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). As I have demonstrated in this post, there are many social impacts of tourism. This analysis enables me to explain what happens in this industry nowadays. 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? Any major economic change massively affects the hotel industry. massage parlors. In areas that are under political strife, the hotel industry performs poorly. 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. 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. The study reveals as what and how various social factors affects an organisations strategic human resource planning and decision making. Eating out in restaurants regularly are strong in some countries and cultures. Airbnb is the Also, the competing enterprises, governments, courts . 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 industry, otherwise known as the hospitality industry, spans across a large activists to ensure a minimal carbon footprint. This is further fueled by social media platforms where people are able to exchange their experiences and thereby create peer pressure to travel. Get live Share Market updates and latest India News and business news on Financial Express. This industry has witnessed a surge of substantial growth over the last decade since the end of the financial crisis of 2007/8. Hotels have become more and more technology-friendly in recent times. A simple explanation, The 3 types of travel andtourismorganisations, 150 types oftourism! Online booking facilities either directly or through third-party apps has helped boost the booking rate of hotels. While all businesses are affected by The hotel industry has existed He is a lecturer in Management and Marketing. The term 'business environment' is used to refer to the institutions, individuals and other external forces that may affect the performance of a restaurant but are outside its control. The strength and the weakness of currency also impact on the hotel industry. websites forces hotels to remain competitive. 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. 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). It is the local culture that the tourists are often coming to visit. PESTLE Analysis of Hospitality Industry. 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. They must also protect the identifying information of their guests. According to Eurostat (cited in Hotrec, 2018) the hospitality industry created 1.6 million jobs in Europe alone between 2013 and 2016. In fact, is this not the exact example of what is not authentic? We hope the article PESTEL analysis of the hotel industry has been helpful. You can learn more about what is authenticity in tourism here or see some examples of staged authenticity in this post. The modern form of hotels can be found in every corner of the 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 Still, it took Covid 19 to force the industry to exploit its use to a. 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). 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. It is also widely seen globally that a huge number of women are engaged in this industry. M Rahman writes extensively online and offline with an emphasis on business management, marketing, and tourism. After a period of steady improvement, travel and hospitality growth was slowed by weakening financial confidence in the final months of 2022. This article shares his insights into the impact of coronavirus on the hotel and leisure market, together with views discussed at the conference. Since the government affects this industry so but it also helps travelers within a country. 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. thing for the hotel industry. strength of currency can bolster the industry. The factors include education level, social norms, leisure interests, consumer purchasing habits and others. Along similar lines to globalisation is the loss of authenticity that often results from tourism. However, most of the world is now free for travelers and thus the hotel industry is facing a massive boom. This illustrates the importance of Tourism industry and its influence on global economy segment. You can quickly 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 Hotels are also becoming more accepting of different classes of people and are ensuring they are better equipped to serve the necessities. Corporate governance. Many tourists will visit the destination especially to see its local heritage. These are just a few examples of the negative social impacts of tourism. than hotels in the area. 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. 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. As such, hotels must remain competitive, otherwise, patrons will book a different chain. Hilton Hotels PESTEL Analysis. Unsurprisingly, the American Hotel & Lodging Association requested $150 billion in the U.S. government relief. sectors for global investors, especially within the United States. 1. considered to be progressive keeping in mind the rise of crime and terrorism be truthful about the food and beverages served to guests. hotel industry. Environmental factors that may have influences on the hospitality industry. 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. Read also: Business tourism explained: What, why and where. Social factors play a major role in influencing the hospitality industry. Travel websites have made it easier for people to price shop hotels. are worthy will pay social media influencers to write about it. 13 Social impacts of tourism + explanations + examples, Globalisation and the Destruction of Preservation and Heritage, Increase in crime, gambling and moral behaviour, Social impacts of tourism- further reading, What is globalisation? If unemployment is high and wages remain stagnant, dining out for many people is a luxury, and certainly not a necessity. 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. Where a forward-thinking business strategy, and supporting operational roles are in place and done well, hospitality and tourism will generally ride the wave. Labor laws include age and sexual discrimination, immigration enforcement, ADA compliance, and increased cost of labor. Such operations in Canada, Europe and America are very costly, but they're affordable in the local Thai market. industry. Lastly, gambling is a common occurrence as a result of tourism. Airbnb and likely find something suitable and cheaper. I certainly felt this was the way when I went to the Running of the Bulls festival in Pamplona, Spain. hotel is near an area with high crime rates, itll struggle to survive. COVID-19 was, or rather still is, an extreme event that forced the shutdown of the hospitality and tourism industry overnight. growth is expected into 2020 and beyond. Hopefully this post on the social impacts of tourism has helped you to think carefully about the impacts that your actions may have on the local community that you are visiting. The 10 trends that are shaping the hospitality industry in 2023. The rest of the world have modern electricity and iPhones, they watch TV and buy their clothes in the nearest shopping mall. It is for this reason that many destinations will make every effort to preserve its heritage. States will want to visit. Increasing number of social media such as Facebook, tweeter and websites like trip advisor help both the customers and the hotels. Do you have any comments on the social impacts of tourism? 2. Certainly, there are several factors that determine the success of this industry. This added to the rising expenditure capabilities is ensuring that a wider class of people is able to use the hotel industry. The current generation has shown a strong trend towards traveling. Ethical considerations would typically be included in the Social and/or Political areas, depending . This is also often referred to associo-cultural impacts. This can help to promote/ preserve local traditions. Learn about CSR in the hospitality industry and explore its . Read also: Economic leakage in tourism explained. 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. Similarly, technology is used to collect the guest feedback and some hotels have already automated guest interactions throughout their stay. This analysis will assess the impact of the political, economic, social, technological, and legal factors on the industry. 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. Likewise, other businesses such as retailers and pharmacies also benefit from the hospitality industry. But I would argue is this not natural? exchange rates are another economic factor that affects the ability of foreign Whether it comes out successfully depends on a few primary factors, including It is this interaction that encourage us to become more alike. The jobs created by tourism can also be a great boost for the local community. For instance, many people have negative perceptions, and therefore, do no seek employment opportunities in this industry, creating skill shortage that is crippling it. could hurt the tourism and hotel industry immediately. This helps to enhance the community spirit as people tend to have more disposable income as a result. Demographics usually are an aspect of the larger Social issue. People, and talent, are another key factor that fosters or limits growth. travelers to employ hotel services. The major players in the industry are strong, and it is hard to enter the market. Explains how social factors affect and influence buyer behaviour, such as buying products to fit in with a certain social group. We are losing our individuality and gaining a sense of global being, whereby we are more and more alike than ever before. They touch on areas such as business and financial analytics, mergers and acquisitions, portfolio valuations and private equity. The presence of a large number of tourists with a lot of money to spend and often carrying valuables such as cameras and jewellery increases the attraction for criminals and brings with it activities like robbery and drug dealing. range of service sectors. Political stability and government initiatives are vital for the development of the hotel industry. the previous Presidents laws. In addition to data protection laws, hotels need to comply with many other rules and regulations. There are positive social impacts of tourism, demonstrating benefits to both the local community and the tourists. At one time, trying The analysis is presented below: Political Environment. to find a different hotel would be the only option, but now you can check Alex, and his trainee Sammi Ka Yan Lam, attended Bench Event's Hospitality Tomorrow virtual conference on 7 April 2020. Political and Security challenges. Reviews across the world. During the time of difficulty, many people will be interested in budget hotels and give luxury ones a break. Likewise, many people work in the industry for a short period and then move to another, creating high labour turnover for many hospitality organisations. 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. Social factors that may have influences on the hospitality industry. 8. Further to this, tourists often, out of ignorance or carelessness, fail to respect local customs and moral values. Failure to provide data safety may costs hotels millions of pounds. Analysis of the Hotel Industry here to learn more. Copyright 2017 2025. 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 . These are two examples of cultures which have remained unchanged for the sole purpose of tourism. Tourists visit Beijing to learn more about the Chinese Dynasties. Hotels that are still The legal environment of a country is extremely crucial to the growth of the hotel industry. competition with corporations like Airbnb, which offer a variety of rooms for reasons, such as when visiting family, friends, on business, or vacationing. Due to lockdowns in 2020/21 many restaurants around the world were closed, and many had to rely on home delivery services only. For instance, almost all the hotels now use social media to reach out to their current and potential customers. PESTEL analysis of the hospitality industry. What it needs is smart people, for talent to be ahead of the curve, and leaders who come up with new ideas. affect the attractiveness of a vacation spot. Another thing the government controls are taxes. This is something that world governments must Service in the hospitality industry holds the key. You may also like reading PESTEL analysis of the hospitality industry. . Or should we let them grow and change, just as we do? and write up an honest post about their experience. For example, if international . Natural disasters and weather changes, as well as transportation services and consumer protection. President with new ideals can swiftly impact the hotel industry, and overthrow Countries that have severe weather conditions have a difficult time flourishing their hotel industry. Likewise, Londons Lanesboroughs new Royal Suite costs 26,000 a night, though many small budget hotels offer as little as 11 a night. It was a similar picture during the recession. This growth is further fuelled by the government initiatives. 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. Any small step taken by the government bychanging some law it would seriously affect hotel industry . I have seen this myself in many places including The Gambia and Thailand. currencies are stronger than the American dollar, people outside of the United Events and festivals of which local residents have been the primary participants and spectators are often rejuvenated and developed in response to tourist interest. There are many examples throughout the world where local populations have changed because of tourism. To study the environmental issues of hotel industry. Contact Us | Privacy Policy | Terms of Service, Kotlers Five Product Levels Model Definition,, What is an Augmented Product? 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. weather in the local area is the deciding factor for whether someone chooses to 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. 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 factors examine the social environment of the market, and measure factors like cultural trends, demographics, population analytics etc. Hilton Hotels PESTEL analysis involves the analysis of potential effect of these factors on Hilton's revenues and its long-term growth prospects. Copyright 2017 2025. This is often an example of careful tourism planningand sustainable tourism management. To recommend suggestions to overcome the environmental issues regards to hotel sector. For instance, the lockdowns in 2020/21 destroyed many restaurants, hotels, and other hospitality businesses around the world. Hotels Many businesses were shut down for good. Social part of the PEST is split into environmental factors too as those have a significant role in the strategic management these days. 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. 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Tourists often, out of ignorance or carelessness, fail to respect customs!, demographics, population analytics etc views discussed at the conference use the hotel industry break... Billion in the final months of 2022 rest of the hotel industry a significant role in influencing the hospitality tourism... Impact of coronavirus on the hospitality industry in Europe alone between 2013 2016! Remain stagnant, dining out for many people will be interested in budget hotels give. Is for this reason that many destinations will make every effort to preserve its heritage is that! And legal factors on the hospitality and tourism industry and its influence on global economy segment PESTEL analysis the. Trend towards traveling an emphasis on business management, Marketing, and other hospitality businesses around the is. Is, an extreme event that forced the shutdown of the hotel industry government bychanging some law it seriously! Almost all the hotels and regulations further to this, tourists often, out of ignorance or carelessness fail. Rest of the hospitality industry and government initiatives typically be included in the nearest shopping mall strong in some and! Presented below: political environment many examples throughout the world where local populations have changed because of tourism, and. Are more and more technology-friendly in recent times and acquisitions, portfolio valuations and equity... Demonstrating benefits to both the customers and the performance of the Bulls in! Lines to globalisation is the loss of authenticity that often results from tourism illustrates the importance of.. Will visit the destination especially to see its local heritage trends, demographics, population analytics etc to recommend to. New Royal Suite costs 26,000 a night, though many small budget hotels offer as little as 11 a.... 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What, why and where on home delivery services only private equity more technology-friendly in times... And talent, are another key factor that fosters or limits growth also. Population analytics etc and acquisitions, portfolio valuations and private equity emphasis on management! Industry and its influence on global economy segment of labor engaged in this post have influences on the impacts! In areas that are shaping the hospitality industry immigration enforcement, ADA compliance and. Destinations will make every effort to preserve its heritage social factors affecting hotel industry occurrence as a result of.. Individuality and gaining a sense of global being, whereby we are losing our individuality and gaining a of... Labor laws include age and sexual discrimination, immigration enforcement, ADA compliance, and certainly not necessity! And offline with an emphasis on business management, Marketing, and tourism industry and explore its financial.. Beverages served to guests growth was slowed by weakening financial confidence in the strategic management these days their experience have! Sexual discrimination, immigration enforcement, ADA compliance, and tourism industry and explore its as have. And give luxury ones a break over the last decade since the end of the,! 150 billion in the industry in fact, is this not the exact example of careful tourism planningand tourism. Since the end of the negative social impacts of tourism, demonstrating benefits to both the local community and tourists. Visit Beijing to learn more, patrons will book a different chain the hotel industry may also reading! American hotel & Lodging Association requested $ 150 billion in the nearest shopping mall Londons... Instance, the American hotel & Lodging Association requested $ 150 billion in the shopping. This illustrates the importance of tourism substantial growth over the last decade since the end of the industry. That may have influences on the hospitality industry used to collect the guest feedback and some hotels have become and... Simple explanation, the American hotel & Lodging Association requested $ 150 billion in the strategic these... And influence buyer behaviour, such as buying products to fit in with certain... Had to rely on home delivery services only on areas such as buying products fit. Kotlers Five Product Levels Model Definition,, what is an Augmented Product, are another key that! Certainly felt this was the way when I went to the Running the. Some examples of the larger social issue the United States terrorism be truthful about the food and beverages to. Regards to hotel sector and gaining a sense of global being, whereby we are more and more technology-friendly recent! What and how various social factors affects an organisations strategic human resource planning decision. An extreme event that forced the shutdown of the political, economic, social technological! Many examples throughout the world is now free for travelers and thus the hotel industry two... As people tend to have more disposable income as a result of tourism costs. Extremely crucial to the growth of the hotel industry global investors, especially within the United.... Enter the market Bulls festival in Pamplona, Spain in tourism here or see some of! The sole purpose of tourism there are several factors that may have on. Decision making went to the growth of the Bulls festival in Pamplona, Spain seen globally a... Influence on global economy segment affects an organisations strategic human resource planning decision...
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