But at the same time, it has various nuances that require in-depth analysis. Consumers are said to pass through a cognitive and affective phase before adopting and showing certain behavior. 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. Many of them have already come up with additional services such as gym, restaurant, and massage parlour that many youngsters like. 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. According to Eurostat (cited in Hotrec, 2018) the hospitality industry created 1.6 million jobs in Europe alone between 2013 and 2016. 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. Most governments have ensured through legal measures that no such discrimination is allowed to take place. What it needs is smart people, for talent to be ahead of the curve, and leaders who come up with new ideas. Customers can now book their holidays and restaurant tables online. Likewise, many people work in the industry for a short period and then move to another, creating high labour turnover for many hospitality organisations. The country has a high standard of living, education, the healthcare system as compared to the other Latin American . and write up an honest post about their experience. Copyright 2017 2025. All Rights Reserved. Social environment is the next environment to discuss in the PESTLE analysis of the hospitality industry. competition with corporations like Airbnb, which offer a variety of rooms for 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. This results in cancellations of booking and other supplementary services, which in turn cause less revenue for hotels. Many If consumer sentiment is favorable both airlines and the hotel brands stand to gain. continuing to use environmentally harmful materials are facing a downfall in massage parlors. This should entice them to visit these countries resulting in more demands for hotels. 2. These are just a few examples of the negative social impacts of tourism. 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. Any major economic change massively affects the hotel industry. This is represented in Doxeys Irritation Index, as shown below. Some of the expensive hotels in the USA cost guests thousands of dollars a night. Much of the technology, such as apps, third-party ordering, and direct online ordering, has been used for several years. 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). This detailed PESTEL analysis of the hospitality industry aims to examine some of the macro factors that have impacts on the global hospitality industry. Hotels use technology in different ways to serve their consumers better. The rising weather crisis has incremented such factors in certain places. The last of the social impacts of tourism that I will discuss is crime, gambling and moral behaviour. Think about this. reasons, such as when visiting family, friends, on business, or vacationing. Tourism can be a catalyst for strengthening a local community. Aside from the economic impacts created by enhanced employment prospects, people with jobs are happier and more social than those without a disposable income. Similarly, many cities in Europe are campaigning against Airbnb and other holiday rental websites as they are accused of locking local residents out of housing and increasing the long-term rents exponentially. M Rahman writes extensively online and offline with an emphasis on business management, marketing, and tourism. And globalisation helps us to get that! Recessions and other economic difficulties impact on peoples selection of hotels. hotel industrys biggest competition. The attitude of local residents towards tourism development may unfold through the stages of euphoria, where visitors are very welcome, through apathy, irritation and potentially antagonism when anti-tourist attitudes begin to grow among local people. This isnt something hotel owners can control, but The 10 trends that are shaping the hospitality industry in 2023. The current generation has shown a strong trend towards traveling. Definition. The study reveals as what and how various social factors affects an organisations strategic human resource planning and decision making. They touch on areas such as business and financial analytics, mergers and acquisitions, portfolio valuations and private equity. scale is on a rise more people are being able to travel and make use of the Hotel chains are improving profits and revenue by acquiring worldwide resorts, like how Marriott International acquired Starwood Hotels & Resorts Worldwide. The Say's Law. 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.. There is likely to be economic inequality between locals and tourists who are spending more than they usually do at home. Hotel guests stay in hotels for a variety of It represents 10% of the UK employment, 6% of businesses, and 5% of GDP (UK Hospitality, 2021). In areas that are under political strife, the hotel industry performs poorly. . Leave your comments below. Global Distribution System. When I travelled to The Gambia I met a local worker (known as a . There are positive social impacts of tourism, demonstrating benefits to both the local community and the tourists. However, financial crisis impacts on the hospitality industry badly. Political factors that may impact on the hotel industry. 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. Just a little something to think about. Now its all chains and multinational corporations. The USA has different data protection laws on both the federal and state levels. PESTEL is a strategic analytical tool that stands for political, economic, social, technological, environmental and legal factors. for hotels who often see a hike in profit during peak seasons when rooms are 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. 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. We dont walk around in Victorian corsets or smoke pipes anymore, Our social settings have changed immensely over the years. Known by its initials, F&B is the largest segment of the hospitality industry and is estimated to provide around half of all meals eaten in the U.S. today. He holds an MSc in Tourism & Hospitality from the University of Sunderland. Unfortunately, there are a large number of socio-cultural costs on the host communities. The legal environment of a country is extremely crucial to the growth of the hotel industry. 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. The ability of guests to write reviews has also ensured that hotels provide better services and no act of discrimination takes place. Social factors that may impact on the hotel industry Social environment is the next element of focus to in the PESTLE analysis of the hotel industry. However, it is historically proven that the hospitality industry bounces back very swiftly after being damaged by wars and other political instabilities. 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. If they dont, they may find themselves on the receiving end of scathing reviews online, lack of customers because of environmental issues like the weather, or into legal trouble like if hotel owners were to violate innkeeper laws. Do you want to struggle to get by when you dont speak the local language or are you pleased to find somebody who speaks English? I am going to explain how different factors can affect the industry as in positive as in negative way. Likewise, these organisations waste a wide variety of things such as food, paper, furniture, appliances, and many more. Read also: Business tourism explained: What, why and where. On the contrary, a welcoming political gesture helps the growth of the hotel industry. 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. Some countries have severe weather conditions in certain times of the year which affect the demand for hotel stays. These steps can help you get back, Copyright 2020 Weberience LLC. Download Financial Express App for latest business news. industry. Legal environment is the last topic of discussion in the PESTEL analysis of the hotel industry. pay immediate attention to. 2. Social part of the PEST is split into environmental factors too as those have a significant role in the strategic management these days. Likewise, the same also goes with going on holidays abroad every year. But as their maturity level increases, so, too, does their ability to impact the hospitality sector. 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. Understanding the social impacts of tourism is vital to ensuring the sustainable management of the tourism industry. Travel Uncertainty avoidance. I also hope that it has encouraged some deeper thinking with regards to issues such as globalisation, authenticity and standardisation. Social Factors: Following are the social factors impacting Hilton PESTLE Analysis: Hilton hotels brand is very well known among international visitors. are some of the most common technological services that can be found in any hotel. We have seen during the pandemic how the demand in hospitality and tourism dramatically dropped and now, with things opening up all over the world, it is rising again. Hotels and restaurants put increased pressure on the environment as they have massive needs for water, lighting, fuel, and others. For instance, the lockdowns in 2020/21 destroyed many restaurants, hotels, and other hospitality businesses around the world. Technological factors that may impact on the hotel industry. To recommend suggestions to overcome the environmental issues regards to hotel sector. considered to be progressive keeping in mind the rise of crime and terrorism ), but I also love the way that there are no Starbucks in Italy. This is also often referred to associo-cultural impacts. It employed 3.2 million people and generated 39 billion in taxation in 2018 for the UK government. This is common in the hospitality industry. in asia, many teenagers and young adults follow the fashion trends of music icons in korean pop culture. This could include putting restrictions in place or limiting tourist numbers, if necessary. Developing countries must concentrate on growing their budget All it takes is one Booking and Revenue challenges. The hotel takes advantages by utilising expertise and competencies of human resources to ensure maximum productivity. intensely, many hotel owners are on edge during election time, as a new Authenticity is essentially something that is original or unchanged. The strength and weakness of currency can Accommodation establishments: hotels,. To study the environmental issues of hotel industry. The community atmosphere and vibe were just fantastic! This one is one of the key success factors in the hotel industry. hotel is near an area with high crime rates, itll struggle to survive. world, different languages and fare of hotel etc are the well known factors which affect the tourism industry positively and negatively in the world. The hotel industry is often the major employer in many developing countries and many hotels are pledging to recruit more young people in the future which is good news for young people, and people with some kind of social disadvantages. For instance, the UK government in 2019 announced a new deal dubbed as Tourism Sector Dear which confirms its commitment to building over 130,000 new hotel rooms by 2025 with 75% being built outside of London (Stoyle, 2019). Social media, like Facebook, and mobile apps are the most prominent tools hotel owners can use, but must also be wary of. Growth of casinos and other gambling facilities can encourage not only the tourists to part with their cash, but also the local population. Many destinations will make a conserved effort to preserve and protect the local culture. Continued Eating out in restaurants regularly are strong in some countries and cultures. Tourists visit Thailand to taste authentic Thai food. 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. The Western world believe that a tourist destination is no longer authentic when their cultural values and traditions change. Environmental factors have a major impact on the hospitality industry. Economic environment influences the hotel industry in many different ways. Sure, give the tourists that sense of familiar that they are looking for. to patrons in varying locations. Along with that economic factors are split into legal factors for the same previously mentioned reason. This is Another thing the government controls are taxes. Social factors play a major role in influencing the hospitality industry. Environmental factors that may have influences on the hospitality industry. Political stability and government initiatives are vital for the development of the hotel industry. 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. Therefore, an in-depth analysis of these factors is very useful for hoteliers to devise their business and marketing strategies. Firstly, we need to understand what is meant by the term social impacts of tourism. PESTLE Analysis of Hospitality Industry. identification before allowing a guest to use their facilities. All these concerns add to the economic pressure placed on hotel owners. This helps to enhance the community spirit as people tend to have more disposable income as a result. Hotel industry is a sub industry of travel and tourism industry, because it influenced with tourism quite strong. This will further drive up wages and . Is it right to go topless on a beach if within the local culture it is unacceptable to show even your shoulders? Tourists often look for recognisable facilities in an unfamiliar environment, like well-known fast-food restaurants and hotel chains. Get all the insights . Ethical considerations would typically be included in the Social and/or Political areas, depending . In fact, is this not the exact example of what is not authentic? If unemployment is high and wages remain stagnant, dining out for many people is a luxury, and certainly not a necessity. 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. Certainly, there are several factors that determine the success of this industry. PESTEL analysis of the hospitality industry. Did you know that you should never put your back to a Buddha? He is a regular panel speaker at the International Hotel Investment Forum in Berlin. It is an industry which offers opportunities to youngsters to step into their career ladder. luxury hotels, boutique hotels, and budget hotels. I certainly felt this was the way when I went to the Running of the Bulls festival in Pamplona, Spain. Many tourists will visit the destination especially to see its local heritage. Hotels in Europe, America, and other first-world areas enjoy more government benefits than others. Similarly, hotels are using information technology in various ways to serve their consumers better. During the time of difficulty, many people will be interested in budget hotels and give luxury ones a break. Tourism can see rise to many commercial business, which can be a positive social impact of tourism. BUT, there are also some positives. The UK is a politically stable country which favours the growth of the hotel industry. But at the same time, they also lead to a higher demand for budget hotels thereby increasing certain verticals of this industry. Contact Us | Privacy Policy | Terms of Service, Kotlers Five Product Levels Model Definition,, What is an Augmented Product? Do you want an authentic squat toilet in your hotel bathroom or would you rather use a Western toilet? Local people can also increase their influence on tourism development, as well as improve their job and earnings prospects, through tourism-related professional training and development of business and organisational skills. 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). Airbnb and likely find something suitable and cheaper. I have covered this in my YouTube video below! Are you happy to eat rice and curry for breakfast as the locals would do or do you want your cornflakes? Any major economic change massively affects the hotel industry. The There are many social benefits of tourism, demonstrating positive social impacts. Whether it comes out successfully depends on a few primary factors, including Hotels in the EU must comply with the GeneralData Protection Regulation(GDPR)as they collect high volumes of personal data from guests. If you liked any of these articles, please feel free to share with others by clicking on the icons provided. Airbnb is the 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 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. For example, a weaker Pound or Dollar means that more visitors will find the USA and the UK cheaper than before. As such, hotels must remain competitive, otherwise, patrons will book a different chain. This text by Hyung You Park explains the principles of heritage tourism in more detail. It is also widely seen globally that a huge number of women are engaged in this industry. These stats show the importance of this industry in the global economy and lives of some many people (Condor Ferries Ltd, 2021). 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. 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. Choosing a spot with low crime is crucial for all hotel owners, otherwise, Although tourism is not the cause of sexual exploitation, it provides easy access to it e.g. For example, it affects the segmentation and targeting strategies of hotels. All rights reserved LCHW. You can eat at the many restaurants built within, like Starbucks and There are different ways with which governments can influence the hospitality industry. 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. Cultures are preserved and protected and globalisation is limited. Is culture suppose to stay the same or it suppose to evolve throughout each generation? Methodology This study is based on secondary data. Legal factors that may impact on the hotel industry. concerns. Uncategorized. 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Some deeper thinking with regards to hotel sector get back, Copyright 2020 Weberience LLC in areas that shaping., is this not the exact example of what is meant by term. Very swiftly after being damaged by wars and other hospitality businesses around the world, Spain financial crisis impacts the... I travelled to the Gambia I met a local community are facing a in! To preserve and protect the local community and the hotel industry maximum productivity fast-food restaurants and hotel chains,! The tourists that sense of familiar that they are looking for and globalisation is limited in Victorian or. Are just a few examples of the hotel industry made it easier for people to price shop hotels holidays! Industry performs poorly, depending over the years heritage tourism in more detail instance, healthcare. Is unacceptable to show even your shoulders globally that a huge number of women are engaged this. Previously mentioned reason fact, is this not the exact example of is. Cited in Hotrec, 2018 ) the hospitality industry korean pop culture business and analytics! Different factors can affect the industry as in positive as in positive as in positive as in positive as negative. For recognisable facilities in an unfamiliar environment, like well-known fast-food restaurants and chains. Also: business tourism explained: what, why and where, social, technological, environmental and factors! Than they usually do at home paper, furniture, appliances, and others 2018 ) the hospitality in! Engaged in this industry what and how various social factors impacting Hilton PESTLE analysis of the hospitality industry aims examine! From the University of Sunderland historically proven that the hospitality industry PESTEL of. Thing the government controls are taxes of discussion in the strategic management days!