Source: How does the environment affect the hospitality industry? scarce. There is likely to be economic inequality between locals and tourists who are spending more than they usually do at home. 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. Leave your comments below. Most governments have ensured through legal measures that no such discrimination is allowed to take place. The management of a company uses PESTEL analysis to weigh the factors that can hinder or promote the industry's growth. also compliances that all hotels need to meet. This growth is further fuelled by the government initiatives. massive amount of disposable items it can be the cause of serious environmental blog or share it on social media. Structural Equation Modeling using Partial Least Square Method was used as the research methodology. Technological factors that may impact on the hotel industry. Recessions, inflations, and other economic fallouts severely affect people's ability to afford luxury hotels. According to Eurostat (cited in Hotrec, 2018) the hospitality industry created 1.6 million jobs in Europe alone between 2013 and 2016. This will help to minimize troubles and team of hotel industry can handle such situation easily. Since this industry uses a iHop, too. Now its all chains and multinational corporations. Fast 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 . Do you want an authentic squat toilet in your hotel bathroom or would you rather use a Western toilet? Definition. Environmental factors have a major impact on the hospitality industry. 3. The jobs created by tourism can also be a great boost for the local community. Likewise, the same also goes with going on holidays abroad every year. He holds an MSc in Tourism & Hospitality from the University of Sunderland. 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, a weaker Pound or Dollar means that more visitors will find the USA and the UK cheaper than before. This will further drive up wages and . Hotels are also becoming more accepting of different classes of people and are ensuring they are better equipped to serve the necessities. Think about it. 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Other relevant articles for you are: 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. This industry has witnessed a surge of substantial growth over the last decade since the end of the financial crisis of 2007/8. 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? There are many social benefits of tourism, demonstrating positive social impacts. 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. Methodology This study is based on secondary data. Overall, the tourism industry is influenced by a complex interplay of economic, political, cultural, social, and natural factors. If you liked any of these articles, please feel free to share with others by clicking on the icons provided. 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. You may also like reading PESTEL analysis of the hospitality industry. If it were not for the tourists they would have a different line of work, they would not speak English and they would not choose to eat burger and chips for their dinner. Corporate governance. This helps them reduce their advertising costs and interact with the customers in real time. Are HNIs buying luxury properties amidst growing inflation and rising interest rates. Continued Also, the competing enterprises, governments, courts . Learn about CSR in the hospitality industry and explore its . 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. 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. Failure to provide data safety may costs hotels millions of pounds. Hilton Hotels PESTEL Analysis. People who stay at hotels will take photos It is not only crucial towards the tourism industry Some of the expensive hotels in the USA cost guests thousands of dollars a night. 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! Almost all countries now have discrimination laws in place which has benefitted the tourism industry and in turn the hotel industry. A simple explanation. Economic environment influences the hotel industry in many different ways. This detailed PESTEL analysis of the hospitality industry aims to examine some of the macro factors that have impacts on the global hospitality industry. 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. The role of education and training providers to support these issues is therefore significant. 3. Technological: The technological factors have emerged to be the facilitators of demand for the tourism industry in the 21st century. Consumers are said to pass through a cognitive and affective phase before adopting and showing certain behavior. Or should we let them grow and change, just as we do? websites forces hotels to remain competitive. to its influence. There are different ways with which governments can influence the hospitality industry. On the other hand, internal factors are factors that occur . For instance, restaurants must comply with food hygiene standards though these standards may vary from one country to another. Similarly, hotels are using information technology in various ways to serve their consumers better. Individualism and collectivism. 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. Tailoring pay immediate attention to. The labor crisis in the hospitality industry is expected to gain momentum in 2022 as demand recovers and hotels look to hire new staff from a shrunken labor pool. This one is one of the key success factors in the hotel industry. Another thing the government controls are taxes. 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. It is not fake or reproduced in any way. massage parlors. Analysis of the Hotel Industry here to learn more. Demographics usually are an aspect of the larger Social issue. 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. It does not encourage people to go out and eat in restaurants and engage in leisure activities. Social factors play a major role in influencing the hospitality industry. This PESTLE analysis of the hotel industry should provide you a clear look into the hotel industry and how it performs globally. Just a little something to think about. Traditionally hospitality and tourism has not always lead the way and innovated. If consumer sentiment is favorable both airlines and the hotel brands stand to gain. Social Factors: Following are the social factors impacting Hilton PESTLE Analysis: Hilton hotels brand is very well known among international visitors. Countries that have severe weather conditions have a difficult time flourishing their hotel industry. Since the government affects this industry so Political stability is the key to the success of any industries and it is . Ethical considerations would typically be included in the Social and/or Political areas, depending . But I would argue is this not natural? Surely, new generation is very interested in travelling around the world; hence increasing demand for hotels. 2023 Dr Hayley Stainton, all rights reserved. For example, souvenirs, snacks, and emergency medicine are some of the common items that many tourists buy. If unemployment is high and wages remain stagnant, dining out for many people is a luxury, and certainly not a necessity. competition with corporations like Airbnb, which offer a variety of rooms for Customer Insights and Going Online. I certainly felt this was the way when I went to the Running of the Bulls festival in Pamplona, Spain. There are many social benefits of tourism, demonstrating positive social impacts. However, financial crisis impacts on the hospitality industry badly. prostitution and sex tourism. We are losing our individuality and gaining a sense of global being, whereby we are more and more alike than ever before. Is it right to go topless on a beach if within the local culture it is unacceptable to show even your shoulders? 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. Authenticity is essentially something that is original or unchanged. Unfortunately, there are many changes that come about as a result of tourism that are not desirable. 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. Further to this, tourists often, out of ignorance or carelessness, fail to respect local customs and moral values. 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 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. This may help promote traditions that may have become distant. cheaper than the average hotel room. Environmental factors that may impact on the hotel industry. Hotel guests stay in hotels for a variety of In areas that are under political strife, the hotel industry performs poorly. This also helps them to find out all the necessary information with ease. Similarly, destinations risk standardisation in the process of satisfying tourists desires for familiar facilities and experiences. weather in the local area is the deciding factor for whether someone chooses to will grab attention and the hotel chain will gain new customers. 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). Foreign 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. Financial supports and other initiatives from governments play a big role to promote the hospitality industry. Social change is basically referring to changes in the way that society acts or behaves. Years ago, hotels only used traditional media (print and broadcast), but now there are new media brought forth via the internet to consider. These children would never have eaten such sweets should they not have come into contact with the tourists. Travel and Tourism can also affect the rights of human beings in an area. You can quickly Do we want everything to become standardised though? Consumer preference in accommodation is changing rapidly. 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. Social environment is the next environment to discuss in the PESTLE analysis of the hospitality industry. It goes through economic cycles first and comes out first. Think about this. The hotel takes advantages by utilising expertise and competencies of human resources to ensure maximum productivity. 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 isnt something hotel owners can control, but It is an industry which offers opportunities to youngsters to step into their career ladder. According to Moreno (2021) just one week of lockdown cost the UK alone $412 million in lost spending on snacks and non-alcoholic drinks. Although tourism is not the cause of sexual exploitation, it provides easy access to it e.g. The PESTLE analysis is related to the assessment of the external environment in which the industry is functioning. 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. hotel industry. PESTEL is a strategic analytical tool that stands for political, economic, social, technological, environmental and legal factors. activists to ensure a minimal carbon footprint. However, some social factors impact on the hospitality industry badly. The major players in the industry are strong, and it is hard to enter the market. Culture clashes can also be exasperated by the fundamental differences in culture between the hosts and the tourists. 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? Hotel industry is a sub industry of travel and tourism industry, because it influenced with tourism quite strong. Lastly, gambling is a common occurrence as a result of tourism. The industry is also overly reliant on the There are different categories of business in the hospitality industry such as accommodation, food and beverage, travel and tourism, and entertainment. To recommend suggestions to overcome the environmental issues regards to hotel sector. 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 . reasons, such as when visiting family, friends, on business, or vacationing. There are different regulatory requirements to open and run hotels, restaurants, and amusement parks. government; everything from potential tax reform to travel bans can cause the To me, however, this begs the question- is it actually authentic? Crime rates typically increase with the growth and urbanisation of an area and the growth of mass tourism is often accompanied by increased crime. 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. He identified four cultural dimensions, then later studies added two more: Power distance. I know I miss seeing the little independent shops that used to fill the high streets in the UK. A little education in this respect could go a long way, but unfortunately, many travellers are completely unaware of the negative social impacts that their actions may have. 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. This helps to enhance the community spirit as people tend to have more disposable income as a result. Likewise, many people work in the industry for a short period and then move to another, creating high labour turnover for many hospitality organisations. Hotel owners who are confident that their hotels 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. Technology has greatly benefitted the hospitality industry. 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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Tourism is, at its core, an interactive service. Whether it comes out successfully depends on a few primary factors, including The hotel and hospitality sector is facing a larger boom than ever. 8. The economic, political, social, technological and legal forces in action form part of its environment. Perhaps they have been introduced to alcohol through the tourism industry or they have become resentful of rich tourists and turned to crime. considered to be progressive keeping in mind the rise of crime and terrorism 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. 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.. This is a good and bad A PES (TE) model can be approached to determine the factors in external environment influencing Hotel industry in Gold Coastal Hotels which includes political, economic, social-cultural, technological and environmental factors. The UK is a politically stable country which favours 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. Local people often gained new roads, new sewage systems, new playgrounds, bus services etc as a result of tourism. to find a different hotel would be the only option, but now you can check Many tourists will visit the destination especially to see its local heritage. In some locations, the innkeeper law must be posted inside the door of every guest room of the hotel. Political factors - both big and small 'p' political forces and influences that may affect the performance of, . If you enjoyed this article on the social impacts of tourism, I am sure that you will love these too-. seasons, and when they dont, they jack up the room prices. 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.