Impact of Macro Environmental Factors on the Working of Hospitality Industry

This presentation discusses the impact of macro environmental factors on the working of the hospitality industry, including political, economic, social, technological, legal, and environmental factors. It also includes a SWOT analysis of a specific company and current and potential trends in the industry.

Contemporary Hospitality Industry

 Introduction
 Impact of Macro Environmental Factors on the Working of Hospitality Industry
 SWOT Analysis of Holiday Innovation
 Current and Potential Trends in Hospitality Industry
 Conclusion
 References
Table of content

Hospitality Industry can be defined as the industry that provides their customers with many services such
as food, lodging, accommodation and many more. The focus is on the satisfaction of customers. The
assignment will cover impact of external factors on hospitality industry, SWOT Analysis of Company and
the current and potential trends in the industry.
Introduction

In order to know about the impact of macro environmental factors on the working of Hospitality Industry,
the use of PESTLE Analysis will be done. The following analysis is used in order to know about the
impact of macro environmental factors on the working of Hospitality Industry is provided as under:
 Political Factors: It refers to those factors that impacts upon the working of an organization due to
changes in governmental policies, rules and regulations of the government. The impact has been drawn
as under:
 This industry is the backbone on UK Government, so the government is making suitable policies that
encourages this business. This is the positive impact.
CONTINUE….

For example- Intercontinental is currently facing a lot of problems and issues due to change in policies
and regulations imposed by the government of UK. This will lead to positive and negative impact on
the working of Travelogue. Its positive impact will be hotel will be able to increase and expand its
business in the best possible manner. While on the other hand its negative impact will be it can create
the chances of risk and uncertainty.
Economic Factors: These are those factors that impacts upon the working of an organization due to
change in interest rates, disposable income of customers, GDP, inflation and many more. The
discussion of this factors on UK Hospitality Industry is provided as under;
 Due to Tourism, many people make their visit or stay in the country and this becomes a source of
income for the country as wells for the industry also because of currency exchange, etc. This is the
positive impact.
CONTINUE….

Example- The management of Intercontinental is also facing problems and challenges due to change in
economical conditions of the economy. Any positive change in inflation rate of the economy will lead
to increase in number of customer's. While it will lead to increase in cost and reduction in tourism of
the country.
Social Factors: These are those factors that impacts upon the working of an organization due to changes
in the taste and preference of people. The impact has been drawn as under:
 The managers in this industry make proper evaluation of the demands of customers that makes the
company able to provide the services in accordance with their demands and needs.
CONTINUE….

Example- For reducing negative impact of this social factor on the working of Intercontinental needs to
make plans and strategies for providing appropriate services to the customer's as per their needs and
preferences. Providing services as per their demand can lead to increase in price.
Technological Factors: These are those factors that impacts upon the working of an organization due to
changes in the technological factors. The impact of this factor is discussed as under:
 With the help of improvement in technology, it would be easy for employees to communicate easily to
each other as the queries of customers are solved while sitting in Hotels.
CONTINUE….

Example- It is very much essential for Intercontinental to make best use of available technology so that its negative
impact can be reduced. With the use of latest technology employee in the hotel will be able to solve the problems
of customer's in the systematic manner. While on the other hand use of latest technology can lead to gathering of
irrelevant and unnecessary data of visitors.
Legal Factors: These are those factors that impacts upon the working of an organization due to some specific rules
and regulations made by the government of a country. The discussion has been provided as under:
 The positive impact is all about the performance of activities of companies in relation to the rules and regulation
of government that focuses on security of traveler and reduces the intervention of government.
CONTINUE….

Example- The positive impact of legal factors on the working of Intercontinental is rules and regulations
will be made for the betterment of employee's working the hotel. While its negative impact will be
implication of new polices can lead to increase in cost and expenses of the hotel.
Environmental Factors: These are those factors that impacts upon the working of an organisation due to
the impact created by it on the environment. The discussion is provided as under:
 However, this industry is not impacting much on the environment but the contribution made by
the company towards the environment will help the company in increasing its awareness and creating
good image in the mindset of customers. Such as in peak times, pollution increases, traffic increases
that impacts negatively on the working of Hospitality Industry.
CONTINUE….

CONTINUE….
Example- Its positive impact on Intercontinental will be large
number of visitors will be attracted because measures will be
taken for conserving environment. While its negative impact
will be it will lead to increase in uncertainty and risk.
.

The following analysis is used in order to know about the internal capabilities and opportunities and
threats of an organisation. The application of this analysis on Holiday Inn has been provided as under:
STRENGTHS
 High brand recall of the company is included in the strength of the Hotel.
 Good Customer base of the Hotel is also its strength as there are around 1200 Hotels of Holiday Inn in
the country.
Impact of Macro Environmental Factors on the Working of
Hospitality Industry

WEAKNESSES
 In emerging economies, the Hotel is facing issues in increasing their penetration.
 Slow movement of the elevators of the company are included in the weakness of the company.
CONTINUE….

THREATS
 Threat to Holiday Inn Hotel is not only from the well renowned hotels but also from the local hotels as
well.
OPPORTUNITIES
 People always want to visit new places. So it is an opportunity for Holiday Inn to find out new places
that could increase income sources.
CONTINUE….

SWOT ANALYSIS OF INTERCONTINENTAL
Strength Weaknesses
The polices for price are decided according to
paying capability of visitors.
Hotel has positive and good brand image. This
directly lead to increase in profitability.
Visitors needs are taken into consideration which
is one of the biggest strength of Intercontinental.
The competition level is very high .
Hotel sometime fails to offer better services to its
potential visitors.
Hotel is not able to analyse and evaluate actual need
of its customer's.
Opportunities Threats
New and innovative techniques can be used for
increasing the market share of the hotel
Major changes in the promotional strategies can
be done.
Expansion of business can be done by
implementing better plans.
Customer's might shift from one place to another
because of high competition level.
Change in rules and regulations polices is one of
the biggest threat for the hotel.
Customer's and visitors are not satisfied with its
services.

Influence of SWOT Analysis on Decision Making
There is need for Holiday Inn to focus over the competitors and make suitable policies that could help the Hotel in
gaining competitive advantage over the competitors. In addition to this, the Hotel is also required to focus on current
market trends and needs of customers to make improvement in the services of the company. The management of hotel
can also make strategies for forecasting demand so that better services can be provided and supplied to them.
Factors affecting supply and demand of intercontinental
Appropriate set of plans and tactics can be made for fulfilling actual demand of potential customer's and visitors.
This can lead to increase in market share and competitive advantage for the hotel as better services will be provided.
CONTINUE….

Current Trends in Hospitality Industry:
Trend 1 The demand of customer's and visitors in the hospitality industry is uncertain so analysis can be done
for knowing such demand.
Trend 2 Appropriate set of services are to be offered to customer's, this can include- transportation facility,
organizing cultural activities, etc.
Trend 3 It is also essential for the organizations in hospitality industry to make best use of latest technology
for giving tough competition to competitors.
 Globalization: The following term is included in the current trends of hospitality industry as it had made traveling
ease across the countries. It is also a reason that has increased the pace of tourism in different countries.
Current and Potential Trends in Hospitality Industry

Safety and Security: Looking upon the terrorist activities, it is also included in the current trends of Hospitality
Industry as it has impacted negatively on the rate of tourism.
Future Trends of Hospitality Industry:
 In future, the importance will be given on the use of internet and technology. The intensity of
competition in between the companies will increase.
 The Hotels will also be developed and used for multi purposes such as the facilities of Casino, Shops,
Theatre, Parks, etc. to provide to the customers.
CONTINUE….

From the above assignment, it has been concluded that with the help of PESTLE Analysis, Hotels will be
able to know about the impact of external environment and could formulate suitable policies for the
development of their business. In addition to this, meeting the current trends and focusing on future trends
will also be helpful for the company as it will provide grounds for development to the company and will
provide competitive advantage.
Conclusion

 Wang, C. J., 2016. Does leader-member exchange enhance performance in the hospitality industry?
The mediating roles of task motivation and creativity. International Journal of Contemporary
Hospitality Management. 28(5). pp.969-987.
 Grobelna, A. and Marciszewska, B., 2016, April. Work motivation of tourism and hospitality students:
implications for human resource management. In Proceedings of the 8th European Conference on
Intellectual Capital, ECIC (pp. 95-103).
 Chan, E. S. and Hsu, C. H., 2016. Environmental management research in hospitality. International
Journal of Contemporary Hospitality Management. 28(5). pp.886-923.
References

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