Copyright 2017 2025. The analysis is presented below: Political Environment. This is something that world governments must 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. 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. This could include putting restrictions in place or limiting tourist numbers, if necessary. weaknesses, opportunities, and threats this industry faces, read our SWOT 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. This added to the rising expenditure capabilities is ensuring that a wider class of people is able to use the hotel industry. And due to this reason, the more open a government is towards tourism laws, the larger the amount of tax it withdraws from the hotel industry. Hotels consume a lot of water, electricity, and gas and contribute to the shortage of these resources. Natural disasters and weather changes, as well as transportation services and consumer protection. for hotels who often see a hike in profit during peak seasons when rooms are Social environment is the next element of focus to in the PESTLE analysis of the hotel industry. There are positive social impacts of tourism, demonstrating benefits to both the local community and the tourists. Consumer preference is an important factor. These include safety and health There are For Centara Hotels & Resorts, Thailand's leading hotel operator, this balance is at the core of its strategic vision. In areas that are under political strife, the hotel industry performs poorly. This is further fueled by social media platforms where people are able to exchange their experiences and thereby create peer pressure to travel. There are different ways with which governments can influence the hospitality industry. Anyone can write a review and post it on a activists to ensure a minimal carbon footprint. Such operations in Canada, Europe and America are very costly, but they're affordable in the local Thai market. Political and Security challenges. Tourists visit Beijing to learn more about the Chinese Dynasties. Many of them have already come up with additional services such as gym, restaurant, and massage parlour that many youngsters like. to patrons in varying locations. Specialists in providing advice and services to the hotel industry. massage parlors. Environmental factors that may impact on the hotel industry. 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.. nature helps the growth of the hotel industry. 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. 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. Traditionally hospitality and tourism has not always lead the way and innovated. He holds an MSc in Tourism & Hospitality from the University of Sunderland. Individualism and collectivism. 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 will further drive up wages and . But at the same time, they also lead to a higher demand for budget hotels thereby increasing certain verticals of this industry. There are many social benefits of tourism, demonstrating positive social impacts. Methodology This study is based on secondary data. The marginal cost increases, so the supply contracts. On the contrary, many studies suggest that sunny weather contributes to the increase in tourism. If you are interested in learning more about topics such as this subscribe to my newsletter! Likewise, staycations can also be affected by it badly. 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. These businesses may also promote the local cultures and arts. Similarly, hotels are using information technology in various ways to serve their consumers better. luxury hotels, boutique hotels, and budget hotels. Copyright 2017 2025. Financial supports and other initiatives from governments play a big role to promote the hospitality industry. However, under-tapped opportunities and pent-up demand still exist. millennials, enjoy the mass selection of rooms Airbnb offers. Travelers, particularly I have seen this myself in many places including The Gambia and Thailand. The social class so formed will determine the category of hotels and lodges to be used by different consumers. Tourism can be a catalyst for strengthening a local community. Take a look at the likes of the long neck tribe in Thailand or the Maasai Tribe in Africa. Corporate social responsibility (CSR) in the hotel industry is a common practice where companies take good actions to improve society. Local economies greatly and directly benefit from the hospitality industry when domestic and international tourists spend money in restaurants, hotels, transports, and entertainment spots. Factors Affecting Sales in the Leather Industry. 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. Tourists visit Thailand to taste authentic Thai food. PESTEL analysis of the hospitality industry. This includes partnership issues between partners, including close family members and the resulting litigation due to lack of proper . In this article I will explain what the most common social impacts of tourism are and how these are best managed. The management of a company uses PESTEL analysis to weigh the factors that can hinder or promote the industry's growth. 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. The rising weather crisis has incremented such factors in certain places. The State of Hospitality 2022highlights the current employment and skills shortages in the sector and initiatives in place to address these gaps. The following is a brief Hilton . This can have significant social/socio-cultural impacts. Technology has greatly benefitted the hospitality industry. Hotels are also becoming more accepting of different classes of people and are ensuring they are better equipped to serve the necessities. Also, the competing enterprises, governments, courts . Any major economic change massively affects the hotel industry. to its influence. Failure to provide data safety may costs hotels millions of pounds. Likewise, hotels in the UK must comply with the UK GDPR. This often contributes to the conservation and sustainable management of natural resources, the protection of local heritage, and a renaissance of indigenous cultures, cultural arts and crafts. 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. industry. This results in cancellations of booking and other supplementary services, which in turn cause less revenue for hotels. There are many social benefits of tourism, demonstrating positive social impacts. Globalisation is inevitable in the tourism industry because of the interaction between tourists and hosts, which typically come from different geographic and cultural backgrounds. Social factors play a major role in influencing the hospitality industry. However, issues such as political strife and environmental crisis pose a serious threat to its growth. Years ago, hotels only used traditional media (print and broadcast), but now there are new media brought forth via the internet to consider. Power your distribution, marketing and revenue strategy with free access to key booking trends and industry best practices. Therefore, an in-depth analysis of these factors is very useful for hoteliers to devise their business and marketing strategies. We hope the article PESTEL analysis of the hospitality industry has been helpful. A simple explanation. Everything from governmental changes to high stake competitors and the uncontrollable weather impedes the hospitality and tourism industry too. 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. 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. Five technologies in particularservice automation, fixed mobile convergence, location-based services, connected meeting rooms, and chatbots and mobile appsare poised to change the guest experience and create areas of opportunity for . The last of the social impacts of tourism that I will discuss is crime, gambling and moral behaviour. Or should we let them grow and change, just as we do? This can help to promote/ preserve local traditions. Hotels do offer more than the standard Airbnb . If youre curious about the strengths, governments are still carrying out policies that benefit their hotel industry. Hotel industry has to take proper measures for such factors and taking control over it on time. Some of the expensive hotels in the USA cost guests thousands of dollars a night. The hotel industry has existed The hotel industry in any country is largely dependent on tourism and thereby on the government regulations of the country. He identified four cultural dimensions, then later studies added two more: Power distance. This growth is further fuelled by the government initiatives. Legal factors that may have influences on the hospitality industry. Aside from pandemic protocols and travel restrictions, other factors expected to affect hotel performance in 2022 include: Staffing shortages. He holds an MSc in Tourism & Hospitality from the University of Sunderland. It was a similar picture during the recession. 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. growth is expected into 2020 and beyond. hotel is near an area with high crime rates, itll struggle to survive. This may help promote traditions that may have become distant. but it also helps travelers within a country. Hotel owners who are confident that their hotels Much of the technology, such as apps, third-party ordering, and direct online ordering, has been used for several years. Some destinations will encourage local cultures and arts to be revitalised. needs to be honest about the calories in the good and nutritional ingredients All Rights Reserved. Museums, shows and galleries are fantastic way to showcase the local customs and traditions of a destination. On the contrary, when the economy is stable, many people are likely to go on holidays, and eat out regularly. and conveniently book your room through an app and its often less expensive Choosing a spot with low crime is crucial for all hotel owners, otherwise, For example, souvenirs, snacks, and emergency medicine are some of the common items that many tourists buy. 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Environmental factors have a major impact on the hospitality industry. There are many examples throughout the world where local populations have changed because of tourism. 2. In most cases, the innkeeper law will state how much compensation the innkeeper will pay guests if their property is stolen or damaged. 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. 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. When vacationing, customers want to stay somewhere warm and relaxing. Most of the environmental factors which affect hotel business are flood, storm or heavy rains. 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. If a Guests will appreciate offers tailored to them, which will encourage them to come back again in the future. Second, the hotel-related industry had a strong inter-dependent . Economic factors that may have influences on the hospitality industry. they must understand the seasonal differences before pricing their rooms and Other relevant articles for you are: 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. Are you happy to eat rice and curry for breakfast as the locals would do or do you want your cornflakes? customers wont stay at their locations. Traveling Travel websites have made it easier for people to price shop hotels. Political factors that may have influences on the hospitality industry. 3. Because of social media, the news is available and updated 24/7. and write up an honest post about their experience. These are just a few examples of the negative social impacts of tourism. The rest of the world have modern electricity and iPhones, they watch TV and buy their clothes in the nearest shopping mall. Read also: Environmental impacts of tourism. 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. scarce. Events and festivals of which local residents have been the primary participants and spectators are often rejuvenated and developed in response to tourist interest. Overall, our findings show that most of the . PESTEL is a strategic analytical tool that stands for political, economic, social, technological, environmental and legal factors. Further to this, tourists often, out of ignorance or carelessness, fail to respect local customs and moral values. Airbnb (2020) Make the most of the growing demand for longer stays, available at: https://www.airbnb.co.uk/resources/hosting-homes/a/make-the-most-of-the-growing-demand-for-longer-stays-263 (accessed 22 April 2021), BBC (2020) Marriott Hotels fined 18.4m for data breach that hit millions, available at: https://www.bbc.co.uk/news/technology-54748843 (accessed 25 April 2021), Condor Ferries Ltd (2021) Hotel industry statistics 2020/21, available at: https://www.condorferries.co.uk/hotel-industry-statistics (accessed 24 April 2021), Style, T. (2019) Where will the UKs new 130,000 hotel rooms come from?, available at: https://www.savills.co.uk/blog/article/288955/commercial-property/where-will-the-uk-s-new-130-000-hotel-rooms-come-from-.aspx (accessed 24 April 2021). 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