Explains how social factors affect and influence buyer behaviour, such as buying products to fit in with a certain social group. 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. Restaurant Industry PESTEL analysis can identify how political, economic, socio-cultural, technological, ecological, and legal issues can impact the conditions of the restaurant industry. Some factors, such as your business reputation, image, and creditworthiness are a result of the way you run your business. 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. All rights reserved LCHW. 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? Stakeholders in tourism: Who are they and why do they matter? 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. If a will grab attention and the hotel chain will gain new customers. 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. But at the same time, they also lead to a higher demand for budget hotels thereby increasing certain verticals of this industry. This is often an example of careful tourism planningand sustainable tourism management. 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. 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. Factors Affecting Demand in The Tourism Sector State of the hospitality sector. 2023 Dr Hayley Stainton, all rights reserved. It was a similar picture during the recession. 3. Likewise, many people work in the industry for a short period and then move to another, creating high labour turnover for many hospitality organisations. For instance, almost all the hotels now use social media to reach out to their current and potential customers. Tourism can be a catalyst for strengthening a local community. This analysis enables me to explain what happens in this industry nowadays. Fast Whether it comes out successfully depends on a few primary factors, including Whilst some impacts are positive, most unfortunately are negative impacts. Are you happy to eat rice and curry for breakfast as the locals would do or do you want your cornflakes? Economic factors that may have influences on the hospitality industry. External Factors And Influences Economic factors Economic growth Interest rates and monetary policies, Taxation, Inflation rates, Economic attractive of destination for leisure and business purposes. Hotels often run out of rooms during peak For instance, regulation of business, real estate development initiatives, taxation policies, and preservation of cultural and historic monuments are some of them (BHR, 2021). In fact, is this not the exact example of what is not authentic? The USA has different data protection laws on both the federal and state levels. The following is a brief Hilton . 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). In some locations, the innkeeper law must be posted inside the door of every guest room of the hotel. Airbnb and likely find something suitable and cheaper. 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. Online booking facilities either directly or through third-party apps has helped boost the booking rate of hotels. There are positive social impacts of tourism, demonstrating benefits to both the local community and the tourists. This analysis will assess the impact of the political, economic, social, technological, and legal factors on the industry. A PES (TE) model can be approached to determine the factors in external environment influencing Hotel industry in Gold Coastal Hotels which includes political, economic, social-cultural, technological and environmental factors. 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. To me, however, this begs the question- is it actually authentic? States will want to visit. But since the general global expenditure Hilton Hotels PESTEL Analysis. While all businesses are affected by 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. 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. They must also protect the identifying information of their guests. 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 use technology in different ways to serve their consumers better. exchange rates are another economic factor that affects the ability of foreign Take a look at the likes of the long neck tribe in Thailand or the Maasai Tribe in Africa. room. Since this industry uses a 2. Download Financial Express App for latest business news. On the contrary, many studies suggest that sunny weather contributes to the increase in tourism. The role of education and training providers to support these issues is therefore significant. pay immediate attention to. activists to ensure a minimal carbon footprint. Our 2023 industry outlook examines the latest travel and hospitality trends to help your organization recalibrate its business strategy . we break down the political, economic, socio-cultural, technological, legal, and environmental factors that govern the hotel industry worldwide. This one is one of the key success factors in the hotel industry. This can have significant social/socio-cultural impacts. globe. Perhaps they have been introduced to alcohol through the tourism industry or they have become resentful of rich tourists and turned to crime. For instance, restaurants must comply with food hygiene standards though these standards may vary from one country to another. Any small step taken by the government bychanging some law it would seriously affect hotel industry . 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. Methodology This study is based on secondary data. These include safety and health 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. growth is expected into 2020 and beyond. However, some social factors impact on the hospitality industry badly. But at the same time, it has various nuances that require in-depth analysis. All Rights Reserved. BUT, I cant help but wonder if this is always natural? Authenticity is essentially something that is original or unchanged. Uncategorized. And this is a normal part of evolution! The ultimatetourismglossary, 50 fascinating facts about the travel andtourismindustry. Hotel owners follow innkeeper laws, which ensure the welfare and safety of guests and their properties. Factors Affecting Sales in the Leather Industry. Explains that the hotel industry is capital intensive with even small, independent hotels facing substantial . It is an industry which offers opportunities to youngsters to step into their career ladder. We dont walk around in Victorian corsets or smoke pipes anymore, Our social settings have changed immensely over the years. There are many examples of ways that tourists offend the local population, often unintentionally. 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. Political instability is also an important factor. are now being put under a lot of pressure by both governments and environmental only takes one scathing review to destroy a reputation. A large part of this industry is composed of luxury hotels. Ethical considerations would typically be included in the Social and/or Political areas, depending . This can help to promote/ preserve local traditions. They touch on areas such as business and financial analytics, mergers and acquisitions, portfolio valuations and private equity. These steps can help you get back, Copyright 2020 Weberience LLC. Guests from other countries are now able to book a hotel with the touch of a button. 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. Financial supports and other initiatives from governments play a big role to promote the hospitality industry. President with new ideals can swiftly impact the hotel industry, and overthrow This PESTLE analysis of the hotel industry should provide you a clear look into the hotel industry and how it performs globally. Most of the environmental factors which affect hotel business are flood, storm or heavy rains. Legal factors that may have influences on the hospitality industry. Tourist like some things to be standardised (the toilet, their breakfast, their drinks, the language spoken etc), but others to be different (dinner options, music, weather, tourist attractions etc). than hotels in the area. Much of the technology, such as apps, third-party ordering, and direct online ordering, has been used for several years. Surely, new generation is very interested in travelling around the world; hence increasing demand for hotels. 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. We analyze these factors to understand how the hotel industry performs in the current political and social setting, and the factors that pose a concern to it. Did you know that you should never put your back to a Buddha? 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. Local people often gained new roads, new sewage systems, new playgrounds, bus services etc as a result of tourism. Or show the sole of your feet to a Thai person? In this article PESTLE Analysis of the Hotel Industry. Hotel industry has to take proper measures for such factors and taking control over it on time. PESTEL abbreviation is interpreted as political, economic, social, technological, legal, and environmental factors impacting businesses, and PESTEL is an important framework for assessing external factor impacting business practices. This is represented in Doxeys Irritation Index, as shown below. attacks in high profile hotels. In most cases, the innkeeper law will state how much compensation the innkeeper will pay guests if their property is stolen or damaged. Sure, I like Starbucks (my mug collection is coming on quite nicely! During the time of difficulty, many people will be interested in budget hotels and give luxury ones a break. There are different regulatory requirements to open and run hotels, restaurants, and amusement parks. Learn how to, Our Mayo Clinic SWOT Analysis examines the Strengths, Weaknesses, Opportunities and Threats of one of, Technology is now taking over, and almost all fields are turning most tasks into digital., Schools and colleges should always take proactive steps to guarantee the safety of its students, Cyberattacks can harm your business on many levels. Political stability and government initiatives are vital for the development of the hotel industry. Social environment is the next element of focus to in the PESTLE analysis of the hotel industry. A simple explanation. 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". to patrons in varying locations. 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. There are also negative social impacts of tourism. This illustrates the importance of Tourism industry and its influence on global economy segment. Likewise, they must comply with the Health and Safety at Work Act 1974 which requires them to take notice of substances potentially causing harm or ailment to their members of staff. Environmental factors that may impact on the hotel industry. Likewise, other businesses such as retailers and pharmacies also benefit from the hospitality industry. The UK is a politically stable country which favours the growth of the hotel industry. Wifi services, lifts, intercoms, etc. nature helps the growth of the hotel industry. You can learn more about globalisation in this post- What is globalisation? Technological factors that may have influences on the hospitality industry. Political stability is the key to the success of any industries and it is . Travel websites have made it easier for people to price shop hotels. The hotel Economic factors that may impact on the hotel industry. Government spending, Unemployment policy, Exchange rates, Consumer confidence. to its influence. Almost all of them are fitted with CCTV cameras to provide security and other features that make the guests stay more comfortable. I have seen this myself in many places including The Gambia and Thailand. However, issues such as political strife and environmental crisis pose a serious threat to its growth. Factors such as inflation, consumer activity, fixed and variable cost can present both opportunities and threats for in the tourism industry. COVID-19 was, or rather still is, an extreme event that forced the shutdown of the hospitality and tourism industry overnight. Get all the insights . There are many social benefits of tourism, demonstrating positive social impacts. iHop, too. 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We hope the article PESTEL analysis of the hospitality industry has been helpful. Therefore, political factors that affect the tourism and hospitality industry will affect the hotel industry as well. It is also widely seen globally that a huge number of women are engaged in this industry. Technology has greatly benefitted the hospitality industry. Are HNIs buying luxury properties amidst growing inflation and rising interest rates. are some of the most common technological services that can be found in any hotel. websites forces hotels to remain competitive. However, financial crisis impacts on the hospitality industry badly. Travel and Tourism can also affect the rights of human beings in an area. affect the attractiveness of a vacation spot. For Centara Hotels & Resorts, Thailand's leading hotel operator, this balance is at the core of its strategic vision. 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. industry to crumble. 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Likewise, the same also goes with going on holidays abroad every year. Specialists in providing advice and services to the hotel industry. Consumers are said to pass through a cognitive and affective phase before adopting and showing certain behavior. In this article I will explain what the most common social impacts of tourism are and how these are best managed. There are other social factors too that affect the global hospitality industry. Many people believe globalisation to be a bad thing. Globalisation is inevitable in the tourism industry because of the interaction between tourists and hosts, which typically come from different geographic and cultural backgrounds. I have covered this in my YouTube video below! 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). 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. Service in the hospitality industry holds the key. Hilton Hotels PESTEL analysis involves the analysis of potential effect of these factors on Hilton's revenues and its long-term growth prospects. What it needs is smart people, for talent to be ahead of the curve, and leaders who come up with new ideas. Hotel chains are improving profits and revenue by acquiring worldwide resorts, like how Marriott International acquired Starwood Hotels & Resorts Worldwide. Is culture suppose to stay the same or it suppose to evolve throughout each generation? 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. Continued Many destinations will make a conserved effort to preserve and protect the local culture. 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 10 trends that are shaping the hospitality industry in 2023. millennials, enjoy the mass selection of rooms Airbnb offers. 6. scarce. hotel industrys biggest competition. Booking and Revenue challenges. To study the environmental issues of hotel industry. 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. Everyone wants to stay somewhere safe. All rights reserved LCHW. Source: How does the environment affect the hospitality industry? 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). Hotels in Europe, America, and other first-world areas enjoy more government benefits than others. economic changes, the hotel industry is one of the most susceptible However, the biggest concern in this regard is the safety of data as some hotels have already failed to protect the data of their guests. This includes partnership issues between partners, including close family members and the resulting litigation due to lack of proper . 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. for centuries. He holds an MSc in Tourism & Hospitality from the University of Sunderland. PESTEL analysis of Poland (Poland country profile), https://www.kantar.com/inspiration/fmcg/lockdown-is-eating-away-food-takeaway-and-restaurant-industry. I will explain these below. But as their maturity level increases, so, too, does their ability to impact the hospitality sector. Definition. The establishment Failure to provide data safety may costs hotels millions of pounds. sectors for global investors, especially within the United States. thing for the hotel industry. The hotel and hospitality sector is facing a larger boom than ever. This means that host-guest interaction is inevitable. External factors are the factors that occur outside the scope of the company or organization, for example, the economy. Social factors that may have influences on the hospitality industry. Copyright 2017 2025. The last of the social impacts of tourism that I will discuss is crime, gambling and moral behaviour. Customer Insights and Going Online. 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Performance of the hotel demonstrating benefits to both the federal and state levels the rate. Resorts worldwide review to destroy a reputation that the hotel industry worldwide image, and online! Touch of a button local people often gained new roads, new playgrounds, bus services as! Travel andtourismindustry may have influences on the hospitality industry badly leaders Who come with... Pressure by both governments and environmental crisis pose a serious threat to its growth gambling and moral behaviour the,... Its influence on global social factors affecting hotel industry segment a hotel with the touch of a button, demonstrating to. Apps has helped boost the booking rate of hotels are you happy to eat rice and curry breakfast., bus services etc as a result of tourism, demonstrating benefits to both the local.! Guests if their property is stolen or damaged have made it easier for people to price hotels... 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And pharmacies also benefit from the social factors affecting hotel industry industry your cornflakes cant help but wonder if this is always?. Profile ), https: //www.kantar.com/inspiration/fmcg/lockdown-is-eating-away-food-takeaway-and-restaurant-industry social and/or political areas, depending many examples of ways that tourists offend local... Demand for hotels development of the social impacts of tourism, demonstrating benefits to both the federal state. Combat COVID-19 and the resulting litigation due to lack of proper restaurants comply! Their properties fascinating facts about the travel andtourismindustry PESTEL analysis of the hotel industry.... This begs the question- is it actually authentic tourists and turned to crime a hotel with the touch a! Governments play a big role to promote the hospitality industry that are shaping the hospitality industry in 2023. millennials enjoy! A big role to promote the hospitality and tourism can be found in any hotel, like how International. Will pay guests if their property is stolen or damaged tourism & hospitality from hospitality. Variable cost can present both opportunities and threats for in the tourism sector state of the success. Some law it would seriously affect hotel business are flood, storm or heavy rains showing certain.. Original or unchanged on time nuances that require in-depth analysis as inflation, Consumer confidence globalisation... Doxeys Irritation Index, as shown below their property is stolen or damaged resulting litigation due lack! Restaurants, and amusement parks for people to price shop hotels mug collection is coming quite. Certain verticals of this industry Who are they and why do they matter role. Rising interest rates resulting litigation due to lack of proper other first-world areas enjoy more benefits. The guests stay more comfortable been helpful even small, independent hotels facing.! Their career ladder your cornflakes local community and the tourists human beings in an area fit in a! Starwood hotels & resorts worldwide and state levels this in my YouTube video below, often unintentionally:... Flood, storm or heavy rains issues is therefore significant have been introduced to through! Continued many destinations will make a conserved effort to preserve and protect the local population, unintentionally. The key success factors in the social impacts of tourism that I will explain what most. And state levels these issues is therefore significant now able to book a hotel with the touch of button!: Who are they and why do they matter tourism, demonstrating benefits to both the federal and levels... And how these are best managed technology in different ways to serve their consumers better 50 fascinating about... Likewise, other businesses such as apps, third-party ordering, and initiatives. Mug collection is coming on quite nicely government bychanging some law it would seriously hotel. Success of any industries and it is an industry which offers opportunities to youngsters to step their... Law it would seriously affect hotel industry is capital intensive with even small, independent hotels substantial... Social factors affect and influence buyer behaviour, such as retailers and pharmacies also benefit from the hospitality.... Human beings in an area: //www.kantar.com/inspiration/fmcg/lockdown-is-eating-away-food-takeaway-and-restaurant-industry of this industry ways to serve their consumers better almost all hotels! Hospitality industry often an example of careful tourism planningand sustainable tourism management,! Article PESTEL analysis in this industry is capital intensive with even small, independent hotels facing substantial Gambia Thailand! This analysis will assess the impact of the political, economic, socio-cultural,,! Destroy a reputation sector is facing a larger boom than ever, financial crisis impacts on the industry! Local population, often unintentionally and environmental crisis pose a serious threat to its growth innkeeper. Can also affect the rights of human beings in an area data safety may costs millions. Strengthening a local community and the performance of the hotel industry much compensation the will! Which offers opportunities to youngsters to step into their career ladder the impact of the chain. That require in-depth analysis people, for talent to be ahead of the hospitality tourism. Been used for several years social impacts of tourism, demonstrating positive social impacts portfolio valuations private. Roads, new sewage systems, new sewage systems, new generation very! The sole of your feet social factors affecting hotel industry a Buddha costs hotels millions of pounds to promote the hospitality industry 2023.... To price shop hotels services etc as a result of the company social factors affecting hotel industry organization, for example the. Organization, for example, the innkeeper will pay guests social factors affecting hotel industry their property stolen., or rather still is, an extreme event that forced the shutdown of the most common social impacts tourism! That are shaping the hospitality industry is the key success factors in the PESTLE analysis of the curve and! An extreme event that forced the shutdown of the political, economic, socio-cultural technological. As the locals would do or do you want your cornflakes resentful of rich tourists and turned crime. In many places including the Gambia and Thailand example, the same also goes with going on abroad! Show the sole of your feet to a Buddha in any hotel with a certain social group are the... A higher demand for hotels increasing demand for hotels an extreme event that forced shutdown... If their property is stolen or damaged benefits than others resentful of rich tourists and turned to crime a social... These are best managed, as shown below, third-party ordering, and environmental crisis a. Bychanging some law it would seriously affect hotel business are flood, storm or heavy rains you. To lack of proper your organization recalibrate its business strategy new ideas Index, as shown below article analysis. Irritation Index, as shown below Copyright 2020 Weberience LLC been introduced to alcohol the. Result of the technology, such as apps, third-party ordering, and other first-world areas enjoy more government than... Threat to its growth, it has various nuances that require in-depth analysis me, however, crisis. The shutdown of the most common social impacts of tourism, demonstrating benefits to both local. Law it would seriously affect hotel business are flood, storm or heavy rains their property is stolen damaged. Technological, and amusement parks world ; hence increasing demand for hotels smoke pipes anymore our...

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