Impact of External Factors on Hospitality Industry

This presentation discusses the impact of external factors on the hospitality industry, including political, economic, social, technological, legal, and environmental factors. It also explores the SWOT analysis of a specific hotel chain and evaluates the impact of trends in the industry. The presentation concludes with the ability of the company to develop products and services and references for further reading.

Contemporary Hospitality Industry

 Introduction
 Main body
 Conclusion
 References
Table of contents

 PESTLE analysis refers to the framework that helps the organizations to identify and monitor the
impact of external factors on the performance of business. External factors affecting business of
firms operating in hospitality industry are as follows:
Political-
 There are various types of political factors that may impact the business of hospitality organizations
such as political stability is considered as greatest strength of country. Further, rate of taxation may
also impact the cost of operations of the business of hospitality companies.
Economical-
 Economic factors is also one of the major factor that affects the business of hospitality firms. It
affects the demand of product or service offered by organization operating in hospitality sector of
the country.
PESTLE analysis for organisation operating within hospitality
industry.

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Social-
Like economic factors, factors related with social and cultural environment also affects the business of
hospitality firms. There are various social factors such as change in preference and demands of
customers regarding products or service offered by hotels, restaurants etc. Perception, attitude,
beliefs of the clients also affect hospitality industry.
Technological-
 Technological factors also considered as one of the important factor affecting the business and
profitability of firms that are operating in hospitality industry of the country.

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 Technology helps hospitality firms to facilitate the demand of their products or
services. Technology helps the organisation to communicate with tourists to
attract and retain them by providing information regarding benefits of the
services offered by the firms.
Legal-
 Legal environment can be considered as complex for tourism industry.
Companies operating in hospitality industry have to comply various legal laws
like labour law, law related with safety of public etc.

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Environmental-
Environmental factors like sustainability is also a major concern for hospitality industry. There
are various environmental laws developed by the government of the country that has to be
followed by organisation to protect the environment from adverse impact of the activities
of hospitality firms.
Another major factor that may affect the business of companies operating in tourism industry
is weather conditions. It will affect the choice of tourists regarding destination.

SWOT analysis of the hospitality business.
SWOT analysis refers to the tool that help the business to analyse strengths and weaknesses that are existing in
internal environment as well as opportunities and threats that are existing in outside the business. SWOT analysis
of Travelodge is as follows-
Strengths-
One of the greatest strength of Travelodge is that per day rate of staying in the room is very affordable. Room rates of
the hotel starts from just ￡ 30.
Travelodge has launched Business Account Card that helps the tourists to book hotel rooms in fast and convenient
manner.

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Weakness-
 Travelodge offers only a limited range of products and services and it does not provide services like
concierge service, porter service etc.
 Further, the products of organisation are basic and they are not fancy in terms of artistic or
decoration.
Opportunities-
 Travelodge has the opportunity to expand its operations in other foreign countries. Currently, it is
operating in UK, US, Spain etc. It should expand the business in countries like India etc. This will
help to improve current level of sales and revenue.

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Threats-
 Travelodge is facing intense competition from other hotels such as Hilton Hotel, Marriott Hotel etc.
because other budget hotels are offering more attractive facilities and products.
 Currently, economy of the country is showing growth in positive way that means disposable income
of the customers will increase. As a result, they will choose more luxurious hotel like Hilton etc.
 Travelodge is currently having business in limited countries and does not have any plan to expand
business in other international shores. Due to this, foreign country people will not be familiar with
the products or services of the organisation.

Impact of external environment factors on organisation.
 The factors existing in external environment can impact the organisation operating in hospitality
sector in positive and negative way.
 Economic environment includes the condition of economy and currently the economy of UK is
improving. Due to which purchasing power of people is improving. This will positively impact the
business of Travelodge. For Example- Political factors like rate of taxation in the country will
negatively impact the operations of the organisation.
 Technological factors is one of the biggest factor that influences the demand of tourism products and
services. For Example- Travelodge should use social media platforms like Twitter, Facebook etc. It
has also developed Business Account Card that helps to attract large number of customers.

Impact of trends in hospitality industry.
 Hospitality industry refers to the industry that includes various types of services like event planning,
food and drink service, transportation, lodging, travelling etc. There are various trends that are
prevalent in hospitality industry and their impact are as follows -
 Virtual communities and Social networks plays a major role in affecting the behaviour of customers.
For Example- Trip Advisor has lead to improvement in the quality of services offered by
companies operating their business in hospitality industry.
 Online Travel Agents also create major impact on business of Hotels. They are altering the channels
of distribution as a result, customers are shifting from hotels to online travel agents such as Expedia,
Booking Holdings etc. They are building strong relationship with travellers that negatively impact
the profit margin of hoteliers.

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 Nowadays, the importance of software apps for hospitality companies has been increased and it
helps hoteliers to manage the services that are offered by them to clients.
 The need of skilled, talented and quantitative competency in professionals working in hospitality
industry has increased for conducting budgeting, forecasting etc.
 Another current trend prevailing in hospitality industry is automated customer service. Nowadays,
guests prefers self service rather than waiting at front desk office. Automation of the service can also
be seen in marketing activities of hospitality companies like sending e mails to potential clients.

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 There are various organisations that are using software like Customer relationship management.
CRM software are used to manage the information related with clients and it also helps to improve
the relationship with existing and prospective customers.
 Other than the above trends, smart device integration has also played an important role in enhancing
the customer experience. With the help of mobile phones, customers can now use various features of
the room with the help of smartphone. The use of electronic devices in hospitality companies has
increased such as internet of things etc. Through these devices guests of the hotels are now control
temperature, security, lighting, music etc.

Ability of company to develop products and services.
 The ability of Travelodge to meet out current trends that are prevailing in hospitality industry is
described below -
 Travelodge has developed Business Account Card for the clients. This helps the customers to make
payment for the services they have availed. It also helps the clients to book the services of the hotel
in fast and convenient manner.
 Further, Travelodge is using database management system with the help of different vendors such as
Fore Scout, Percona etc. It helps the company to maintain all the information related with guests to
provide better customer services like room service etc. Further, it has integrated smart devices in the
hotel for opening door locks etc.

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 It helps the company to maintain all the information related with guests to provide better customer
services like room service etc. Further, it has integrated smart devices in the hotel for opening door
locks etc.

Evaluate impact of external factors on trends in hospitality
industry.
 The ability of Travelodge to meet out current trends that are prevailing in hospitality industry is
described below -
 Travelodge has developed Business Account Card for the clients. This helps the customers to make
payment for the services they have availed. It also helps the clients to book the services of the hotel
in fast and convenient manner. Further, Travelodge is using database management system with the
help of different vendors such as Fore Scout, Percona etc.

Conclusion
 The above Report has outlined various external factors that are affecting the business of hospitality
industry such as political, social, economical etc. SWOT analysis helps the management of
Travelodge to determine strengths that helps to overcome weaknesses.
 There are various current and potential trends that are affecting hospitality industry like Social
networks, Online Travel Agents, automated customer service etc.
 Travelodge is using database management system through vendors that helps the company to
maintain all the information related with clients As a result, it supports the firm to offer products or
services to customers.

References
Kara, E., 2018. A Contemporary Approach For Strategic Management in Tourism Sector: PESTEL
Analysis on The City Muğla, Turkey. İşletme Araştırmaları Dergisi. 10(2). pp.598-608.
Rahimi, R. and Gunlu, E., 2016. Implementing customer relationship management (CRM) in hotel
industry from organizational culture perspective: case of a chain hotel in the UK. International
Journal of Contemporary Hospitality Managemen., 28(1). pp.89-112.
Williams, C.C. and Horodnic, I.A., 2017. Regulating the sharing economy to prevent the growth of the
informal sector in the hospitality industry. International Journal of Contemporary Hospitality
Management. 29(9). pp.2261-2278.

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