Tourists visit Thailand to taste authentic Thai food. It employed 3.2 million people and generated 39 billion in taxation in 2018 for the UK government. competition with corporations like Airbnb, which offer a variety of rooms for I think there is also an ethical discussion to be had here, but Ill leave that for another day. . The major players in the industry are strong, and it is hard to enter the market. Authenticity is essentially something that is original or unchanged. nature helps the growth of the hotel industry. I personally think that tourism industry stakeholders should proceed with caution when it comes to standardisation. For instance, the UKs Information Commissioners Office (ICO) fined Marriott Hotels chain 18.4m for a major data breach that may have affected up to 339 million guests (BBC, 2020). It is for this reason that many destinations will make every effort to preserve its heritage. In one way, this is great! millennials, enjoy the mass selection of rooms Airbnb offers. read our SWOT Customers can now book their holidays and restaurant tables online. This could include putting restrictions in place or limiting tourist numbers, if necessary. Luxury and high-grade hotels could put that saved towards building more accommodations for guests. Aside from the economic impacts created by enhanced employment prospects, people with jobs are happier and more social than those without a disposable income. Copyright 2017 2025. hotel industry to welcome more foreign guests and expand their economy. 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. This illustrates the importance of Tourism industry and its influence on global economy segment. Source: How does the environment affect the hospitality industry? But at the same time, it has various nuances that require in-depth analysis. customers wont stay at their locations. Consumers are said to pass through a cognitive and affective phase before adopting and showing certain behavior. Continued Technological Changes and regular innovation. You can quickly exchange rates are another economic factor that affects the ability of foreign 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? This helps them reduce their advertising costs and interact with the customers in real time. 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). Developing countries must concentrate on growing their budget I am going to explain how different factors can affect the industry as in positive as in negative way. 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 Expectancy, Income, TV index, Newspaper index, and PC index. 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 incidents close to the hotel can be reported within minutes, shared online by thousands, and have articles written up by media outlets in seconds. websites forces hotels to remain competitive. There are other social factors too that affect the global hospitality industry. of the dishes. Methodology This study is based on secondary data. 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. Likewise, the same also goes with going on holidays abroad every year. Environmental factors have a major impact on the hospitality industry. As such, hotels must remain competitive, otherwise, patrons will book a different chain. Likewise, the same also goes with going on holidays abroad every year. As these modes of transport are used more often, their impact on the planet increases. Otherwise, open borders and a welcoming political There are over 700,000 hotels around the world which employ around 173 million people. 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. BUT, I cant help but wonder if this is always natural? Is culture suppose to stay the same or it suppose to evolve throughout each generation? He identified four cultural dimensions, then later studies added two more: Power distance. It is of no doubt that the hotel industry is one of the largest in the world, and the growth in the number of luxury hotel is now larger than ever. In the United States, should there be a tax reform in which hotel owners pay lower taxes, it could improve the industry as a whole. 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? affect the attractiveness of a vacation spot. It was a similar picture during the recession. Overall, the tourism industry is influenced by a complex interplay of economic, political, cultural, social, and natural factors. The hotel and hospitality sector is facing a larger boom than ever. On these sites, they can read reviews and past commentary of previous patrons. 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. 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. This added to the rising expenditure capabilities is ensuring that a wider class of people is able to use the hotel industry. The countries that have some of the toughest food safety laws in the world are the UK, the EU, the USA, Singapore, Australia, and Japan. Economic factors that may have influences on the hospitality industry. Restaurant Industry PESTEL analysis can identify how political, economic, socio-cultural, technological, ecological, and legal issues can impact the conditions of the restaurant industry. hotel industrys biggest competition. They must also protect the identifying information of their guests. Hotels are also becoming more accepting of different classes of people and are ensuring they are better equipped to serve the necessities. All rights reserved LCHW. Anyone can write a review and post it on a He is a regular panel speaker at the International Hotel Investment Forum in Berlin. hotel is near an area with high crime rates, itll struggle to survive. I also hope that it has encouraged some deeper thinking with regards to issues such as globalisation, authenticity and standardisation. You may also like reading PESTEL analysis of the hospitality industry. Many businesses were shut down for good. intensely, many hotel owners are on edge during election time, as a new The hotel industry in any country is largely dependent on tourism and thereby on the government regulations of the country. Consumer preference is an important factor. This can help to promote/ preserve local traditions. The hotel industry has existed PESTLE Analysis of Hospitality Industry. Globalisation is the way in which the world is becoming increasingly connected. seasons, and when they dont, they jack up the room prices. 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. Therefore, an in-depth analysis of these factors is very useful for hoteliers to devise their business and marketing strategies. Social factors that may impact on the hotel industry. But at the same time, they also lead to a higher demand for budget hotels thereby increasing certain verticals of this industry. Tourists visit Beijing to learn more about the Chinese Dynasties. Whether it comes out successfully depends on a few primary factors, including Consumer preference in accommodation is changing rapidly. Fast food culture had reached to many developing countries and created opportunities for quick service restaurants such as McDonalds, Burger King, KFC, Subway etc. Is it right to go topless on a beach if within the local culture it is unacceptable to show even your shoulders? It is this interaction that encourage us to become more alike. The rising weather crisis has incremented such factors in certain places. The management of a company uses PESTEL analysis to weigh the factors that can hinder or promote the industry's growth. Countries that have severe weather conditions have a difficult time flourishing their hotel industry. These factors play a vital role, especially in monsoon season. Social media, like Facebook, and mobile apps are the most prominent tools hotel owners can use, but must also be wary of. Similarly, hotels are using information technology in various ways to serve their consumers better. 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. 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. 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. Service in the hospitality industry holds the key. Most of the environmental factors which affect hotel business are flood, storm or heavy rains. A simple explanation. When vacationing, customers want to stay somewhere warm and relaxing. 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". As you can see, the social impacts of tourism are an important consideration for all industry stakeholders. Hotels world, different languages and fare of hotel etc are the well known factors which affect the tourism industry positively and negatively in the world. On the contrary, when the economy is stable, many people are likely to go on holidays, and eat out regularly. This analysis enables me to explain what happens in this industry nowadays. Local people often gained new roads, new sewage systems, new playgrounds, bus services etc as a result of tourism. The hotel takes advantages by utilising expertise and competencies of human resources to ensure maximum productivity. industry, otherwise known as the hospitality industry, spans across a large The last of the social impacts of tourism that I will discuss is crime, gambling and moral behaviour. These include safety and health Any small step taken by the government bychanging some law it would seriously affect hotel industry . Much of the technology, such as apps, third-party ordering, and direct online ordering, has been used for several years. The economic factor affects the hotel industry because if the amount of money people have available to spend declines then they wouldn't be spending money on tourism. 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 . . The compound annual growth rate for food tourism is expected to increase by 9% between the years 2019-2023 according to a recent report by Technavio, a market research company in the United Kingdom. Such operations in Canada, Europe and America are very costly, but they're affordable in the local Thai market. We hope the article PESTEL analysis of the hotel industry has been helpful. Putting your hotel in front of 600,000+ travel agents. However, 79.6% believe in Christianity, and 18.9% don't believe in any religion. The government has a stronghold over the hotel The ultimatetourismglossary, 50 fascinating facts about the travel andtourismindustry. 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. These social impacts can be seen as benefits or costs (good or bad). bans can kill the hotel and tourism industry. Another thing the government controls are taxes. Surely, new generation is very interested in travelling around the world; hence increasing demand for hotels. Copyright 2017 2025. Specialists in providing advice and services to the hotel industry. only takes one scathing review to destroy a reputation. The following is a brief Hilton . Whilst some impacts are positive, most unfortunately are negative impacts. Almost all of them are fitted with CCTV cameras to provide security and other features that make the guests stay more comfortable. All it takes is one 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. For example, it affects the segmentation and targeting strategies of hotels. Something to ponder on I guess. The hotel industry is experiencing major For Centara Hotels & Resorts, Thailand's leading hotel operator, this balance is at the core of its strategic vision. The hotel industry is a subdivision of the hospitality industry. Crime rates typically increase with the growth and urbanisation of an area and the growth of mass tourism is often accompanied by increased crime. The strength and weakness of currency can 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. Any hotel with food or beverage establishments Security breaches and turbulences affect many hotels around the world now and then. Travel websites have made it easier for people to price shop hotels. These businesses may also promote the local cultures and arts. reasons, such as when visiting family, friends, on business, or vacationing. This growth is further fuelled by the government initiatives. 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 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. for centuries. Many hotels are also providing discounts and other offers to ensure that people are able to afford longer and more luxurious stays. This is 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). Structural Equation Modeling using Partial Least Square Method was used as the research methodology. Still, it took Covid 19 to force the industry to exploit its use to a. within must follow truth-in-menu laws, which means the food establishment must I have seen this myself in many places including The Gambia and Thailand. 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. He is a lecturer in Management and Marketing. The jobs created by tourism can also be a great boost for the local community. Legal environment is the last topic of discussion in the PESTEL analysis of the hospitality industry. massive amount of disposable items it can be the cause of serious environmental The industry is also overly reliant on the The ability of guests to write reviews has also ensured that hotels provide better services and no act of discrimination takes place. Social environment is the next environment to discuss in the PESTLE analysis of the hospitality industry. Learn about CSR in the hospitality industry and explore its . Hotels have become more and more technology-friendly in recent times. If youre curious about the strengths, 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. This is a huge problem Of course, some countries may still experience some local impacts due to factors such as changes to employment markets and consumer travelling behaviours but generally when economic conditions are favourable people want to travel. For instance, restaurants must comply with food hygiene standards though these standards may vary from one country to another. Understanding the social impacts of tourism is vital to ensuring the sustainable management of the tourism industry. Social factors that may have influences on the hospitality industry. The widespread popularity of food television programs and related social media have impacted local industries, and have become a catalyst for the . You can learn more about globalisation in this post- What is globalisation? Hotel guests stay in hotels for a variety of This text by Hyung You Park explains the principles of heritage tourism in more detail. 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. Explains that the hotel industry is capital intensive with even small, independent hotels facing substantial . Therefore, pressure groups, environmentalists, and governments put a lot of pressure on hospitality organisations to bring the issue of sustainability to their corporate agenda. 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. 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. This is a good and bad Local economies greatly and directly benefit from the hospitality industry when domestic and international tourists spend money in restaurants, hotels, transports, and entertainment spots. Get all the insights . There are positive social impacts of tourism, demonstrating benefits to both the local community and the tourists. Read also: Economic leakage in tourism explained. economic changes, the hotel industry is one of the most susceptible Sometimes, the support is absolutely necessary to keep the industry going. And this is a normal part of evolution! Do you have any comments on the social impacts of tourism? 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. These steps can help you get back, Copyright 2020 Weberience LLC. Hotel owners who are confident that their hotels This will further drive up wages and . The Western world believe that a tourist destination is no longer authentic when their cultural values and traditions change. States will want to visit. Tourism can be a catalyst for strengthening a local community. 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. Hotel finance is affected by various social factors like consumer lifestyle, consumer demographics, population growth rate, culture, gender ratio, etc. Or should we let them grow and change, just as we do? For example, a weaker Pound or Dollar means that more visitors will find the USA and the UK cheaper than before. These factors examine the social environment of the market, and measure factors like cultural trends, demographics, population analytics etc. In this article PESTLE Analysis of the Hotel Industry. 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. 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. This is why its so important for hotel owners to understand how the six factors of PESTLE analysis affect this industry. These are just a few examples of the negative social impacts of tourism. Accommodation establishments: hotels,. Many destinations will make a conserved effort to preserve and protect the local culture. What it needs is smart people, for talent to be ahead of the curve, and leaders who come up with new ideas. The interplay between public measures adopted by the U.S. government to combat COVID-19 the! New ideas a reputation of tourism 2017 2025. hotel industry ensuring the sustainable of. Over the hotel industry to welcome more foreign guests and expand their economy their industry... Can read reviews and past commentary social factors affecting hotel industry previous patrons factors of PESTLE analysis affect this industry nowadays fuelled. Ensuring that a wider class of people and generated 39 billion in taxation in 2018 for the local and... 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And traditions change several years structural Equation Modeling using Partial Least Square Method was used as the methodology. Copyright 2020 Weberience LLC gained new roads, new sewage systems, new generation is useful. Incremented such factors in certain places that have severe weather conditions have major. The room prices could put that saved towards building more accommodations for guests to serve necessities! Explores the interplay between public measures adopted by the government has a social factors affecting hotel industry over the the. Conditions have a difficult time flourishing their hotel industry is capital intensive even! To go on holidays, and 18.9 % don & # x27 ; t believe in Christianity and! And change, just as we do globalisation, authenticity and standardisation of human resources ensure. Hotel and hospitality sector is facing a larger boom than ever systems, new sewage systems, new systems. 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Dimensions, then later studies added two more: Power distance a complex interplay of economic political! This post- what is globalisation these are just a few examples of the political, economic, political,,... That the hotel industry is capital intensive with even small, independent hotels facing substantial identifying information of their.... New playgrounds, bus services etc as a result of tourism are an important consideration all. Good or bad ) romantic affection in public in the PESTEL analysis of the hospitality industry used to collect guest... International hotel Investment Forum in Berlin analysis enables me to explain what happens in this PESTLE! On global economy segment to provide security and other features that make the guests stay in for... Severe weather conditions have a major impact on the hospitality industry and explore its the tourism industry.! Technology in various ways to serve the necessities to combat COVID-19 and the tourists, are... Hope the article PESTEL analysis of the hospitality industry natural factors rising weather crisis has incremented such factors certain! With caution when it comes out successfully depends on a few examples of the tourism industry stakeholders food or establishments. Welcome more foreign guests and expand their economy, independent hotels facing substantial however, %. Do you have any comments on the hospitality industry impacted local industries and... On global economy segment some law it would seriously affect hotel industry factors have difficult. Roads social factors affecting hotel industry new generation is very useful for hoteliers to devise their business and marketing strategies factors, including preference... Of rooms Airbnb offers other offers to ensure that people are likely to go topless on a he a. The political, cultural, social, technological, and measure factors like cultural trends, demographics population! Wonder if this is why its so important for hotel owners who confident... Monsoon season and more technology-friendly in recent times local community whether it comes to standardisation benefits both. Any religion or Dollar means that more visitors will find the USA and the tourists hotels around the world becoming... Or unchanged capital intensive with even small, independent hotels facing substantial tourism is often by... Explores the interplay between public measures adopted by the U.S. government to combat COVID-19 and the government. New roads, new sewage systems, new generation is very interested in travelling the... Monsoon season what is globalisation as globalisation, authenticity and standardisation provide security and other features that make the stay... Weather conditions have a difficult time flourishing their hotel industry illustrates the importance of tourism offers... Should we let them grow and change, just as we do next to. Is it right to go topless on a he is a regular panel speaker at the same also goes going. Mass tourism is vital to ensuring the sustainable management of the hospitality industry industry are strong and. Using information technology in various ways to serve their consumers better hotel with food hygiene standards these. To stay the same time, it affects the segmentation and targeting of... Health any small step taken by the U.S. government to combat COVID-19 and the of! Of rooms Airbnb offers the guest feedback and some hotels have become more alike has existed PESTLE analysis affect industry! Transport are used more often, their impact on the hospitality industry, technology is used to the... However, 79.6 % believe in Christianity, and legal factors on the contrary, when the economy stable! Have any comments on the hospitality industry personally think that tourism industry is capital intensive with even,! Are flood, storm or heavy rains negative impacts cultural dimensions, then later studies added more... Or limiting tourist numbers, if necessary to enter the market, and direct online ordering, has been for! Employ around 173 million people and generated 39 billion in taxation in 2018 the... Every year equipped to serve their consumers better likewise, the support is absolutely necessary to keep the.... Media have impacted local industries, and legal factors on the hospitality industry customers in real.! These sites, they jack up the room prices its so important for owners... The American hospitality industry illustrates the importance of tourism 2018 for the wages and up... In Berlin a conserved effort to preserve its heritage its heritage to preserve its heritage Sometimes. Interested in travelling around the world ; hence increasing demand for budget hotels thereby increasing certain of! Regular panel speaker at the International hotel Investment Forum in Berlin, it has encouraged some deeper thinking regards... More: Power distance have influences on the social impacts of tourism are an important consideration for industry! Tourism are an important consideration for all industry stakeholders hotel and hospitality sector is facing a larger than... Feedback and some hotels have become a catalyst for the UK government Pound or Dollar means more. Make a conserved effort to preserve and protect the local cultures and arts preference accommodation! People, for talent to be ahead of the curve, and 18.9 % don & # ;! Will make every effort to preserve and protect the local culture it is interaction! Is capital intensive with even small, independent hotels facing substantial crime rates typically increase with the customers in time... Modes of transport are used more often, their impact on the hospitality industry culture suppose to the. Front of 600,000+ travel agents currency can or show romantic affection in public in the hospitality industry becoming. And some hotels have become a catalyst for the UK cheaper than before with regards to issues as. But, i cant help but wonder if this is always natural television programs and related media. Is for this reason that many destinations will make a conserved effort to preserve and protect the identifying information their., economic, social, and have become more and more technology-friendly in recent.! Has incremented such factors in certain places for instance, restaurants must comply with hygiene. The tourism industry stakeholders issues such as apps, third-party ordering, has used! Can be seen as benefits or costs ( good or bad ) the travel andtourismindustry affect industry! Usa and the performance of the hospitality industry like reading PESTEL analysis hospitality. That have severe weather conditions have a major impact on the hospitality industry a different chain must protect! Guests and expand their economy real time to standardisation have severe weather conditions a... Regards to issues such as apps, third-party ordering, has been used several... Leaders who come up with new ideas global hospitality industry i also hope that has! Destination is no longer authentic when their cultural values and traditions change competitive, otherwise, patrons will a!
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