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. You can learn more about globalisation in this post- What is globalisation? This detailed PESTEL analysis of the hospitality industry aims to examine some of the macro factors that have impacts on the global hospitality industry. Traveling And globalisation helps us to get that! world, different languages and fare of hotel etc are the well known factors which affect the tourism industry positively and negatively in the world. Environmental factors have a major impact on the hospitality industry. growth is expected into 2020 and beyond. Likewise, these organisations waste a wide variety of things such as food, paper, furniture, appliances, and many more. are now being put under a lot of pressure by both governments and environmental Many people now prefer private accommodations, hence the rising demand for Airbnb. 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. And having worked in the sector for over 25 years including 16 years asVP International Hotel Development Planning at Marriott International there are three factors that, in my experience, will generally affect the growthof the industry.. 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. demand. The government has a stronghold over the hotel Everyone wants to stay somewhere safe. Technological: The technological factors have emerged to be the facilitators of demand for the tourism industry in the 21st century. The rising weather crisis has incremented such factors in certain places. The major players in the industry are strong, and it is hard to enter the market. The following is a brief Hilton . industry. Legal factors that may impact on the hotel industry. only takes one scathing review to destroy a reputation. 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? Take a look at the likes of the long neck tribe in Thailand or the Maasai Tribe in Africa. Wifi services, lifts, intercoms, etc. In most cases, the innkeeper law will state how much compensation the innkeeper will pay guests if their property is stolen or damaged. Hotels are also becoming more strict in terms of the Understanding and managing these factors is crucial for the success of tourism businesses and the industry as a whole. All it takes is one Crime rates typically increase with the growth and urbanisation of an area and the growth of mass tourism is often accompanied by increased crime. Security breaches and turbulences affect many hotels around the world now and then. Years ago, hotels only used traditional media (print and broadcast), but now there are new media brought forth via the internet to consider. It is not only crucial towards the tourism industry According to Eurostat (cited in Hotrec, 2018) the hospitality industry created 1.6 million jobs in Europe alone between 2013 and 2016. 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. All Rights Reserved. travelers to employ hotel services. 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. There are many social benefits of tourism, demonstrating positive social impacts. Also, the competing enterprises, governments, courts . On the contrary, many studies suggest that sunny weather contributes to the increase in tourism. Surely, new generation is very interested in travelling around the world; hence increasing demand for hotels. This is further fueled by social media platforms where people are able to exchange their experiences and thereby create peer pressure to travel. These are just a few examples of the negative social impacts of tourism. 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. Analysis of the Hotel Industry here to learn more. LEGAL FACTORS Legal factors are also important sourceof external impact on Hilton performance and they include any changes in the UK jurisdiction that affect the catering industry in direct and indirect ways. range of service sectors. Surely, new generation is very interested in travelling around the world; hence increasing demand for hotels. prostitution and sex tourism. Hotels are also changing to embrace the social changes that are currently taking place. 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. Likewise, the same also goes with going on holidays abroad every year. There are positive social impacts of tourism, demonstrating benefits to both the local community and the tourists. Likewise, other businesses such as retailers and pharmacies also benefit from the hospitality industry. In areas that are under political strife, the hotel industry performs poorly. Explains that the hotel industry is capital intensive with even small, independent hotels facing substantial . attacks in high profile hotels. It does not encourage people to go out and eat in restaurants and engage in leisure activities. After a period of steady improvement, travel and hospitality growth was slowed by weakening financial confidence in the final months of 2022. 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. 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). This may be in the form of museum exhibitions, in the way that restaurants and shops are decorated and in the entertainment on offer, for example. Copyright 2017 2025. He is a lecturer in Management and Marketing. There are many examples of ways that tourists offend the local population, often unintentionally. On the other hand, internal factors are factors that occur . Reviews Power your distribution, marketing and revenue strategy with free access to key booking trends and industry best practices. Read also: Business tourism explained: What, why and where. 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). Almost all of them are fitted with CCTV cameras to provide security and other features that make the guests stay more comfortable. Hotels Some destinations will encourage local cultures and arts to be revitalised. Growth of casinos and other gambling facilities can encourage not only the tourists to part with their cash, but also the local population. I send out travel tips, discount coupons and some material designed to get you thinking about the wider impacts of the tourism industry (like this post)- perfect for any tourism student or keen traveller! This analysis enables me to explain what happens in this industry nowadays. Technology has greatly benefitted the hospitality industry. If there is income inequality, then it can minimize the ability of people to travel and stay at hotel's. Social-The factor can give positive impact on the future of the Ritz-Carlton Hotel.To enhance the operations in the international market, the company should give focus on the social factors that are prevailing in the market. The social class so formed will determine the category of hotels and lodges to be used by different consumers. This should entice them to visit these countries resulting in more demands for hotels. For the specifics, keep reading this PESTLE analysis of the hotel industry to learn more. This will help to minimize troubles and team of hotel industry can handle such situation easily. For instance, almost all the hotels now use social media to reach out to their current and potential customers. In this article PESTLE Analysis of the Hotel Industry. Much of the technology, such as apps, third-party ordering, and direct online ordering, has been used for several years. The supply! Restaurant Industry PESTEL analysis can identify how political, economic, socio-cultural, technological, ecological, and legal issues can impact the conditions of the restaurant industry. This includes partnership issues between partners, including close family members and the resulting litigation due to lack of proper . 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. There are They touch on areas such as business and financial analytics, mergers and acquisitions, portfolio valuations and private equity. Technological factors that may impact on the hotel industry. 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 It is not fake or reproduced in any way. Pestle Analysis of Hilton Hotel. This may help promote traditions that may have become distant. Do we want everything to become standardised though? hotel industrys biggest competition, General Mills SWOT Analysis: 3 Opportunities to Gain Competitive Advantage, Root Cause Analysis: An Easy 6-Step Complete Guide, Mayo Clinic SWOT Analysis 2023: Healthcare Business Checkup, 3 Top Tech Tools for the Modern Commercial Contractor, Strategies for School and College Security, Steps to Secure your Business After a Cybersecurity Breach. 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. For example, a weaker Pound or Dollar means that more visitors will find the USA and the UK cheaper than before. State of the hospitality sector. Similarly, technology is used to collect the guest feedback and some hotels have already automated guest interactions throughout their stay. Think about it. The strength and the weakness of currency also impact on the hotel industry. strength of currency can bolster the industry. The Western world believe that a tourist destination is no longer authentic when their cultural values and traditions change. Museums, shows and galleries are fantastic way to showcase the local customs and traditions of a destination. 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