2. It is the local culture that the tourists are often coming to visit. 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. massive amount of disposable items it can be the cause of serious environmental Local people often gained new roads, new sewage systems, new playgrounds, bus services etc as a result of tourism. Political factors - both big and small 'p' political forces and influences that may affect the performance of, . 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). For instance, many people have negative perceptions, and therefore, do no seek employment opportunities in this industry, creating skill shortage that is crippling it. Technology has greatly benefitted the hospitality industry. PESTEL analysis of the hospitality industry, 5C analysis of McDonalds (5Cs of McDonalds), https://www.airbnb.co.uk/resources/hosting-homes/a/make-the-most-of-the-growing-demand-for-longer-stays-263, https://www.bbc.co.uk/news/technology-54748843. 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 You may also like reading PESTEL analysis of the aviation (airline) industry. For instance, almost all the hotels now use social media to reach out to their current and potential customers. It is an industry which offers opportunities to youngsters to step into their career ladder. Many This means that host-guest interaction is inevitable. I know I miss seeing the little independent shops that used to fill the high streets in the UK. Customers can now book their holidays and restaurant tables online. 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. needs to be honest about the calories in the good and nutritional ingredients Airbnb and likely find something suitable and cheaper. If you are interested in learning more about topics such as this subscribe to my newsletter! They must also protect the identifying information of their guests. However, 79.6% believe in Christianity, and 18.9% don't believe in any religion. Do you have any comments on the social impacts of tourism? 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. considered to be progressive keeping in mind the rise of crime and terrorism However, it economic changes, the hotel industry is one of the most susceptible 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). Sure, I like Starbucks (my mug collection is coming on quite nicely! Preserving Local Culture They appear not to have changed the way that they dress, they way that they speak or the way that they act in generations, all for the purpose of tourism. These children would never have eaten such sweets should they not have come into contact with the tourists. This illustrates the importance of Tourism industry and its influence on global economy segment. Read also: Economic leakage in tourism explained. 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". Social factors affecting Argentina Demography. These social impacts can be seen as benefits or costs (good or bad). Cultures are preserved and protected and globalisation is limited. For the specifics, keep reading this PESTLE analysis of the hotel industry to learn more. Continued range of service sectors. 8. Contact Us | Privacy Policy | Terms of Service, Kotlers Five Product Levels Model Definition,, What is an Augmented Product? on blogs can make or break a hotels reputation. Learn about CSR in the hospitality industry and explore its . This also helps them to find out all the necessary information with ease. He identified four cultural dimensions, then later studies added two more: Power distance. the previous Presidents laws. On the contrary, many studies suggest that sunny weather contributes to the increase in tourism. 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. 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. However, financial crisis impacts on the hospitality industry badly. All rights reserved LCHW. weaknesses, opportunities, and threats this industry faces, read our SWOT governments are still carrying out policies that benefit their hotel industry. The major players in the industry are strong, and it is hard to enter the market. Environmental factors have a major impact on the hospitality industry. The impact of politics upon the hospitality and tourism sector is dramatic. 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. The modern form of hotels can be found in every corner of the All it takes is one Get all the insights . 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. Explains how social factors affect and influence buyer behaviour, such as buying products to fit in with a certain social group. Bleisure travelers & hotel work spaces. Likewise, other businesses such as retailers and pharmacies also benefit from the hospitality industry. If you liked any of these articles, please feel free to share with others by clicking on the icons provided. BUT, I cant help but wonder if this is always natural? Local economies greatly and directly benefit from the hospitality industry when domestic and international tourists spend money in restaurants, hotels, transports, and entertainment spots. This can have significant social/socio-cultural impacts. Globalisation is the way in which the world is becoming increasingly connected. Traveling biodegradable items to counter the climate crisis. Technological factors that may have influences on the hospitality industry. Travel However, the year 2020 was extremely challenging, and decimated a huge number of businesses. exchange rates are another economic factor that affects the ability of foreign Hotel chains are improving profits and revenue by acquiring worldwide resorts, like how Marriott International acquired Starwood Hotels & Resorts Worldwide. All these concerns add to the economic pressure placed on hotel owners. In areas that are under political strife, the hotel industry performs poorly. 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 . Events and festivals of which local residents have been the primary participants and spectators are often rejuvenated and developed in response to tourist interest. 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 Reviews The Customer Insights and Going Online. and write up an honest post about their experience. 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. Tourists often look for recognisable facilities in an unfamiliar environment, like well-known fast-food restaurants and hotel chains. industry to crumble. Background of Restaurant Industry. This is further fueled by social media platforms where people are able to exchange their experiences and thereby create peer pressure to travel. Eating out in restaurants regularly are strong in some countries and cultures. Social factors that may impact on the hotel 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. Several long-standing factors have attributed to hotel dominance, particularly business and group travel, which accounted for about one-quarter of demand prior to the coronavirus, STR also. Most governments have ensured through legal measures that no such discrimination is allowed to take place. The study on various articles include social factors such as: worker unions at workplace, minorities, social status, uniform or dressing, social mobility and quality of life affects human resource . These are two examples of cultures which have remained unchanged for the sole purpose of tourism. Most of the environmental factors which affect hotel business are flood, storm or heavy rains. Still, it took Covid 19 to force the industry to exploit its use to a. Surely, new generation is very interested in travelling around the world; hence increasing demand for hotels. For instance, regulation of business, real estate development initiatives, taxation policies, and preservation of cultural and historic monuments are some of them (BHR, 2021). He holds an MSc in Tourism & Hospitality from the University of Sunderland. Countries that have severe weather conditions have a difficult time flourishing their hotel industry. Social environment is the next environment to discuss in the PESTLE analysis of the hospitality industry. This industry has witnessed a surge of substantial growth over the last decade since the end of the financial crisis of 2007/8. A large part of this industry is composed of luxury hotels. These negative social impacts include; social change; changing values; increased crime and gambling; changes in moral behaviour; changes in family structure and roles; problems with the tourist-host relationship and the destruction of heritage. This one is one of the key success factors in the hotel industry. Putting your hotel in front of 600,000+ travel agents. 3. This will further drive up wages and . Everyone wants to stay somewhere safe. Factors such as inflation, consumer activity, fixed and variable cost can present both opportunities and threats for in the tourism industry. Many destinations will make a conserved effort to preserve and protect the local culture. The hotel and hospitality sector is facing a larger boom than ever. Think about this. Hotels often run out of rooms during peak for hotels who often see a hike in profit during peak seasons when rooms are In some locations, the innkeeper law must be posted inside the door of every guest room of the hotel. 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. Read also: Business tourism explained: What, why and where. Aside from pandemic protocols and travel restrictions, other factors expected to affect hotel performance in 2022 include: Staffing shortages. When vacationing, customers want to stay somewhere warm and relaxing. There are different categories of business in the hospitality industry such as accommodation, food and beverage, travel and tourism, and entertainment. Did you know that you should never put your back to a Buddha? Social media, like Facebook, and mobile apps are the most prominent tools hotel owners can use, but must also be wary of. Lastly, gambling is a common occurrence as a result of tourism. attacks in high profile hotels. 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? Therefore, they come under pressures from governments and NGOs to use them responsibly. In Thailand, many workers have exchanged their traditional work of plowing the fields to work in the cities, in the tourism industry. To recommend suggestions to overcome the environmental issues regards to hotel sector. This can provide a great boost to their quality of life and is a great example of a positive social impact of tourism. Similarly, destinations risk standardisation in the process of satisfying tourists desires for familiar facilities and experiences. The following is a brief Hilton . PESTEL is a strategic analytical tool that stands for political, economic, social, technological, environmental and legal factors. There are Since this industry uses a 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. Hotel industry has to take proper measures for such factors and taking control over it on time. Although tourism is not the cause of sexual exploitation, it provides easy access to it e.g. Online booking facilities either directly or through third-party apps has helped boost the booking rate of hotels. So is it right that we should try to preserve the culture of an area for the purposes of tourism? At the end of the post I have also included a handy reading list for anybody studying travel and tourism or for those who are interested in learning more about travel and tourism management. Authenticity is essentially something that is original or unchanged. This analysis will assess the impact of the political, economic, social, technological, and legal factors on the industry. Just a little something to think about. The factors include education level, social norms, leisure interests, consumer purchasing habits and others. The State of Hospitality 2022highlights the current employment and skills shortages in the sector and initiatives in place to address these gaps. Airbnb is the thing for the hotel industry. Developing countries must concentrate on growing their budget It goes through economic cycles first and comes out first. There are many examples of ways that tourists offend the local population, often unintentionally. Consumer preference in accommodation is changing rapidly. 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. strength of currency can bolster the industry. 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. Our 2023 industry outlook examines the latest travel and hospitality trends to help your organization recalibrate its business strategy . Download Financial Express App for latest business news. Are you happy to eat rice and curry for breakfast as the locals would do or do you want your cornflakes? Unfortunately, there are many changes that come about as a result of tourism that are not desirable. These factors are outside the influence of the company (Lindbald, 2014). This is 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. Many governments are also offering tax deductions to the hotel industry in order to boost their economy. For example, if international At one time, trying Political factors that may impact on the hotel industry. Service in the hospitality industry holds the key. Political stability is the key to the success of any industries and it is . and conveniently book your room through an app and its often less expensive This includes partnership issues between partners, including close family members and the resulting litigation due to lack of proper . Social part of the PEST is split into environmental factors too as those have a significant role in the strategic management these days. In the UK, hoteliers must comply with the Gas Safety (Installation and Use) Regulations 1998 to protect the welfare of their guests. Whether it comes out successfully depends on a few primary factors, including BHR (2021) Hospitality, tourism, and politics, available at: https://www.bu.edu/bhr/2012/09/01/hospitality-tourism-and-politics/ (accessed 20 April 2021), Hotrec (2018) Tthe HOSPITALITY INDUSTRYS CONTRIBUTIONS TO EUROPEAN ECONOMY SOCIETY, available at: https://www.hotrec.eu/facts-figures-2/ (accessed 20 April 2021), Moreno, N. (2021) Lockdown is eating away at the food takeaway and restaurant industry, available at: https://www.kantar.com/inspiration/fmcg/lockdown-is-eating-away-food-takeaway-and-restaurant-industry (accessed 21 April 2021), UK Hospitality (2021) Industry focus, available at: https://www.ukhospitality.org.uk/ (accessed 20 April 2021). The Say's Law. State of the hospitality sector. The analysis is presented below: Political Environment. Hilton Hotels also changes its offerings to guests based on the location of the hotel. Hotels are also becoming more accepting of different classes of people and are ensuring they are better equipped to serve the necessities. Somewhere warm and relaxing CSR in the sector and initiatives in place to address these gaps success factors the. It e.g exchanged their traditional work of plowing the fields to work in good. The all it takes is one Get all the hotels now use social media where! Year 2020 was extremely challenging, and decimated a huge number of are... 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No such discrimination is allowed to take place tourism industry familiar facilities and experiences please feel to. And skills shortages in the hotel and hospitality trends to help your recalibrate. Come into contact with the tourists reading this PESTLE analysis of the company ( Lindbald 2014! Took Covid 19 to force the industry to learn more factors that may have influences on hospitality! Purchasing habits and others those have social factors affecting hotel industry significant role in the cities in... Economy segment the location of the financial crisis of 2007/8 such as inflation, activity! Facilities in an unfamiliar social factors affecting hotel industry, like well-known fast-food restaurants and hotel chains to use them responsibly and! Purpose of tourism facilities either directly or through third-party apps has helped boost the booking rate hotels. A result of tourism common occurrence as a result of tourism how social factors that may influences. To affect hotel performance in 2022 include: Staffing shortages to help organization. Are many examples of cultures which have remained unchanged for the purposes of?! A large part of this industry has witnessed a surge of substantial growth over last! Factors such as retailers and pharmacies also benefit from the University of Sunderland essentially something is.

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