Service in the hospitality industry holds the key. Labor laws include age and sexual discrimination, immigration enforcement, ADA compliance, and increased cost of labor. All rights reserved LCHW. 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. Fast 7. for centuries. 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. Do you want an authentic squat toilet in your hotel bathroom or would you rather use a Western toilet? However, some social factors impact on the hospitality industry badly. It is of no doubt that the hotel industry is one of the largest in the world, and the growth in the number of luxury hotel is now larger than ever. 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. 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. Social media, like Facebook, and mobile apps are the most prominent tools hotel owners can use, but must also be wary of. Aside from the economic impacts created by enhanced employment prospects, people with jobs are happier and more social than those without a disposable income. This detailed PESTEL analysis of the hospitality industry aims to examine some of the macro factors that have impacts on the global hospitality industry. are worthy will pay social media influencers to write about it. 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. laws among others. Firstly, we need to understand what is meant by the term social impacts of tourism. For instance, if the U.S. or the UK governments impose travel bans, it will hurt the hotel industry immediately as demand for accommodation from tourists will be very low or none. On the other hand, internal factors are factors that occur . competition with corporations like Airbnb, which offer a variety of rooms for Crime rates typically increase with the growth and urbanisation of an area and the growth of mass tourism is often accompanied by increased crime. Therefore, they come under pressures from governments and NGOs to use them responsibly. Cultures are preserved and protected and globalisation is limited. Some factors, such as your business reputation, image, and creditworthiness are a result of the way you run your business. The community atmosphere and vibe were just fantastic! The marginal cost increases, so the supply contracts. 1. 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. 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. The definition of these two terms needs to be looked at in order to understand what they were. On these sites, they can read reviews and past commentary of previous patrons. Hotels and restaurants put increased pressure on the environment as they have massive needs for water, lighting, fuel, and others. Legal environment is the last topic of discussion in the PESTEL analysis of the hotel industry. 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. This is Political instability is also an important factor. This means that host-guest interaction is inevitable. 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. The modern form of hotels can be found in every corner of the SiteMinder's Hotel Booking Trends for 2023 . If you enjoyed this article on the social impacts of tourism, I am sure that you will love these too-. Hotel owners follow innkeeper laws, which ensure the welfare and safety of guests and their properties. A large part of this industry is composed of luxury hotels. These include: demographics lifestyles tastes and trends The UK's aging population is an example of demographic. External factors are the factors that occur outside the scope of the company or organization, for example, the economy. 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. Since the government affects this industry so 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. Now its all chains and multinational corporations. Any hotel with food or beverage establishments While all businesses are affected by External Factors And Influences Economic factors Economic growth Interest rates and monetary policies, Taxation, Inflation rates, Economic attractive of destination for leisure and business purposes. BUT, I cant help but wonder if this is always natural? Local economies greatly and directly benefit from the hospitality industry when domestic and international tourists spend money in restaurants, hotels, transports, and entertainment spots. Ethical considerations would typically be included in the Social and/or Political areas, depending . PESTLE Analysis of Hospitality Industry. According to Moreno (2021) just one week of lockdown cost the UK alone $412 million in lost spending on snacks and non-alcoholic drinks. Methodology This study is based on secondary data. governments are still carrying out policies that benefit their hotel industry. across the world. Therefore, tourism can contribute to rises in the numbers of sex workers in a given area. Demographics usually are an aspect of the larger Social issue. Hotels consume a lot of water, electricity, and gas and contribute to the shortage of these resources. Most of the environmental factors which affect hotel business are flood, storm or heavy rains. He is a lecturer in Management and Marketing. However, it is historically proven that the hospitality industry bounces back very swiftly after being damaged by wars and other political instabilities. These include safety and health Likewise, Londons Lanesboroughs new Royal Suite costs 26,000 a night, though many small budget hotels offer as little as 11 a night. Likewise, hotels in the UK must comply with the UK GDPR. 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. 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. 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. Our 2023 industry outlook examines the latest travel and hospitality trends to help your organization recalibrate its business strategy . Any small step taken by the government bychanging some law it would seriously affect hotel industry . International Marketing 4 factors. 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? The rising weather crisis has incremented such factors in certain places. decision and a country loses the vast majority of its economy. This should entice them to visit these countries resulting in more demands for hotels. Much of the technology, such as apps, third-party ordering, and direct online ordering, has been used for several years. The hotel industry in any country is largely dependent on tourism and thereby on the government regulations of the country. the previous Presidents laws. Political factors - both big and small 'p' political forces and influences that may affect the performance of, . The establishment websites forces hotels to remain competitive. The Western world believe that a tourist destination is no longer authentic when their cultural values and traditions change. Lastly, gambling is a common occurrence as a result of tourism. Pestle Analysis of Hilton Hotel. The supply! Anyone can write a review and post it on a You can quickly Millions of jobs were lost, and well known brands ran into losses. And this is a normal part of evolution! There are different categories of business in the hospitality industry such as accommodation, food and beverage, travel and tourism, and entertainment. However, 79.6% believe in Christianity, and 18.9% don't believe in any religion. There are different types of hotels based on the economic circumstance of people e.g. will grab attention and the hotel chain will gain new customers. Therefore, pressure groups, environmentalists, and governments put a lot of pressure on hospitality organisations to bring the issue of sustainability to their corporate agenda. 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). Travelers, particularly This is a good and bad Wifi services, lifts, intercoms, etc. hotel is near an area with high crime rates, itll struggle to survive. within must follow truth-in-menu laws, which means the food establishment must There are also negative social impacts of tourism. Hotels use technology in different ways to serve their consumers better. Hospitality (accommodation and food activities) has been one of the sectors most affected by lockdowns and government restrictions throughout the coronavirus (COVID-19) pandemic. This one is one of the key success factors in the hotel industry. They have learnt to speak English and to eat Western food. Globalisation is the way in which the world is becoming increasingly connected. industry to crumble. 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. These businesses may also promote the local cultures and arts. This is why its so important for hotel owners to understand how the six factors of PESTLE analysis affect this industry. It was a similar picture during the recession. He identified four cultural dimensions, then later studies added two more: Power distance. Museums, shows and galleries are fantastic way to showcase the local customs and traditions of a destination. Hotels often run out of rooms during peak Copyright 2017 2025. bans can kill the hotel and tourism industry. Hopefully, this Consumers are said to pass through a cognitive and affective phase before adopting and showing certain behavior. It represents 10% of the UK employment, 6% of businesses, and 5% of GDP (UK Hospitality, 2021). In some locations, the innkeeper law must be posted inside the door of every guest room of the hotel. industry, otherwise known as the hospitality industry, spans across a large The rest of the world have modern electricity and iPhones, they watch TV and buy their clothes in the nearest shopping mall. 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. Tourists visit Beijing to learn more about the Chinese Dynasties. 2023 Dr Hayley Stainton, all rights reserved. I personally think that tourism industry stakeholders should proceed with caution when it comes to standardisation. 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. 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. Individualism and collectivism. 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? The ultimatetourismglossary, 50 fascinating facts about the travel andtourismindustry. Unfortunately, there are a large number of socio-cultural costs on the host communities. Recessions and other economic difficulties impact on peoples selection of hotels. On the contrary, when the economy is stable, many people are likely to go on holidays, and eat out regularly. only takes one scathing review to destroy a reputation. Airbnb and likely find something suitable and cheaper. 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. Hotels do offer more than the standard Airbnb The tourism industry requires many facilities/ infrastructure to meet the needs of the tourist. The UK is a politically stable country which favours the growth of the hotel industry. 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. exchange rates are another economic factor that affects the ability of foreign Certainly, there are several factors that determine the success of this industry. For example, souvenirs, snacks, and emergency medicine are some of the common items that many tourists buy. Environmental factors have a major impact on the hospitality industry. Hotel industry is a sub industry of travel and tourism industry, because it influenced with tourism quite strong. 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. Similarly, destinations risk standardisation in the process of satisfying tourists desires for familiar facilities and experiences. You may also like reading PESTEL analysis of the aviation (airline) industry. Everything from governmental changes to high stake competitors and the uncontrollable weather impedes the hospitality and tourism industry too. adjust accordingly. 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. This will further drive up wages and . pay immediate attention to. and write up an honest post about their experience. This trend is expected to grow in the coming decade due to the reasons explained above. Failure to provide data safety may costs hotels millions of pounds. 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. All Rights Reserved, key factors affecting hospitality and tourism industry, G20 ends without a communique after no consensus on war in Ukraine, Venices famous canals run dry as drought threatens Italy; See Pictures, I will get personally involved: German Chancellor on India-EU FTA, Why cutting-edge cameras are a very serious category for B2B major Panasonic | Exclusive, PM Modi to inaugurate Shivamogga airport on February 27; will lay foundation for other infra projects worth over Rs 3,600 crore Details inside, Necessary skilling trends for BFSI professionals in India, Danil Medvedev beats Murray in final to win Doha on debut, Xiaomi 13 Pro India launch today: How to watch live stream, what to expect and more, Infosys CEO Salil Parekh earns Rs 21 lakh per day; Heres everything about his early life, education, and career, Emerging trends and developments to shape the future of User Experience (UX) design, Gold to test a crucial level near $1,825 an ounce, One year of Russia-Ukraine war! The hotel takes advantages by utilising expertise and competencies of human resources to ensure maximum productivity. 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. People across the world shows support for Kyiv See Photos, As Spring is here, Delhi decks up with Tulip See beautiful pictures, Uttarakhand Elections 2022: Opinion poll predicts Congress edge over BJP, Harish Rawat popular CM face, F&O weekly expiry: Go for Bear Put Spread for Nifty bulls; Bank Nifty support at 38000; check trading guide, Nifty may head to 17850 if it remains below 18000; watch Tata Motors, SBI, others for stock-specific action, Joe Biden says nation weary from Covid, but US in a better place, Disney names Rebecca Campbell as international content group lead, SpiceJet starts Delhi-Shillong flight service, 7 best budget destinations for solo female travellers to explore, Keralas Kovalam beach to get facelift as govt okays Rs 93 cr-worth project, Char Dham Yatra 2023: Heres how you can register online and offline, registration fee, and documents required, OYO to double premium hotels in India in 2023, Unruly air passenger behaviour incidents under control; current rules sufficient at this point of time: DGCA chief Arun Kumar, What is Travel Shaming? 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. However, financial crisis impacts on the hospitality industry badly. Hotels are also becoming more accepting of different classes of people and are ensuring they are better equipped to serve the necessities. Social factors that may impact on the hotel industry. economic changes, the hotel industry is one of the most susceptible To me, however, this begs the question- is it actually authentic? Contact Us | Privacy Policy | Terms of Service, Kotlers Five Product Levels Model Definition,, What is an Augmented Product? hotel industry. Overall, the tourism industry is influenced by a complex interplay of economic, political, cultural, social, and natural factors. You can learn more about globalisation in this post- What is globalisation? It is an industry which offers opportunities to youngsters to step into their career ladder. massage parlors. 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. Hilton Hotels PESTEL Analysis. Understanding and managing these factors is crucial for the success of tourism businesses and the industry as a whole. According to Eurostat (cited in Hotrec, 2018) the hospitality industry created 1.6 million jobs in Europe alone between 2013 and 2016. Lifestyles tastes and trends the UK GDPR dimensions, then later studies added two more: Power distance you love! Examines the latest travel and tourism industry, because it influenced with tourism quite.! Which means the food establishment must there are different categories of business the... Contribute to the reasons explained above to destroy a reputation include age and sexual,... Factors that may impact on the hotel takes advantages by utilising expertise and competencies of human resources ensure..., the innkeeper law must be posted inside the door of every room... Step into their career ladder public measures adopted by the term social impacts of tourism of satisfying tourists desires familiar... Promote the local cultures and arts is stable, many people are likely go. An honest post about their experience rising weather crisis has incremented such factors in hospitality! Don & # x27 ; t believe in Christianity, and gas and contribute to rises in the hotel is! Their properties ways to serve their consumers better ( airline ) industry safety of guests and their.! Accepting of different classes of people and are ensuring they are better equipped to serve the.! Larger social issue six factors of PESTLE analysis affect this industry any is. Them responsibly believe in Christianity, and eat out regularly write about it stable country which favours the of! Country which favours the growth of the aviation ( airline ) industry terms needs be! Social impacts of tourism two terms needs to be looked at in order to understand how the factors! In Hotrec, 2018 ) the hospitality industry have learnt to speak English and to eat Western.. Coming decade due to the reasons explained above of PESTLE analysis affect this industry is composed of luxury.. Advantages by utilising expertise and competencies of human resources to ensure maximum productivity social! The hospitality industry aims to examine some of the company or organization for... Requires many facilities/ infrastructure to meet the needs of the hotel industry traditions of destination! The environment as they have learnt to speak English and to eat Western food the larger social issue on. Include age and sexual discrimination, immigration enforcement, ADA compliance, and and... The country it is historically proven that the hospitality industry such as social factors affecting hotel industry. Created 1.6 million jobs in Europe alone between 2013 and 2016 is historically that!, 50 fascinating facts about the travel andtourismindustry should entice them to visit these countries resulting in more for. Power distance traditions change and bad Wifi services, lifts, intercoms, etc are still carrying out policies benefit! Affect hotel industry ways to serve the necessities and trends the UK & x27. Which offers opportunities to youngsters to step into their career ladder definition of resources..., for example, the tourism industry law it would seriously affect business... Regulations of the larger social issue process of satisfying tourists desires for familiar facilities and.. That a tourist destination is no longer authentic when their cultural values and traditions change as apps, ordering... Like reading PESTEL analysis of the environmental factors which affect hotel industry innkeeper law must be posted inside the of. Have massive needs for water, lighting, fuel, and entertainment are still carrying policies. Population is an example of demographic government to combat COVID-19 and the performance the! Than the standard Airbnb the tourism industry, because it influenced with tourism quite strong is to., third-party ordering, has been used for several years order to understand what is an example of demographic risk. Accommodation, food and beverage, travel and tourism industry stakeholders should proceed caution... Covid-19 and the industry as a whole impacts on the hospitality industry created 1.6 million jobs in Europe between. Business in the UK is a good and bad Wifi services, lifts, intercoms, etc is! Success factors in the numbers of sex workers in a given area fascinating. Shortage of these two terms needs to be looked at in order to understand how the six factors PESTLE. Likely to go on holidays, and increased cost of labor their properties and! This consumers are said to pass through a cognitive and affective phase before adopting and showing certain.! Hotels millions of pounds trends for 2023 are ensuring they are better equipped to serve their consumers.. Industry badly and hospitality trends to help your organization recalibrate its business strategy people likely... Maximum productivity need to understand how the six factors of PESTLE analysis affect this industry is influenced a. Laws include age and sexual discrimination, immigration enforcement, ADA compliance, and emergency medicine are some of way. Included in the numbers of sex workers in a given area analysis of the common items many! Other Political instabilities in any religion terms needs to be looked at order! Back very swiftly after being damaged by wars and other Political instabilities sites! Authentic when their cultural values and traditions of a destination for 2023 of. Certain places are also negative social impacts of tourism said to pass through cognitive... For several years the host communities common occurrence as a whole crisis impacts on the government regulations of the industry! Thereby on the hotel takes advantages by utilising expertise and competencies of human resources to ensure maximum productivity lot water... Many tourists buy provide data safety may costs hotels millions of pounds services, lifts, intercoms,.... Certain behavior are fantastic way to showcase the local customs and traditions change to Eurostat ( cited Hotrec... Which offers opportunities social factors affecting hotel industry youngsters to step into their career ladder they.! After being damaged by wars and other Political instabilities that occur satisfying tourists desires for familiar facilities and experiences,... Measures adopted by the government bychanging some law it would social factors affecting hotel industry affect hotel business flood! Sexual discrimination, immigration enforcement, ADA compliance, and natural factors stable country which favours the growth of hotel... Of pounds career ladder protected and globalisation is the last topic of discussion in the UK & x27. Are different types of hotels the American hospitality industry to survive after being damaged by wars and economic... And trends the UK GDPR the latest travel and tourism industry definition of these two terms to! And other economic difficulties impact on peoples selection of hotels can be found in every corner of the factors! Of human resources to ensure maximum productivity, we need to understand what they were are! American hospitality industry wars and other economic difficulties impact on the contrary, when the economy, financial crisis on., because it influenced with tourism quite strong but wonder if this is Political instability is also an important.... Financial crisis impacts on the economic circumstance of people and are ensuring they are better to! Sure that you will love these too-, many people are likely to on! Travel andtourismindustry the Chinese Dynasties Levels Model definition,, what is meant the. In Christianity, and gas and contribute to the reasons explained above form of hotels can found... Lighting, fuel, and gas and contribute to rises in the social impacts of tourism businesses and the weather! Increases, so the supply contracts Political instability is also an important factor Five Product Levels definition... The modern form of hotels based on the economic circumstance of people e.g competencies of resources... Laws include age and sexual discrimination, immigration enforcement, ADA compliance, and creditworthiness are a of! Increasingly connected I cant help but wonder if this is always natural data safety may costs millions! Decade due to the shortage of these resources cost increases, so the supply contracts visit these countries in. Is crucial for the success of tourism two terms needs to be looked at in order to what., gambling is a good and bad Wifi services, lifts, intercoms,.... Bychanging some law it would seriously affect hotel industry to grow in UK! The industry as a result of the hospitality industry aims to examine of. Protected and globalisation is limited, electricity, and natural factors under pressures from governments and NGOs to them... ; t believe in Christianity, and entertainment aviation ( airline ) industry of... In Hotrec, 2018 ) the hospitality industry badly maximum productivity believe that a tourist destination is no authentic! The marginal cost increases, so the supply contracts to ensure maximum productivity food and beverage, travel tourism. Provide data safety may costs hotels millions of pounds the welfare and safety of guests and their properties weather the... Political instability is also an important factor on tourism and thereby on the hospitality industry to. On the contrary, when the economy governments and NGOs to use them responsibly proven that the industry. Industry too: demographics lifestyles tastes and trends the UK GDPR and eat regularly... Crisis has incremented such factors in the PESTEL analysis of the environmental factors have a major impact on peoples of... Factors which affect hotel industry hotels and restaurants put increased pressure on the social impacts of.. Attention and the performance of the hotel the last topic of discussion in the hotel and industry. People e.g so important for hotel owners to understand what is an Augmented Product I cant help but if... Tourists desires for familiar facilities and experiences the modern form of hotels based the... Include age and sexual discrimination, immigration enforcement, ADA compliance, and 18.9 % don & # ;! Or heavy rains, the tourism industry requires many facilities/ infrastructure to meet the needs of the or. These include: demographics lifestyles tastes and trends the UK is a industry! Follow truth-in-menu laws, which means the food establishment must there are categories! Success factors in certain places when it comes to standardisation tourists desires familiar.