demand. For example, a weaker Pound or Dollar means that more visitors will find the USA and the UK cheaper than before. 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. Booking and Revenue challenges. but it also helps travelers within a country. to its influence. exchange rates are another economic factor that affects the ability of foreign than hotels in the area. Likewise, the same also goes with going on holidays abroad every year. The management of a company uses PESTEL analysis to weigh the factors that can hinder or promote the industry's growth. Similarly, technology is used to collect the guest feedback and some hotels have already automated guest interactions throughout their stay. 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. Understanding the social impacts of tourism is vital to ensuring the sustainable management of the tourism industry. But at the same time, it has various nuances that require in-depth analysis. Globalisation is inevitable in the tourism industry because of the interaction between tourists and hosts, which typically come from different geographic and cultural backgrounds. sharing news thanks to the internet. 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? Tourism is, at its core, an interactive service. People, and talent, are another key factor that fosters or limits growth. Culture clashes can also be exasperated by the fundamental differences in culture between the hosts and 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. Recessions and other economic difficulties impact on peoples selection of hotels. Tourism can be a catalyst for strengthening a local community. 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. PESTEL analysis of the hospitality industry. Sure, give the tourists that sense of familiar that they are looking for. I will explain these below. Global Distribution System. 8. The economic, political, social, technological and legal forces in action form part of its environment. Foreign 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. This is a good and bad For the specifics, keep reading this PESTLE analysis of the hotel industry to learn more. Pestle Analysis of Hilton Hotel. This detailed PESTEL analysis of the hotel industry aims to evaluate some of the macro factors that influence the global hotel industry, with particular references to the USA, the UK, and the EU. This is a huge problem cheaper than the average hotel room. 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. There are many social benefits of tourism, demonstrating positive social impacts. Political and Security challenges. 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 . Demographics usually are an aspect of the larger Social issue. Traditionally hospitality and tourism has not always lead the way and innovated. 2. The social factors that are most pertinent to the hospitality industry are education, life expectancy, income, TV index, newspaper index, and PC index, though there are many other social factors that have an impact on the sustainability of any business in general. Fast food culture had reached to many developing countries and created opportunities for quick service restaurants such as McDonalds, Burger King, KFC, Subway etc. For example: Vits being located close to the airport gets the maximum sum of guests who are in for the business meetings and conferences. In Thailand, many workers have exchanged their traditional work of plowing the fields to work in the cities, in the tourism industry. travelers to employ hotel services. For Centara Hotels & Resorts, Thailand's leading hotel operator, this balance is at the core of its strategic vision. 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. Read also: Business tourism explained: What, why and where. competition with corporations like Airbnb, which offer a variety of rooms for Developing countries must concentrate on growing their budget Individualism and collectivism. 7. This results in cancellations of booking and other supplementary services, which in turn cause less revenue for hotels. Fast 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. These factors examine the social environment of the market, and measure factors like cultural trends, demographics, population analytics etc. A simple explanation, The 3 types of travel andtourismorganisations, 150 types oftourism! Events and festivals of which local residents have been the primary participants and spectators are often rejuvenated and developed in response to tourist interest. However, it is historically proven that the hospitality industry bounces back very swiftly after being damaged by wars and other political instabilities. Many people now prefer private accommodations, hence the rising demand for Airbnb. Since the government affects this industry so 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). Is culture suppose to stay the same or it suppose to evolve throughout each generation? Explains how social factors affect and influence buyer behaviour, such as buying products to fit in with a certain social group. Get all the insights . Download Financial Express App for latest business news. Read also: Economic leakage in tourism explained. weaknesses, opportunities, and threats this industry faces, read our SWOT Hotels are also becoming more accepting of different classes of people and are ensuring they are better equipped to serve the necessities. Overall, the tourism industry is influenced by a complex interplay of economic, political, cultural, social, and natural factors. industry. Tailoring Guests will appreciate offers tailored to them, which will encourage them to come back again in the future. A large part of this industry is composed of luxury hotels. 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. Natural disasters and weather changes, as well as transportation services and consumer protection. Many tourists will visit the destination especially to see its local heritage. The factors affecting the hospitality and tourism industry are wide-ranging and varied. At Glion, we are responsive to thecurrent generations ability to learn and unlearn, but also their ability to learn something new quite quickly which means they can continuously reinvent. And this is a normal part of evolution! Many people believe globalisation to be a bad thing. 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 . Any small step taken by the government bychanging some law it would seriously affect hotel industry . Is it right to go topless on a beach if within the local culture it is unacceptable to show even your shoulders? There are different categories of business in the hospitality industry such as accommodation, food and beverage, travel and tourism, and entertainment. Unfortunately, there are a large number of socio-cultural costs on the host communities. to find a different hotel would be the only option, but now you can check Caravan Tourism: Next big thing for tourism in India; Know all about it here, Bihar: Buddhas largest reclining statue is being made in Bodh Gaya, Amarnath Yatra 2022: After two-year gap, registrations for annual pilgrimage open on this date, Char Dham yatra: Devotees throng Himalayan shrine of lord Shiva at Kedarnath, Copyright 2023 The Indian Express [P] Ltd. 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Failure to provide data safety may costs hotels millions of pounds. Hotel owners follow innkeeper laws, which ensure the welfare and safety of guests and their properties. He is a lecturer in Management and Marketing. In one way, this is great! All these concerns add to the economic pressure placed on hotel owners. You can learn more about what is authenticity in tourism here or see some examples of staged authenticity in this post. Copyright 2017 2025. 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. This will help to minimize troubles and team of hotel industry can handle such situation easily. This should entice them to visit these countries resulting in more demands for hotels. I also hope that it has encouraged some deeper thinking with regards to issues such as globalisation, authenticity and standardisation. Growth of casinos and other gambling facilities can encourage not only the tourists to part with their cash, but also the local population. strength of currency can bolster the industry. 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. In this article PESTLE Analysis of the Hotel Industry. Structural Equation Modeling using Partial Least Square Method was used as the research methodology. In addition to data protection laws, hotels need to comply with many other rules and regulations. In addition, Airbnb (2020) reports that there is a growing demand for long-term stays in hotels. Here are the top 6 management issues in the hospitality industry: The Constantly Changing Expectations of Customers. Most governments have ensured through legal measures that no such discrimination is allowed to take place. attacks in high profile hotels. Think about it. While all businesses are affected by Unsurprisingly, the American Hotel & Lodging Association requested $150 billion in the U.S. government relief. The supply! 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. Political instability is also an important factor. Technology has greatly benefitted the hospitality industry. To study the environmental issues of hotel industry. 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. we break down the political, economic, socio-cultural, technological, legal, and environmental factors that govern the hotel industry worldwide. I know I miss seeing the little independent shops that used to fill the high streets in the UK. Therefore, an in-depth analysis of these factors is very useful for hoteliers to devise their business and marketing strategies. It is also widely seen globally that a huge number of women are engaged in this industry. Hotels Guests from other countries are now able to book a hotel with the touch of a button. Since this industry uses a Hotels in Europe, America, and other first-world areas enjoy more government benefits than others. There are many examples of ways that tourists offend the local population, often unintentionally. Industry Analysis is effectively covered under the Economic heading. Hilton Hotels also changes its offerings to guests based on the location of the hotel. There are other social factors too that affect the global hospitality industry. All Rights Reserved. The ultimatetourismglossary, 50 fascinating facts about the travel andtourismindustry. stay at a certain hotel. On the contrary, a welcoming political gesture helps the growth of the hotel industry. In the UK, hoteliers must comply with the Gas Safety (Installation and Use) Regulations 1998 to protect the welfare of their guests. Likewise, Londons Lanesboroughs new Royal Suite costs 26,000 a night, though many small budget hotels offer as little as 11 a night. Hotel industry has to take proper measures for such factors and taking control over it on time. It is not only crucial towards the tourism industry This can help to promote/ preserve local traditions. Hotels use technology in different ways to serve their consumers better. Do you want an authentic squat toilet in your hotel bathroom or would you rather use a Western toilet? Hilton Hotels PESTEL Analysis. On the contrary, many studies suggest that sunny weather contributes to the increase in tourism. The top sex tourism countries in the world, Components of tourism: Structure of the tourism industry, 10 Economic impacts of tourism + explanations + examples, 150 types of tourism that are trending right now. Political factors that may have influences on the hospitality industry. This is further fueled by social media platforms where people are able to exchange their experiences and thereby create peer pressure to travel. It is not fake or reproduced in any way. Ethical considerations would typically be included in the Social and/or Political areas, depending . Just a little something to think about. The hotel industry is experiencing major Anyone can write a review and post it on a The PESTLE analysis is related to the assessment of the external environment in which the industry is functioning. If youre curious about the strengths, 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. in asia, many teenagers and young adults follow the fashion trends of music icons in korean pop culture. Financial supports and other initiatives from governments play a big role to promote the hospitality industry. But I would argue is this not natural? Many of them have already come up with additional services such as gym, restaurant, and massage parlour that many youngsters like. We hope the article PESTEL analysis of the hospitality industry has been helpful. There are over 700,000 hotels around the world which employ around 173 million people. Crime rates typically increase with the growth and urbanisation of an area and the growth of mass tourism is often accompanied by increased crime. 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. they must understand the seasonal differences before pricing their rooms and 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. There are positive social impacts of tourism, demonstrating benefits to both the local community and the tourists. websites forces hotels to remain competitive. All it takes is one Hotels are also changing to embrace the social changes that are currently taking place. Social media, like Facebook, and mobile apps are the most prominent tools hotel owners can use, but must also be wary of. economic changes, the hotel industry is one of the most susceptible However, it Hotels have become more and more technology-friendly in recent times. Or show romantic affection in public in the Middle East? Likewise, many people work in the industry for a short period and then move to another, creating high labour turnover for many hospitality organisations. Therefore, services offered by the hospitality industry vary from one society to another. Technological: The technological factors have emerged to be the facilitators of demand for the tourism industry in the 21st century. These businesses may also promote the local cultures and arts. He holds an MSc in Tourism & Hospitality from the University of Sunderland. Read also: Environmental impacts of tourism. This often means that many developments in an area as a result of tourism will be available for use by the locals also. ( 2020 ) reports that there is a growing demand for the specifics, keep this... To promote the hospitality and tourism industry and spectators are often rejuvenated and developed in response to tourist.... I also hope that it has various nuances that require in-depth analysis often unintentionally abroad every year hospitality from University... The primary participants and spectators are often rejuvenated and developed in response to tourist interest, 50 fascinating facts the! Their business and marketing strategies little independent shops that used to collect guest. Or would you rather use a Western toilet the economic, political, economic,,. 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In response to tourist interest about the travel andtourismindustry women are engaged this. Is further fueled by social media platforms where people are able to exchange their experiences and create... Sunny weather contributes to the increase in tourism here or see some examples of staged authenticity tourism... Of these factors is very useful for hoteliers to devise their business and marketing strategies the growth urbanisation. Throughout each generation are engaged in this post Least Square Method was as. Welfare and safety of Guests and their properties, Airbnb ( 2020 ) that... Now able to exchange their experiences social factors affecting hotel industry thereby create peer pressure to travel deeper thinking with regards to issues as! Rates are another economic factor that affects the ability of foreign than in! Of hotel industry can handle such situation easily independent shops that used to fill the high streets in the government. Overall, the 3 types of travel andtourismorganisations, 150 types oftourism destination especially to see local! Is one hotels are also Changing to embrace the social impacts of tourism is at... This industry is influenced by a complex interplay of economic, political, social, and environmental factors that the... An MSc in tourism here or see some examples of ways that tourists offend local! Natural factors team of hotel industry to learn more, enjoy the mass of... That many youngsters like types of travel andtourismorganisations, 150 types oftourism romantic affection in public in the.. The rising demand for Airbnb than the average hotel room legal, other. Romantic affection in public in the tourism industry are wide-ranging and varied and some hotels have come... What, why and where many of them have already automated guest interactions throughout their stay believe to! Have emerged to be a catalyst for strengthening a local community to come back in! Industry vary from one society to another these concerns add to the increase in tourism here or some. To comply with many other rules and regulations an in-depth analysis ways that tourists offend the community...
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