in restaurants, hotels, transports, and entertainment spots. Do we want everything to become standardised though? The customer would never see this activity on a day-to-day basis, but important roles exist in fields such as international hotel development and asset management, real estate investment and investment strategies and financing. 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. He is a lecturer in Management and Marketing. For instance, if the U.S. or the UK governments impose travel bans, it will hurt the hotel industry immediately as demand for accommodation from tourists will be very low or none. In some locations, the innkeeper law must be posted inside the door of every guest room of the hotel. blog or share it on social media. However, issues such as political strife and environmental crisis pose a serious threat to its growth. The hotel owners/managers should calculate the energy usage seriously and perhaps use smart technologies to reduce it. Choosing a spot with low crime is crucial for all hotel owners, otherwise, The social class so formed will determine the category of hotels and lodges to be used by different consumers. The management of a company uses PESTEL analysis to weigh the factors that can hinder or promote the industry's growth. BUT, I cant help but wonder if this is always natural? The economic impact includes financial loss, reduction in customer demand at a national and international level, disruptions in the logistics and distribution channels, ruined the relationship with . websites forces hotels to remain competitive. Tourists visit Beijing to learn more about the Chinese Dynasties. The This can have significant social/socio-cultural impacts. Another thing the government controls are taxes. Copyright 2017 2025. In areas that are under political strife, the hotel industry performs poorly. Or show the sole of your feet to a Thai person? Hotels are also becoming more accepting of different classes of people and are ensuring they are better equipped to serve the necessities. If youre curious about the strengths, Aside from the economic impacts created by enhanced employment prospects, people with jobs are happier and more social than those without a disposable income. Although tourism is not the cause of sexual exploitation, it provides easy access to it e.g. The hotel industry has existed These businesses may also promote the local cultures and arts. This is Hospitality (accommodation and food activities) has been one of the sectors most affected by lockdowns and government restrictions throughout the coronavirus (COVID-19) pandemic. 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. also compliances that all hotels need to meet. Unquestionably, technology is playing a big role in the development of the hospitality industry. This PESTLE analysis of the hotel industry should provide you a clear look into the hotel industry and how it performs globally. Security breaches and turbulences affect many hotels around the world now and then. Approximately 44 million people are populating Argentina, and over 96% are European descendants. At the end of the post I have also included a handy reading list for anybody studying travel and tourism or for those who are interested in learning more about travel and tourism management. Similarly, many people prefer private accommodation now-a-days that has created opportunities for companies such as Airbnb. Further to this, tourists often, out of ignorance or carelessness, fail to respect local customs and moral values. Fast There are many examples of ways that tourists offend the local population, often unintentionally. Views expressed are personal and do not reflect the official position or policy of Financial Express Online.). Similarly on one side these factors push the tourism industry in the short and long run positively and negatively while on the other side affect the economic growth of the global PESTEL analysis of the hospitality industry. sharing news thanks to the internet. unemployment rates, job growth, and travel spent. This added to the rising expenditure capabilities is ensuring that a wider class of people is able to use the hotel industry. People, and talent, are another key factor that fosters or limits growth. Continued Technological Changes and regular innovation. and write up an honest post about their experience. 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. It is an industry which offers opportunities to youngsters to step into their career ladder. decision and a country loses the vast majority of its economy. Purpose of the study The purpose of this study is as follows: 1. Cultures are preserved and protected and globalisation is limited. This could include putting restrictions in place or limiting tourist numbers, if necessary. Analysis of the Hotel Industry here to learn more. I am going to explain how different factors can affect the industry as in positive as in negative way. I have covered this in my YouTube video below! Hopefully, this In the coming years decades, the group will focus on delivering warm Thai hospitality in line with the latest social and technological trends to create exceptional customer experiences. Customer Insights and Going Online. If you liked any of these articles, please feel free to share with others by clicking on the icons provided. This helps to enhance the community spirit as people tend to have more disposable income as a result. 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. This illustrates the importance of Tourism industry and its influence on global economy segment. 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. The government has a stronghold over the hotel we break down the political, economic, socio-cultural, technological, legal, and environmental factors that govern the hotel industry worldwide. The External analysis can assess the factors affecting the industry to be existed including political, economical, social, technological, legal and environmental which have great impacts to run the business and use PESTLE analysis. Putting your hotel in front of 600,000+ travel agents. The economic cycle, especially in relation to supply and demand and value of money, is obviously a major factor in growth. Global Distribution System. Some destinations will encourage local cultures and arts to be revitalised. strength of currency can bolster the industry. A simple explanation. Firstly, we need to understand what is meant by the term social impacts of tourism. Since this industry uses a Is it right to go topless on a beach if within the local culture it is unacceptable to show even your shoulders? You can quickly Continued These are just a few examples of the negative social impacts of tourism. 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). Government spending, Unemployment policy, Exchange rates, Consumer confidence. affect the attractiveness of a vacation spot. Because tourism involves movement of people to different geographical locations cultural clashes can take place as a result of differences in cultures, ethnic and religious groups, values, lifestyles, languages and levels of prosperity. Do you want to struggle to get by when you dont speak the local language or are you pleased to find somebody who speaks English? However, it is historically proven that the hospitality industry bounces back very swiftly after being damaged by wars and other political instabilities. Sometimes, the support is absolutely necessary to keep the industry going. Corporate social responsibility (CSR) in the hotel industry is a common practice where companies take good actions to improve society. 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. Certainly, there are several factors that determine the success of this industry. To study the best practices of sustainability in hotel industry. When we travel, most tourists do want a sense of familiar. 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. Traditionally hospitality and tourism has not always lead the way and innovated. Do you want an authentic squat toilet in your hotel bathroom or would you rather use a Western toilet? 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