There are positive social impacts of tourism, demonstrating benefits to both the local community and the tourists. Nicole refers to a recent publication,The State of Hospitality 2022by Sommet Education, Switzerland,and says, When we think about growth of hospitality and tourism, or any industry for that matter, the discussion often becomes a macro-economic one. 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. Any small step taken by the government bychanging some law it would seriously affect hotel industry . Five technologies in particularservice automation, fixed mobile convergence, location-based services, connected meeting rooms, and chatbots and mobile appsare poised to change the guest experience and create areas of opportunity for . Some factors, such as your business reputation, image, and creditworthiness are a result of the way you run your business. You may also like reading PESTEL analysis of the hospitality industry. This will help to minimize troubles and team of hotel industry can handle such situation easily. Much of the technology, such as apps, third-party ordering, and direct online ordering, has been used for several years. This article shares his insights into the impact of coronavirus on the hotel and leisure market, together with views discussed at the conference. Also, the competing enterprises, governments, courts . Continued Technological Changes and regular innovation. To study the environmental issues of hotel industry. industry. The establishment This can vary from crowds behaviour and use of drugs along with crime related activities. The hotel industry is experiencing major Ethical considerations would typically be included in the Social and/or Political areas, depending . 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). Almost all of them are fitted with CCTV cameras to provide security and other features that make the guests stay more comfortable. Likewise, they must comply with the Health and Safety at Work Act 1974 which requires them to take notice of substances potentially causing harm or ailment to their members of staff. Overall, the tourism industry is influenced by a complex interplay of economic, political, cultural, social, and natural factors. 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. Any incidents close to the hotel can be reported within minutes, shared online by thousands, and have articles written up by media outlets in seconds. Unfortunately, there are many changes that come about as a result of tourism that are not desirable. iHop, too. This illustrates the importance of Tourism industry and its influence on global economy segment. Likewise, these organisations waste a wide variety of things such as food, paper, furniture, appliances, and many more. Demographics usually are an aspect of the larger Social issue. This can cause resentment from the hosts towards the tourists, particularly when they see them wearing expensive jewellery or using plush cameras etc that they know they cant afford themselves. On the contrary, a welcoming political gesture helps the growth of the hotel industry. PESTEL analysis of Poland (Poland country profile), https://www.kantar.com/inspiration/fmcg/lockdown-is-eating-away-food-takeaway-and-restaurant-industry. Local economies greatly and directly benefit from the hospitality industry when domestic and international tourists spend money in restaurants, hotels, transports, and entertainment spots. Geert Hofstede conducted a large scale research project into national cultural differences across subsidiaries of a multinational corporation in over 116,000 people in 50 countries and three regions. 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. Likewise, staycations can also be affected by it badly. There are different categories of business in the hospitality industry such as accommodation, food and beverage, travel and tourism, and entertainment. For the specifics, keep reading this PESTLE analysis of the hotel industry to learn more. The jobs created by tourism can also be a great boost for the local community. These might include; preserving the local culture and heritage; strengthening communities; provision of social services; commercialisation of culture and art; revitalisation of customs and art forms and the preservation of heritage. 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. 2. Uncategorized. competition with corporations like Airbnb, which offer a variety of rooms for At the end of the post I have also included a handy reading list for anybody studying travel and tourism or for those who are interested in learning more about travel and tourism management. The supply! Uber Eats, Just Eat, Hungry House, and many other apps have enabled people to order their food instantly and receive the delivery with a very short time. If consumer sentiment is favorable both airlines and the hotel brands stand to gain. Economic environment influences the hotel industry in many different ways. they must understand the seasonal differences before pricing their rooms and 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). Copyright 2017 2025. massive amount of disposable items it can be the cause of serious environmental Here are the top 6 management issues in the hospitality industry: The Constantly Changing Expectations of Customers. across the world. Everyone wants to stay somewhere safe. The rest of the world have modern electricity and iPhones, they watch TV and buy their clothes in the nearest shopping mall. The social class so formed will determine the category of hotels and lodges to be used by different consumers. 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. The role of education and training providers to support these issues is therefore significant. You can quickly 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. These stats show the importance of this industry in the global economy and lives of some many people (Condor Ferries Ltd, 2021). He identified four cultural dimensions, then later studies added two more: Power distance. Natural disasters and weather changes, as well as transportation services and consumer protection. Increasing number of social media such as Facebook, tweeter and websites like trip advisor help both the customers and the hotels. For instance, restaurants must comply with food hygiene standards though these standards may vary from one country to another. Of course, some countries may still experience some local impacts due to factors such as changes to employment markets and consumer travelling behaviours but generally when economic conditions are favourable people want to travel. sectors for global investors, especially within the United States. 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. They must also protect the identifying information of their guests. I also hope that it has encouraged some deeper thinking with regards to issues such as globalisation, authenticity and standardisation. I know I miss seeing the little independent shops that used to fill the high streets in the UK. What it needs is smart people, for talent to be ahead of the curve, and leaders who come up with new ideas. There are many social benefits of tourism, demonstrating positive social impacts. In some locations, the innkeeper law must be posted inside the door of every guest room of the hotel. 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. Some countries have severe weather conditions in certain times of the year which affect the demand for hotel stays. The Western world believe that a tourist destination is no longer authentic when their cultural values and traditions change. currencies are stronger than the American dollar, people outside of the United Traditionally hospitality and tourism has not always lead the way and innovated. Hilton Hotels also changes its offerings to guests based on the location of the hotel. 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. He is a regular panel speaker at the International Hotel Investment Forum in Berlin. Is culture suppose to stay the same or it suppose to evolve throughout each generation? Hotels and restaurants put increased pressure on the environment as they have massive needs for water, lighting, fuel, and others. Anyone can write a review and post it on a 3. 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. Hotels in Europe, America, and other first-world areas enjoy more government benefits than others. Many destinations will make a conserved effort to preserve and protect the local culture. And this is a normal part of evolution! Stakeholders in tourism: Who are they and why do they matter? This is also often referred to associo-cultural impacts. Hospitality and Tourism Impact You identified several trends impacting the overall hospitality and tourism industry, defined as macro-environment trends - that is, external factors over. If youre curious about the strengths, For example: Vits being located close to the airport gets the maximum sum of guests who are in for the business meetings and conferences. It is this interaction that encourage us to become more alike. M Rahman writes extensively online and offline with an emphasis on business management, marketing, and tourism. demand. I am going to explain how different factors can affect the industry as in positive as in negative way. All rights reserved LCHW. Analysis of the Hotel Industry here to learn more. Hotels do offer more than the standard Airbnb The current generation has shown a strong trend towards traveling. Many hotels are also providing discounts and other offers to ensure that people are able to afford longer and more luxurious stays. Restaurant Industry PESTEL analysis can identify how political, economic, socio-cultural, technological, ecological, and legal issues can impact the conditions of the restaurant industry. Working remotely has today become commonplace for many employees and is forecasted to become more than just a passing trend. Hotels have become more and more technology-friendly in recent times. The Say's Law. Almost all countries now have discrimination laws in place which has benefitted the tourism industry and in turn the hotel industry. The needs to be honest about the calories in the good and nutritional ingredients You can eat at the many restaurants built within, like Starbucks and After a period of steady improvement, travel and hospitality growth was slowed by weakening financial confidence in the final months of 2022. Sure, give the tourists that sense of familiar that they are looking for. Political factors - both big and small 'p' political forces and influences that may affect the performance of, . On these sites, they can read reviews and past commentary of previous patrons. Accommodation establishments: hotels,. 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". 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? Get all the insights . Service in the hospitality industry holds the key. Social environment is the next environment to discuss in the PESTLE analysis of the hospitality industry. All it takes is one Economic factors that may have influences on the hospitality industry. than hotels in the area. 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. Factors such as inflation, consumer activity, fixed and variable cost can present both opportunities and threats for in the tourism industry. These include safety and health 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. This added to the rising expenditure capabilities is ensuring that a wider class of people is able to use the hotel industry. 6. Tourists visit Thailand to taste authentic Thai food. Cultures are preserved and protected and globalisation is limited. Growth of casinos and other gambling facilities can encourage not only the tourists to part with their cash, but also the local population. Factors Affecting Demand in The Tourism Sector 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. The PESTLE analysis is related to the assessment of the external environment in which the industry is functioning. Heres how to deal with it, Nitin Gadkari lays foundation stone of divyang anubhuti inclusive park in Nagpur, We see India as the main market for Vietnam now: Do Xuan Quang of VietJetAir, Good News for travelers! Purpose of the study The purpose of this study is as follows: 1. The hotel industry has existed Political instability is also an important factor. Copyright 2017 2025. They touch on areas such as business and financial analytics, mergers and acquisitions, portfolio valuations and private equity. This is why its so important for hotel owners to understand how the six factors of PESTLE analysis affect this industry. President with new ideals can swiftly impact the hotel industry, and overthrow For instance, almost all the hotels now use social media to reach out to their current and potential customers. Likewise, Londons Lanesboroughs new Royal Suite costs 26,000 a night, though many small budget hotels offer as little as 11 a night. millennials, enjoy the mass selection of rooms Airbnb offers. Unfortunately, there are a large number of socio-cultural costs on the host communities. The widespread popularity of food television programs and related social media have impacted local industries, and have become a catalyst for the . Social change is basically referring to changes in the way that society acts or behaves. These are two examples of cultures which have remained unchanged for the sole purpose of tourism. Such operations in Canada, Europe and America are very costly, but they're affordable in the local Thai market. This leaves hotels, such as Best western with less customers. growth is expected into 2020 and beyond. These children would never have eaten such sweets should they not have come into contact with the tourists. Hotel owners follow innkeeper laws, which ensure the welfare and safety of guests and their properties. 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. nature helps the growth of the hotel industry. Traveling Travel This industry has witnessed a surge of substantial growth over the last decade since the end of the financial crisis of 2007/8. PESTLE Analysis of Hospitality Industry. identification before allowing a guest to use their facilities. 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How social factors affect hospitality industry? 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. Perhaps they have changed the way that they speak or the way that they dress. Similarly on one side these factors push the tourism industry in the short and long run positively and negatively while on the other side affect the economic growth of the global You can learn more about what is authenticity in tourism here or see some examples of staged authenticity in this post. If you liked any of these articles, please feel free to share with others by clicking on the icons provided. 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. Hotels that are still Customer Insights and Going Online. While landscape, accommodation, food and drinks, etc., must meet the tourists desire for the new and unfamiliar, they must at the same time not be too new or strange because few tourists are actually looking for completely new things (think again about the toilet example I have previously). Guests will appreciate offers tailored to them, which will encourage them to come back again in the future. Preserving Local Culture of the dishes. Globalisation is inevitable in the tourism industry because of the interaction between tourists and hosts, which typically come from different geographic and cultural backgrounds. These factors are outside the influence of the company (Lindbald, 2014). On a less philosophical note, another of the negative social impacts of tourism is that it can have significant consequences is culture clashes. Hotels in the EU must comply with the GeneralData Protection Regulation(GDPR)as they collect high volumes of personal data from guests. This is a huge problem stay at a certain hotel. 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. Developing countries must concentrate on growing their budget Hotel Hilton can better formulate a strategy which could convert potential threats into new opportunities For example, souvenirs, snacks, and emergency medicine are some of the common items that many tourists buy. . The impact of politics upon the hospitality and tourism sector is dramatic. The following is a brief Hilton . The economic, political, social, technological and legal forces in action form part of its environment. This helps them reduce their advertising costs and interact with the customers in real time. Firstly, we need to understand what is meant by the term social impacts of tourism. It represents 10% of the UK employment, 6% of businesses, and 5% of GDP (UK Hospitality, 2021). For Centara Hotels & Resorts, Thailand's leading hotel operator, this balance is at the core of its strategic vision. In most cases, the innkeeper law will state how much compensation the innkeeper will pay guests if their property is stolen or damaged. Legal environment is the last topic of discussion in the PESTEL analysis of the hotel industry. Social media, like Facebook, and mobile apps are the most prominent tools hotel owners can use, but must also be wary of. 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. be truthful about the food and beverages served to guests. 2. The legal environment of a country is extremely crucial to the growth of the hotel industry. Most governments have ensured through legal measures that no such discrimination is allowed to take place. Are HNIs buying luxury properties amidst growing inflation and rising interest rates. 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. adjust accordingly. The rising weather crisis has incremented such factors in certain places. continuing to use environmentally harmful materials are facing a downfall in 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. I think there is also an ethical discussion to be had here, but Ill leave that for another day. When vacationing, customers want to stay somewhere warm and relaxing. 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. read our SWOT 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. During the time of difficulty, many people will be interested in budget hotels and give luxury ones a break. 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. It goes through economic cycles first and comes out first. Views expressed are personal and do not reflect the official position or policy of Financial Express Online.). It is the local culture that the tourists are often coming to visit. Tailoring In this article PESTLE Analysis of the Hotel Industry. It does not encourage people to go out and eat in restaurants and engage in leisure activities. Sure, I like Starbucks (my mug collection is coming on quite nicely! The strength and the weakness of currency also impact on the hotel industry. There are many examples throughout the world where local populations have changed because of tourism. to patrons in varying locations. 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). The social factors that are most pertinent to the hospitality industry are education, life expectancy, income, TV index, newspaper index, and PC index, though there are many other social factors that have an impact on the sustainability of any business in general. It is for this reason that many destinations will make every effort to preserve its heritage. All these concerns add to the economic pressure placed on hotel owners. to find a different hotel would be the only option, but now you can check activists to ensure a minimal carbon footprint. Political and Security challenges. Hotels use technology in different ways to serve their consumers better. State of the hospitality sector. Tourists travel to Brazil to go to the Rio Carnival, to mention a few. industry, otherwise known as the hospitality industry, spans across a large Hotel industry is a sub industry of travel and tourism industry, because it influenced with tourism quite strong. Airbnb is the The modern form of hotels can be found in every corner of the There are different ways with which governments can influence the hospitality industry. : //www.kantar.com/inspiration/fmcg/lockdown-is-eating-away-food-takeaway-and-restaurant-industry out and eat in restaurants and engage in leisure activities afford longer more. 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Social environment is the next environment to discuss in the tourism industry its... Is ensuring that a wider class of people is able to use the hotel industry real. On the contrary, a welcoming political gesture helps the growth of casinos and other features make... Speak or the way that they speak or the way that society acts behaves... Cultures which have remained unchanged for the sole purpose of tourism, and tourism demonstrating... Government to combat COVID-19 and the hotel gambling facilities can encourage not only the.! The GeneralData protection Regulation ( GDPR ) as they have massive needs for water, lighting,,. Encourage us to become more than just a passing trend budget hotels and to. And is forecasted to become more and more luxurious stays a huge problem stay at a certain hotel towards! Only social factors affecting hotel industry tourists to part with their cash, but Ill leave that for day! 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