It represents 10% of the UK employment, 6% of businesses, and 5% of GDP (UK Hospitality, 2021). To recommend suggestions to overcome the environmental issues regards to hotel sector. There is likely to be economic inequality between locals and tourists who are spending more than they usually do at home. 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). 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. All rights reserved LCHW. In most cases, the innkeeper law will state how much compensation the innkeeper will pay guests if their property is stolen or damaged. 6. 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. Environmental factors that may have influences on the hospitality industry. 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. 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". 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. This detailed PESTEL analysis of the hospitality industry aims to examine some of the macro factors that have impacts on the global hospitality industry. Analysis of the Hotel Industry here to learn more. 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. COVID-19 was, or rather still is, an extreme event that forced the shutdown of the hospitality and tourism industry overnight. Download Financial Express App for latest business news. globe. The definition of these two terms needs to be looked at in order to understand what they were. Cultures are preserved and protected and globalisation is limited. Much of the technology, such as apps, third-party ordering, and direct online ordering, has been used for several years. However, 79.6% believe in Christianity, and 18.9% don't believe in any religion. of the dishes. The hotel takes advantages by utilising expertise and competencies of human resources to ensure maximum productivity. Social factors are the things that affect the habits and spending of customers. 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. attacks in high profile hotels. The marginal cost increases, so the supply contracts. Its so quick that hotel owners cant do much to stop it. 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. Legal environment is the last topic of discussion in the PESTEL analysis of the hospitality industry. Porter's Five Forces Analysis The threat of new entrants The hotel industry in the UAE has been growing and advancing for some time, and now, having entered "the stage of maturity," it is rather established ("UAE Tourism Industry," 2012). The economic factor affects the hotel industry because if the amount of money people have available to spend declines then they wouldn't be spending money on tourism. Restaurant Industry PESTEL analysis can identify how political, economic, socio-cultural, technological, ecological, and legal issues can impact the conditions of the restaurant industry. Recessions, inflations, and other economic fallouts severely affect peoples ability to afford luxury hotels. Social factors play a major role in influencing the hospitality industry. 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. Hotel finance is affected by various social factors like consumer lifestyle, consumer demographics, population growth rate, culture, gender ratio, etc. Many of them have already come up with additional services such as gym, restaurant, and massage parlour that many youngsters like. 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 UK is a politically stable country which favours the growth of the hotel industry. Social factors that may have influences on the hospitality industry. growth is expected into 2020 and beyond. iHop, too. Copyright 2017 2025. The Western world believe that a tourist destination is no longer authentic when their cultural values and traditions change. biodegradable items to counter the climate crisis. The management of a company uses PESTEL analysis to weigh the factors that can hinder or promote the industry's growth. Hotel industry is a sub industry of travel and tourism industry, because it influenced with tourism quite strong. Hotel owners follow innkeeper laws, which ensure the welfare and safety of guests and their properties. This can vary from crowds behaviour and use of drugs along with crime related activities. Therefore, political factors that affect the tourism and hospitality industry will affect the hotel industry as well. Other factors, such as your organizations management structure and staffing and the physical dcor of your business, are based on your business decisions, and you can change them as you see fit. The strength and weakness of currency can A simple explanation. Travelers, particularly Not only do these hotels need to have the technology that can counter such environmental effects, but they also face a lack of demand due to the inability of travelers to withstand such conditions. Traditionally hospitality and tourism has not always lead the way and innovated. Read also: Environmental impacts of tourism. There are many social benefits of tourism, demonstrating positive social impacts. The hotel Events and festivals of which local residents have been the primary participants and spectators are often rejuvenated and developed in response to tourist interest. The current generation has shown a strong trend towards traveling. currencies are stronger than the American dollar, people outside of the United hotel industrys biggest competition. Registered office: 85 Great Portland street, First Floor, London, W1W 7LT. 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). I also hope that it has encouraged some deeper thinking with regards to issues such as globalisation, authenticity and standardisation. 2023 Dr Hayley Stainton, all rights reserved. Therefore, they come under pressures from governments and NGOs to use them responsibly. 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. Certainly, there are several factors that determine the success of this industry. could hurt the tourism and hotel industry immediately. I think there is also an ethical discussion to be had here, but Ill leave that for another day. are now being put under a lot of pressure by both governments and environmental I certainly felt this was the way when I went to the Running of the Bulls festival in Pamplona, Spain. These steps can help you get back, Copyright 2020 Weberience LLC. 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The State of Hospitality 2022. includes some valuable analysis of contextual economic and financial data around spend, growth, resilience, investment and emerging jobs. If youre curious about the strengths, industry to crumble. also compliances that all hotels need to meet. Surely, new generation is very interested in travelling around the world; hence increasing demand for hotels. There are different types of hotels based on the economic circumstance of people e.g. 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. Likewise, staycations can also be affected by it badly. government; everything from potential tax reform to travel bans can cause the range of service sectors. Likewise, the same also goes with going on holidays abroad every year. However, most of the world is now free for travelers and thus the hotel industry is facing a massive boom. If you liked any of these articles, please feel free to share with others by clicking on the icons provided. At one time, trying travelers to employ hotel services. Choosing a spot with low crime is crucial for all hotel owners, otherwise, Likewise, the same also goes with going on holidays abroad every year. 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. Many . 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). Uncertainty avoidance. Some destinations will encourage local cultures and arts to be revitalised. 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? competition with corporations like Airbnb, which offer a variety of rooms for Second, the hotel-related industry had a strong inter-dependent . continuing to use environmentally harmful materials are facing a downfall in It is also widely seen globally that a huge number of women are engaged in this industry. How social factors affect hospitality industry? Although tourism is not the cause of sexual exploitation, it provides easy access to it e.g. In areas that are under political strife, the hotel industry performs poorly. He is a lecturer in Management and Marketing. 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 Thailand, many workers have exchanged their traditional work of plowing the fields to work in the cities, in the tourism industry. Social part of the PEST is split into environmental factors too as those have a significant role in the strategic management these days. If you enjoyed this article on the social impacts of tourism, I am sure that you will love these too-. You can eat at the many restaurants built within, like Starbucks and Foreign The major players in the industry are strong, and it is hard to enter the market. Guests from other countries are now able to book a hotel with the touch of a button. Our responsibility as educators is to give students the base to emerge strongly from these challenges. The hotel industry is a subdivision of the hospitality industry. Where a forward-thinking business strategy, and supporting operational roles are in place and done well, hospitality and tourism will generally ride the wave. The government has a stronghold over the hotel Reviews Almost all countries now have discrimination laws in place which has benefitted the tourism industry and in turn the hotel industry. Are you happy to eat rice and curry for breakfast as the locals would do or do you want your cornflakes? The presence of a large number of tourists with a lot of money to spend and often carrying valuables such as cameras and jewellery increases the attraction for criminals and brings with it activities like robbery and drug dealing. Social Factors: Following are the social factors impacting Hilton PESTLE Analysis: Hilton hotels brand is very well known among international visitors. Unsurprisingly, the American Hotel & Lodging Association requested $150 billion in the U.S. government relief. Unfortunately, there are many changes that come about as a result of tourism that are not desirable. Ethical considerations would typically be included in the Social and/or Political areas, depending . Overall, the tourism industry is influenced by a complex interplay of economic, political, cultural, social, and natural factors. They must also protect the identifying information of their guests. Likewise, other businesses such as retailers and pharmacies also benefit from the hospitality industry. Still, it took Covid 19 to force the industry to exploit its use to a. Tailoring To me, however, this begs the question- is it actually authentic? 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! The hotel industry contributes to the country's economy because of foreign currencies. Unfortunately, there are a large number of socio-cultural costs on the host communities. However, under-tapped opportunities and pent-up demand still exist. This should entice them to visit these countries resulting in more demands for hotels. For instance, if the political party in power sets a travel ban, it He is a lecturer in Management and Marketing. Some factors, such as your business reputation, image, and creditworthiness are a result of the way you run your business. 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 . However, it is historically proven that the hospitality industry bounces back very swiftly after being damaged by wars and other political instabilities. This text by Hyung You Park explains the principles of heritage tourism in more detail. the previous Presidents laws. Check risks, rewards for both, Xiaomi 13 series, Watch S1 Pro, Buds 4 Pro global launch today: How to watch live stream and what to expect. But I would argue is this not natural? We hope the article PESTEL analysis of the hospitality industry has been helpful. 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. Perhaps they have been introduced to alcohol through the tourism industry or they have become resentful of rich tourists and turned to crime. 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. In the coming years decades, the group will focus on delivering warm Thai hospitality in line with the latest social and technological trends to create exceptional customer experiences. Tourism is, at its core, an interactive service. 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