Globalisation is inevitable in the tourism industry because of the interaction between tourists and hosts, which typically come from different geographic and cultural backgrounds. This is why its so important for hotel owners to understand how the six factors of PESTLE analysis affect this industry. Its so quick that hotel owners cant do much to stop it. I am going to explain how different factors can affect the industry as in positive as in negative way. The hotel These children would never have eaten such sweets should they not have come into contact with the tourists. 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. I also hope that it has encouraged some deeper thinking with regards to issues such as globalisation, authenticity and standardisation. This one is one of the key success factors in the hotel industry. Local economies greatly and directly benefit from the hospitality industry when domestic and international tourists spend money in restaurants, hotels, transports, and entertainment spots. Traveling exchange rates are another economic factor that affects the ability of foreign Any small step taken by the government bychanging some law it would seriously affect hotel industry . The State of Hospitality 2022highlights the current employment and skills shortages in the sector and initiatives in place to address these gaps. 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. Tourism can be a catalyst for strengthening a local community. As you can see, the social impacts of tourism are an important consideration for all industry stakeholders. Most governments have ensured through legal measures that no such discrimination is allowed to take place. The role of education and training providers to support these issues is therefore significant. There is likely to be economic inequality between locals and tourists who are spending more than they usually do at home. Where tourism has grown exponentially many different positive and negative impacts have been noted, and the greater the dependence on tourism the community has, the more inclined locals and the local tourist industry are to change local traditions and lifestyles to adapt to tourists' needs. And globalisation helps us to get that! This can have significant social/socio-cultural impacts. Many governments are also offering tax deductions to the hotel industry in order to boost their economy. BUT, I cant help but wonder if this is always natural? But, on the other hand, the pandemic also gave us an opportunity to look at various factors affecting the growth of the hospitality and tourism industry. only takes one scathing review to destroy a reputation. Most of the environmental factors which affect hotel business are flood, storm or heavy rains. I know I miss seeing the little independent shops that used to fill the high streets in the UK. Factors such as inflation, consumer activity, fixed and variable cost can present both opportunities and threats for in the tourism industry. The supply! Many Perhaps they have changed the way that they speak or the way that they dress. customers wont stay at their locations. He is a lecturer in Management and Marketing. If you enjoyed this article on the social impacts of tourism, I am sure that you will love these too-. The ability of guests to write reviews has also ensured that hotels provide better services and no act of discrimination takes place. Some of the expensive hotels in the USA cost guests thousands of dollars a night. Certainly, there are several factors that determine the success of this industry. For instance, almost all the hotels now use social media to reach out to their current and potential customers. Unsurprisingly, the American Hotel & Lodging Association requested $150 billion in the U.S. government relief. The analysis is presented below: Political Environment. What it needs is smart people, for talent to be ahead of the curve, and leaders who come up with new ideas. hotel industry. For instance, the lockdowns in 2020/21 destroyed many restaurants, hotels, and other hospitality businesses around the world. Technological factors that may have influences on the hospitality industry. 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. 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. Five technologies in particularservice automation, fixed mobile convergence, location-based services, connected meeting rooms, and chatbots and mobile appsare poised to change the guest experience and create areas of opportunity for . On the other hand, internal factors are factors that occur . Explains that the hotel industry is capital intensive with even small, independent hotels facing substantial . 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. For instance, many people have negative perceptions, and therefore, do no seek employment opportunities in this industry, creating skill shortage that is crippling it. be truthful about the food and beverages served to guests. 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. I have covered this in my YouTube video below! There are other social factors too that affect the global hospitality industry. Likewise, the same also goes with going on holidays abroad every year. The hotel owners/managers should calculate the energy usage seriously and perhaps use smart technologies to reduce it. Economic environment influences the hotel industry in many different ways. Analysis of the Hotel Industry here to learn more. Therefore, pressure groups, environmentalists, and governments put a lot of pressure on hospitality organisations to bring the issue of sustainability to their corporate agenda. 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). Crime rates typically increase with the growth and urbanisation of an area and the growth of mass tourism is often accompanied by increased crime. In fact, some hotels were decimated in 2020/21 because of the economic difficulty and lockdowns. Hotels use technology in different ways to serve their consumers better. But since the general global expenditure 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. But dont dilute the culture and traditions of the destination that they are coming to visit, because if it feels too much like home.. well, maybe they will just stay at home next time? Everyone wants to stay somewhere safe. Methodology This study is based on secondary data. International Marketing 4 factors. than hotels in the area. It represents 10% of the UK employment, 6% of businesses, and 5% of GDP (UK Hospitality, 2021). Because tourism involves movement of people to different geographical locations cultural clashes can take place as a result of differences in cultures, ethnic and religious groups, values, lifestyles, languages and levels of prosperity. Understanding and managing these factors is crucial for the success of tourism businesses and the industry as a whole. Therefore, tourism can contribute to rises in the numbers of sex workers in a given area. Social media, like Facebook, and mobile apps are the most prominent tools hotel owners can use, but must also be wary of. 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. This analysis will assess the impact of the political, economic, social, technological, and legal factors on the industry. Aside from the economic impacts created by enhanced employment prospects, people with jobs are happier and more social than those without a disposable income. 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. Consumers are said to pass through a cognitive and affective phase before adopting and showing certain behavior. ), but I also love the way that there are no Starbucks in Italy. The hotel industry contributes trillions of dollars to the global economy. Many businesses were shut down for good. External factors are the factors that occur outside the scope of the company or organization, for example, the economy. For instance, in the UK, they must comply with the Gas Safety (Installation and Use) Regulations 1998 and the Health and Safety at Work Act 1974. Economic factors that may have influences on the hospitality industry. This can provide a great boost to their quality of life and is a great example of a positive social impact of tourism. They have learnt to speak English and to eat Western food. to its influence. thing for the hotel 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. For example, if international 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. Environmental factors have a major impact 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. economic changes, the hotel industry is one of the most susceptible luxury hotels, boutique hotels, and budget hotels. To put it simply, social impacts of tourism are; The effects on host communities of direct and indirect relations with tourists, and of interaction with the tourism industry. In this article PESTLE Analysis of the Hotel Industry. Eating out in restaurants regularly are strong in some countries and cultures. 2. It goes through economic cycles first and comes out first. Social factors that may have influences on the hospitality industry. The hotel industry has existed The social class so formed will determine the category of hotels and lodges to be used by different consumers. weather in the local area is the deciding factor for whether someone chooses to Millions of jobs were lost, and well known brands ran into losses. While landscape, accommodation, food and drinks, etc., must meet the tourists desire for the new and unfamiliar, they must at the same time not be too new or strange because few tourists are actually looking for completely new things (think again about the toilet example I have previously). This detailed PESTEL analysis of the hospitality industry aims to examine some of the macro factors that have impacts on the global hospitality industry. Variable cost can present both opportunities and threats for in the UK guests of. 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