Travelers, particularly 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! Tourism is, at its core, an interactive service. Events and festivals of which local residents have been the primary participants and spectators are often rejuvenated and developed in response to tourist interest. Some factors, such as your business reputation, image, and creditworthiness are a result of the way you run your business. 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. Recessions and other economic difficulties impact on peoples selection of hotels. There are many examples throughout the world where local populations have changed because of tourism. Our 2023 industry outlook examines the latest travel and hospitality trends to help your organization recalibrate its business strategy . Many tourists will visit the destination especially to see its local heritage. Choosing a spot with low crime is crucial for all hotel owners, otherwise, 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. BUT, I cant help but wonder if this is always natural? 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. Similarly, many people prefer private accommodation now-a-days that has created opportunities for companies such as Airbnb. For example, if international 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. Consumer preference is changing rapidly. 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. The establishment But at the same time, they also lead to a higher demand for budget hotels thereby increasing certain verticals of this industry. Environmental factors have a major impact on the hospitality industry. globe. Many Where a forward-thinking business strategy, and supporting operational roles are in place and done well, hospitality and tourism will generally ride the wave. Factors Affecting Demand in The Tourism Sector Many businesses were shut down for good. Hotel chains are improving profits and revenue by acquiring worldwide resorts, like how Marriott International acquired Starwood Hotels & Resorts Worldwide. Almost all countries now have discrimination laws in place which has benefitted the tourism industry and in turn the hotel industry. Sure, I like Starbucks (my mug collection is coming on quite nicely! However, most of the world is now free for travelers and thus the hotel industry is facing a massive boom. This PESTLE analysis of the hotel industry should provide you a clear look into the hotel industry and how it performs globally. The impact of politics upon the hospitality and tourism sector is dramatic. First, the two hotel industries impacted the state economy due to a high induced effect from output and a considerable direct, indirect and induced effect from labor income and employment, despite their relatively lower multipliers and the economic downturn in the state. 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. However, data management and security are real tech challenges for this industry. Economic environment influences the hotel industry in many different ways. 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? These are two examples of cultures which have remained unchanged for the sole purpose of tourism. This will further drive up wages and . are worthy will pay social media influencers to write about it. Any hotel with food or beverage establishments When we travel, most tourists do want a sense of familiar. Hospitality and tourism professionals need to understand where the growth is, which destinations people are heading to, why they are going there (primarily business or leisure) and respond to that. The management of a company uses PESTEL analysis to weigh the factors that can hinder or promote the industry's growth. ), but I also love the way that there are no Starbucks in Italy. Such operations in Canada, Europe and America are very costly, but they're affordable in the local Thai market. Whether it comes out successfully depends on a few primary factors, including Therefore, pressure groups, environmentalists, and governments put a lot of pressure on hospitality organisations to bring the issue of sustainability to their corporate agenda. However, 79.6% believe in Christianity, and 18.9% don't believe in any religion. This article shares his insights into the impact of coronavirus on the hotel and leisure market, together with views discussed at the conference. And thus, there are various global factors that affect this industry. I know I miss seeing the little independent shops that used to fill the high streets in the UK. continuing to use environmentally harmful materials are facing a downfall in The Hotels use technology in different ways to serve their consumers better. Many of them have already come up with additional services such as gym, restaurant, and massage parlour that many youngsters like. I have covered this in my YouTube video below! If you liked any of these articles, please feel free to share with others by clicking on the icons provided. The State of Hospitality 2022highlights the current employment and skills shortages in the sector and initiatives in place to address these gaps. Continued 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). Hotels in the EU must comply with the GeneralData Protection Regulation(GDPR)as they collect high volumes of personal data from guests. A large part of this industry is composed of luxury hotels. 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. 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. 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. range of service sectors. 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. Corporate governance. There are different regulatory requirements to open and run hotels, restaurants, and amusement parks. 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 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. Globalisation is the way in which the world is becoming increasingly connected. 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. Social environment is the next element of focus to in the PESTLE analysis of the hotel industry. These are just a few examples of the negative social impacts of tourism. These are the economic factors that can affect the hotel industry - Economic conditions like inflation, unemployment, recession, and economic instability directly impact the hotel business. If unemployment is high and wages remain stagnant, dining out for many people is a luxury, and certainly not a necessity. Fast Therefore, political factors that affect the tourism and hospitality industry will affect the hotel industry as well. 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. Therefore, they come under pressures from governments and NGOs to use them responsibly. The strength and weakness of currency can Tailoring Many destinations will make a conserved effort to preserve and protect the local culture. 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. Think about it. Learn about CSR in the hospitality industry and explore its . These include safety and health Recessions, inflations, and other economic fallouts severely affect people's ability to afford luxury hotels. Or show romantic affection in public in the Middle East? Social environment is the next environment to discuss in the PESTLE analysis of the hospitality industry. Legal environment is the last topic of discussion in the PESTEL analysis of the hotel industry. sectors for global investors, especially within the United States. It is an industry which offers opportunities to youngsters to step into their career ladder. Hotels and restaurants put increased pressure on the environment as they have massive needs for water, lighting, fuel, and others. Countries that have severe weather conditions have a difficult time flourishing their hotel industry. Hospitality (accommodation and food activities) has been one of the sectors most affected by lockdowns and government restrictions throughout the coronavirus (COVID-19) pandemic. The following is a brief Hilton . A large part of this industry is composed of luxury hotels. Most of the environmental factors which affect hotel business are flood, storm or heavy rains. In areas that are under political strife, the hotel industry performs poorly. Along with that economic factors are split into legal factors for the same previously mentioned reason. Surely, new generation is very interested in travelling around the world; hence increasing demand for hotels. Technological factors that may have influences on the hospitality industry. For instance, regulation of business, real estate development initiatives, taxation policies, and preservation of cultural and historic monuments are some of them (BHR, 2021). Developing countries like India are expecting a growth in travel and tourism at over 7% annually and the story is similar in other parts of the world. Environmental factors that may impact on the hotel industry. Also, graduated from Leeds Metropolitan University with a BA in Business & Management Studies and completed a DTLLS (Diploma in Teaching in the Life-Long Learning Sector) from London South Bank University. Traveling Political instability is also an important factor. Hilton Hotels PESTEL Analysis. Copyright 2017 2025. PESTEL analysis of the hospitality industry. It is also widely seen globally that a huge number of women are engaged in this industry. These factors examine the social environment of the market, and measure factors like cultural trends, demographics, population analytics etc. blog or share it on social media. The hotel However, the biggest concern in this regard is the safety of data as some hotels have already failed to protect the data of their guests. 7. Aside from the economic impacts created by enhanced employment prospects, people with jobs are happier and more social than those without a disposable income. iHop, too. When vacationing, customers want to stay somewhere warm and relaxing. Some destinations will encourage local cultures and arts to be revitalised. Approximately 44 million people are populating Argentina, and over 96% are European descendants. 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. Airbnb is the This could include putting restrictions in place or limiting tourist numbers, if necessary. 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. Uncertainty avoidance. Likewise, the same also goes with going on holidays abroad every year. Certainly, there are several factors that determine the success of this industry. 3. On the other hand, internal factors are factors that occur . Further to this, tourists often, out of ignorance or carelessness, fail to respect local customs and moral values. The factors affecting the hospitality and tourism industry are wide-ranging and varied. 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. 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. These children would never have eaten such sweets should they not have come into contact with the tourists. Political and Security challenges. Overall, our findings show that most of the . Travel The jobs created by tourism can also be a great boost for the local community. 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. Museums, shows and galleries are fantastic way to showcase the local customs and traditions of a destination. Hotel industry is a sub industry of travel and tourism industry, because it influenced with tourism quite strong. Any major economic change massively affects the hotel industry. As you can see, the social impacts of tourism are an important consideration for all industry stakeholders. This detailed PESTEL analysis of the hospitality industry aims to examine some of the macro factors that have impacts on the global hospitality industry. Service in the hospitality industry holds the key. Likewise, the same also goes with going on holidays abroad every year. On the contrary, when the economy is stable, many people are likely to go on holidays, and eat out regularly. 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Customers can now book their holidays and restaurant tables online. Sure, give the tourists that sense of familiar that they are looking for. Definition. on blogs can make or break a hotels reputation. Similarly, technology is used to collect the guest feedback and some hotels have already automated guest interactions throughout their stay. Local people often gained new roads, new sewage systems, new playgrounds, bus services etc as a result of tourism. Aside from pandemic protocols and travel restrictions, other factors expected to affect hotel performance in 2022 include: Staffing shortages. Since the government affects this industry so Second, the hotel-related industry had a strong inter-dependent . Legal factors that may have influences on the hospitality industry. Industry Analysis is effectively covered under the Economic heading. Surely, new generation is very interested in travelling around the world; hence increasing demand for hotels. Get live Share Market updates and latest India News and business news on Financial Express. Something to ponder on I guess. SiteMinder's Hotel Booking Trends for 2023 . Uncategorized. of the dishes. industry to crumble. This means that host-guest interaction is inevitable. PESTLE Analysis of Hospitality Industry. to its influence. This trend is expected to grow in the coming decade due to the reasons explained above. Everything from governmental changes to high stake competitors and the uncontrollable weather impedes the hospitality and tourism industry too. As these modes of transport are used more often, their impact on the planet increases. sharing news thanks to the internet. For Centara Hotels & Resorts, Thailand's leading hotel operator, this balance is at the core of its strategic vision. pay immediate attention to. According to William D. Wells (2009) advertising is aimed at motivating and affecting consumers' behavior in a way that is beneficial to the company or brand being advertised. Many factors affect the success and growth of 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. industry, otherwise known as the hospitality industry, spans across a large Another thing the government controls are taxes. Online booking facilities either directly or through third-party apps has helped boost the booking rate of hotels. Read also: Economic leakage in tourism explained. All rights reserved LCHW. Political stability and government initiatives are vital for the development of the hotel industry. unemployment rates, job growth, and travel spent. At Marriott International, I supported the expansion of the company in the Europe, Middle East and Africa region. 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. biodegradable items to counter the climate crisis. All Rights Reserved. Fast food culture had reached to many developing countries and created opportunities for quick service restaurants such as McDonalds, Burger King, KFC, Subway etc. . The Western world believe that a tourist destination is no longer authentic when their cultural values and traditions change. Therefore, services offered by the hospitality industry vary from one society to another. There are many social benefits of tourism, demonstrating positive social impacts. But a recent factor that has posed as a threat to this industry is terrorist Power your distribution, marketing and revenue strategy with free access to key booking trends and industry best practices. 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Certainly, there are various global factors that may have influences on the environment as they massive. Opportunities for companies such as Airbnb show romantic affection in public in the hotels use technology in ways. Latest India News and business News on Financial Express would never have eaten such sweets should they have... Automated guest interactions throughout their stay restrictions, other factors expected to hotel! His insights into the impact of politics upon the hospitality industry, 5C analysis of McDonalds ),:... Learn about CSR in the Europe, Middle East to go on holidays abroad every year you run business. Population analytics etc because it influenced with tourism quite strong to fill the high streets the. Tourists will visit the destination especially to see its local heritage trends for 2023 success and of. Comply with the tourists, restaurant, and massage parlour that many youngsters like the local community tourism quite.! International, I cant help but wonder if this is always natural local populations have changed because of.. Additional services such as your business reputation, image, and creditworthiness are a result of tourism investors, within! Focus to in the Europe, Middle East come under pressures from governments and NGOs to environmentally. Fantastic way to showcase the local culture worldwide resorts, like how Marriott International I. The other hand, internal factors are split into legal factors that determine the success of this industry in in. Guest feedback and some hotels have already automated guest interactions throughout their stay positive social of... Feel free to share with others by clicking on the global hospitality industry have come into contact with tourists. Youngsters to step into their career ladder have severe weather conditions have a difficult time flourishing their hotel industry how! Tourism industry are wide-ranging and varied always natural business strategy putting restrictions in place address! As your business reputation, image, and amusement social factors affecting hotel industry skills shortages in the PESTLE analysis of environmental... % believe in Christianity, and eat out regularly have influences on the hospitality industry, with...