Contemporary Hospitality Industry Report

This report examines the contemporary hospitality industry, focusing on Intercontinental Hotel Group (IHG). It includes a PESTLE analysis, SWOT analysis, and a discussion of current and potential trends in the industry, highlighting their impact on IHG's development and future strategies.

Contemporary Hospitality
Industry

Table of Contents
INTRODUCTION..........................................................................................................................1
LO 3.................................................................................................................................................1
P6. PESTLE analysis which affect the development of hotel within hospitality industry..........1
LO 4 ................................................................................................................................................2
P7. SWOT analysis for IHG........................................................................................................2
TASK 4............................................................................................................................................3
P8. Implication of current and potential trends in hospitality industry........................................3
CONCLUSION ...............................................................................................................................4
REFERENCES................................................................................................................................5

INTRODUCTION
In present era, it has been observed that hospitality Industry is a border group that deliver
different kinds of services to valuable visitors (Lub and et. al. 2012). Such as hotels, resorts,
amusement park etc. In order to understand the concept, Inter-continental Hotel group is been
chosen for this report. IHG, is a British multinational hospitality company headquartered in
Denham, Buckinghamshire, England. IHG has about 800,000 guest rooms and 5,000 hotels
across nearly 100 countries
Report shows the PESTEL and SWOT analyses that help to understand the impact of
external environment on business development and ensure its survival for long term in present
market. Beside this implication of current and potential trends in hospitality industry is being
described in project.
LO 3
P6. PESTLE analysis which affect the development of hotel within hospitality industry.
It is very significances to analyse the external business environment as its factors have an
immense impact on the business of Hotel directly or indirectly. Therefore management focus to
analyse external factors in an effective manner that help in smooth running of business. The
PESTEL analysis are discussed below in the context of IHG hotel.
Political factors:
These factors includes political stability, laws, regulation and standard, tax policy, rate
and barriers. The need to analyse this factor in proper manner is that it keep on changing
according to the modification in Political premiss of a particular nation. As in case if U.K
government increase the services tax than it may impact the profitability of IHG hotel and reduce
the overall development and performance.
Economic factors:
These factor includes economic development, interest rate, inflation, poverty,
unemployment condition within a country. In present time, UK has high inflation rate that have
direct impact on prices and will increase the price of services and goods offered by IHG. So
people will start moving to the other hotel that provide suitable prices to them. Thus
development of IHG is reduce as company is not able to raise fund and improve operation.
Social factors:
1

These factor are consider to be valuable for hotel as it have direct influence on the growth
of hotel. Social factors involves taste, preferences, age group, customer requirement, actual
needs etc. So it is important for management of IHG to analyse the current needs of visitors as it
keeps on fluctuating. In case if these are not analysed in proper manner than it may reduce the
overall profitability of hotel group (Pechlaner and Volgger, 2012).
Technological:
In this era, techniques and technology keeps on modifying as per the current market
situation. Thus it is very crucial for hotels to implement the best techniques in their system that
will further support to attract large number of customer. IHG can introduce new deliver system
that is “robotic delivery system” so that customer could experience new technology. As it will
have a positive result to hotel and helps to increase customer base as people are influenced by
innovative things.
Environmental:
These factors includes climate, weather, environment situation of a specific place. In case
if customer need geographical location for their vacation like in summer they want to spend their
time in hilly areas. Thus IHG provide the suitable option to customer so that they can plan
according to their needs this help to increase customer share.
Legal:
All those factors that are controlled by laws of country and code of conduct are consider
legal factors. In case if IHG do not follows the law of UK than they have to bear a huge penalties
such as government has banned selling of drugs in hotel and if IHG hotels found selling these
product, then it must have to face hard decision made by government. This will impact
negatively on development of organisation.
LO 4
P7. SWOT analysis for IHG
Management of hotel are focused to determine the strength, weaknesses, opportunities
and threats in order to makes effective strategies. This support them to take valuable decision for
the betterment of services and reduce unwanted activities (Radojevic, Stanisic and Stanic, 2015).
Management of IHG applies the concept of SWOT for the assessment of overall strength and
2

weaknesses which support them to make effective plans for the better development and profit
growth. SWOT analysis of hotel is defined below:
Strength
 One of the main strength for IHG is
strong brand name.
 Hotel is situated in different country
and have a strong presence worldwide.
 IGH is one of the biggest group as it
have larger fund that help them to
manage and control different activity.
 Because of its strong goodwill IHG
have good sales volume as they keeps
on focusing to improve the quality of
services. They have attractive exterior
design that are centre of attraction to
customer.
Weaknesses
 The main weakness for IHG is more
reliability on sales and not any other
activity.
 It is observed that due to recession
revenues keeps on diminishing and
company is not able to focus on
promotional activities.
 Diversity of hotel location and culture
therefore it is very complex to manage
operational activities.
Opportunities
 Management of IHG must use social
media platform such as promotional
messages through website, Facebook,
Instagram etc. that support to increase
sale for future.
 As IHG operate in different countries
but opportunities are emerging in some
other location also like Asia pacific.
Threats
 Currency rate fluctuation is one of the
greatest threats as Hotel operate in
different countries (Raub and Robert,
2013).
 In present time market condition are
dynamic so company threats that their
services and product may not become
outdated.
 As assertive marketing from rivals like
Hotel Marriott that provide the same
services.
From the above it has observed that IHG have enough funds which is consider to be one
of the main strength. It will beneficial for Hotel to expand and market its product and services at
3

global level. The SWOT analysis improve the decision making process such as manager of
company are known to the actual strength so they tries to improve their weaknesses and
overcome threats. It also help to make valuable decision to capture current opportunities as it
support to increase goodwill.
TASK 4
P8. Implication of current and potential trends in hospitality industry.
Trends are consider to be specific style in the business that are beneficial for the overall
growth and development (Hotel industry analysis, 2018). There have been few potential and
current trends that are needed to be consider while operating business in hospitality industry.
Some of these are discussed below:
Virtual reality:
Nowadays this trend is very popular as customer are looking for each prospects before
making any visit. Thus IHG must upload the actual pictures of their hotel room and surrounding
that can attract customer and make them interested to visit hotel.
Create unique and local experience:
It is observed that customer demands are endless and they wants native experience while
travelling from one place to other. Thus management of IHG hotel can tie up with local vendors
and travel agents that will benefit the customer and makes them feel special.
Focus on direct booking:
It is consider to be one of the very popular trend in hospitality industry as traveller wants
pre booking of their rooms that saves money and time. Thus IHG needs to develop attractive
websites and provide online booking services that makes customer satisfied as they can choose
the suitable rooms.
Changing customer lifestyle:
In recent time this trend in hospitality industry have gain popularity as it will have impact
on the overall business of Hotel. It is very important to analyse the customer needs and develop
services accordingly so that profit can be increased.
Potential trends:
The potential drift in the hospitality business is digital modification in supply of services
such as:
4

 Robotic delivery to guest: It is stated that this trend will make changes in the hospitality
industry. The make best use of robot such as transportation of goods, holding of heavy
items etc. In hospitality industry, the IHG could come up with this techniques in order to
give food to customer or visitor staying within hotel. Worker and employees will have
more time to dealt with customer’s issues in the hotel and solve these issues
 For example, the Dash is the latest addition to the crown plaza brand, that is owned by
intercontinental hotel group (IHG). The customer use to make order by by phone and this
robotic machine is then guided to deliver the item to respective customer. This help to
evaluate the ability of IHG as the hotel chain is develop their services to meet the current
market trend that help to grow world image and attain the competitive advantages.
CONCLUSION
From the above report it has been concluded that hospitality business is increasing at a
very immense pace. The internal and external factors make impact on the business. The current
and potential trends are affecting the development so, it is require by hotel to offer products and
services as per the trends.
5

REFERENCES
Books and journals
Lub, X. and et. al. 2012. Different or alike? Exploring the psychological contract and
commitment of different generations of hospitality workers. International Journal of
Contemporary Hospitality Management. 24(4). pp.553-573.
Pechlaner, H. and Volgger, M., 2012. How to promote cooperation in the hospitality industry:
Generating practitioner-relevant knowledge using the GABEK qualitative research
strategy. International Journal of Contemporary Hospitality Management. 24(6).
pp.925-945.
Radojevic, T., Stanisic, N. and Stanic, N., 2015. Ensuring positive feedback: Factors that
influence customer satisfaction in the contemporary hospitality industry. Tourism
Management. 51. pp.13-21.
Raub, S. and Robert, C., 2013. Empowerment, organizational commitment, and voice behavior
in the hospitality industry: Evidence from a multinational sample.mCornell Hospitality
Quarterly. 54(2). pp.136-148.
Online
Hotel industry analysis. 2018. [Online]. Available through:<
https://www.soegjobs.com/2018/05/09/hotel-industry-analysis-market-statistics/>
6