The hospitality industry spans across the large range of products or services sectors. It helps travelers within the country and helps in increasing the business of tourism industry. the hospitality industry existed for decades. There are multiple factors which affect the industry. Here is the PESTEL analysis of Hospitality industry.
Political Factors
The political factors influence the industry in many ways. The changes in policies, attitudes of government and regulatory measures will largely determine the success and growth of the players and industry within the industry. If the government is stable and strongly support the industry, then there are high chances for the industry to grow. As the government is able to get higher revenues from tourism and hospitability industry, government supports the industry very much. The political environment is very conductive for industry development. Government has the main responsibility for facilitating the hospitality and tourism products developmental projects for attracting the tourists (UK Essays, 2018).
Economic Factors
Economic factors are very important to analyze the industry growth. From 2019, every country is facing decline in hospitability industry due to COVID-19. The labor market is growing stronger, but people were not willing to travel. The disposable income along with average hourly income has fallen. Hence, overall, these are negative signs for the industry. Although, economic situation is considered as the signal for the industry either to flourish or move towards failure. The demand is not high and hotel brands are also not gaining benefits from the current situation (Pratap, 2017).
Social Factors
Changes in the lifestyle and values, beliefs, working patterns, spending pattern, demographics, religious differences, and ethnic background of population-all have their impacts on the survival of the industry. The growing ethnic, cultural diversity, and gender in the workforces helps in creating the opportunities and challenges invariably in every industry. However, at the global level, all these factors negatively impact the hospitality industry due to the declining trend. However, consumer preferences matter a lot in this industry. For example, after the COVID-19, tourists prefer to have their private accommodations, and hence facilitators like Airbnb are in demand (Rathore, 2021).
Technological Factors
The technological factors can change the ways of providing services. Specially after the launch of broadband connectivity, the wide changes occurred in the commercial world. The advanced systems of Enterprise Resources Planning (ERP), Supply Chain Management (SCM), and Customer Relation Management (CRM), have contributed to systematic enlargement of Industry. Advanced technologies help the hospitality industry in providing various services like multimedia projectors, LCD screens, WI-FI technology, digital telephone facilities, online reservation systems, information exchange facilities etc. These services help the business in gaining competitive advantage. Changes in technology has changed the way businesses operates. It is important for businesses to maintain the competitive environment in the industry to be a market leader (UK Essays, 2018).
Environmental Factors
Sustainability is one of the main concerns for hospitality industry. People are being more concerned about environment and prefer eco-tourism. United Nations has recognized 2017 as an International Year of Sustainable Tourism for Development. Other concerns related to environment are important for hospitality industry, from restaurant brands, hotel services, and transport services. From waste management to ecological impact, all the concerns are important for tourism operators. Even the airline companies have directly impacted by the changing weather conditions. Seasonal tourism effects the hospitality industry. Tourists do not prefer to flock to such areas all year. Thus, the ecological and environmental factors have great impact on the industry (Pratap, 2017).
Legal Factors
The regulations, laws and policies in hospitality industry is very complex. This is because public and labor security is important concern. There are different laws which influence the sector, but labor laws and public safety are needed to be a big concern. Hospitality industry cannot lose its focus on risk management; however, they have the risk of losing the market share. The legal challenges and pressures in hospitality environment are big. But, overall, from 2019, hospitality industry is declining across the globe (Rathore, 2021).
Conclusion
Hospitality sector or industry is one of the biggest revenue generators for the countries specially developed countries, as it brings revenues in the country. However, after COVID-19 many countries across the globe are facing decline in the tourism and hospitality industry.
References
Pratap, A. 2017. Hospitality industry PESTEL analysis. [Online], Available at: https://notesmatic.com/hospitality-industry-pestel-analysis/, [Accessed on: 5th May, 2021].
Rathore, J. 2021. How has PESTEL analysis affected Hospitality Industry. [Online], Available at: https://www.academia.edu/10122060/How_has_PESTLE_factors_affected_Hospitality_Industry, [Accessed on: 5th May, 2021].
UK essays, 2018. Hospitality industry PESTEL analysis. [Online], Available at: https://www.ukessays.com/essays/tourism/external-environment-in-hospitality-tourism-essay.php, [Accessed on: 5th May, 2021].