Impact of External Factors on Development of Companies in Hospitality Industry

This presentation discusses the impact of external factors such as political, social, legislative, technology, and environmental factors on the development of companies operating within the hospitality industry. It also explores the implications of current and potential trends in the industry. The presentation provides insights into the SWOT analysis of Hilton Hotel and how it is able to develop services and products that meet current trends. Additionally, it discusses the external factors that impact potential and current trends and development in the hospitality industry.

CONTEMPORARY
HOSPITALITY
BUSINESS
LO 3 and LO 4

TABLE OF CONTENT
■ LO3 and LO4
■ Political, social, legislative, technology and environmental factors affect
development of companies operating within hospitality industry
■ SWOT analysis for Hilton Hotel
■ Impact of external factors on development of firms operating within hospitality
industry
■ Implications of current and potential trends in hospitality industry
■ Ability of Hilton Hotel to develop services and products that will meet current
trends
■ External factors impact on potential and current trends and development in
hospitality industry

Political, social, legislative, technology and environmental
factors affect development of companies operating within
hospitality industry
Political factor
■ Hospitality industry analysis is the modern and best way to find out the factors which
impact on organization operating under it.
■ Trade policy, foreign trade, labour law, tax policy and political instability or stability are
the factors that impact development of organizations under hospitality sector.
Economic factor
■ Exchange rates, economic growth, interest rates, disposable income of businesses and
consumers and inflation are the factors which affect organizations operating within
hospitality industry.

CONTI….
Social factor-
■ Population growth, health consciousness, age distribution, career attitudes and customer
preferences are elements that included in social factors which influenced firms operating
successfully within hospitality industry.
Technology factor-
■ Technology incentives, research and development action, level of innovation,
technological advancement are the factors that can affect companies working in
hospitality sector within UK.

CONTI….
Legal factor-
■ Discrimination laws, employment laws, health and safety laws, copyrights and patent
laws, antitrust laws and consumer protection laws are included in legal factors that
might be affecting organizations operating within hospitality sector or industry.
Environmental factor-
■ It includes environmental and ecological aspects such as climate change, weather,
environmental and climate which affect industry such as tourism and hospitality.
■ Increasing scarcity of raw materials, carbon foot print targets and pollution targets set
by government affect company or Hilton hotel within hospitality industry.

SWOT analysis for Hilton Hotel
Strength
■ Brand reputation and recognition is the biggest strength of Hilton Hotel, in UK
company provide quality services to customer that help to build their high image in
marketplace. It is the main source that attract potential and existing customers towards
them and help to retain existing ones for longer. They provide satisfaction grantee to its
guests at all of their properties or companies across the world.
Weakness
■ Hilton is not highly successful at integrating organization with various work culture that
impact on employees' performance as well as profitability. It impacts on decision
making process and management activities.

CONTI….
Opportunity
■ They are able to work according to new trends in customers behaviour that give new
ways to its business towards success and growth at international level.
Threat
■ Threat of new entrants and rising new material pose as the biggest threat to Hilton hotel
profitability and financial budgets.
■ New entrants in hospitality sector impact on companies decision making procedure, new
entrances impact on Hilton hotel current business strategies and plan.

Impact of external factors on development of firms
operating within hospitality industry
■ Changes in Taxation policy put affect on organizations operating within hospitality
industry. Great amount of tax on star and luxury category of hotels impact on their
profitability and productivity, they need to pay high taxes on each of its operations and
business expansion process that influence business functions and other activities.
■ Changes in customers preference is one of the factor that impact on firms operating
with in hospitality sector. Hotels or resorts need to change their whole service structure
that impact on their operational efficiency. If company understand people needs and
make changes in their existing activities they can be able to gain attention of customers
and retain for longer term period.

CONTI….
■ Technology Advancement, change the whole organization structure operating within
hospitality industry. In current modern world technological sector improve and get
developed more and more. Due to advancement in technology company marketing
functions affect the most, if they promote their services into international market with
the help of TV, Billboard and social media platforms they can be able to attract people
and generate more revenue.
■ Changes in employment laws also put negative impact on firms operating within
hospitality sector and its activities related with workers. According to employment law
Hilton hotel and other companies must implement all the rules and legislations within
their employment contract that affect on their profit margin and market position.

Implications of current and potential trends in
hospitality industry
Current trends
■ People are like to plan their family functions and wedding events outside with the help
of event planner. It defined as current trends that impact on Hospitality sector
organizations, local and residential people like to prefer plan for destination wedding
which is suitable and appropriate for local families.
■ They pay money to event planner for planning the best event and provide quality
services to customers.

CONTI….
Potential trends
■ Online booking and event planner, is one of the potential trend that impact on
hospitality industry and drive towards success in marketplace.
■ Through online event planner people will easily communicate and share information
related to their preferences which is essential for planning an event.
■ Guests are able to book events date and pay money to event agent and with the help of
online booking they can save time.

CONTI….
■ Digitalized guest experiences, is another potential trend that help companies operating
within hospitality industry.
■ It supports hoteliers to manage their services they offer to consumers and control
aspects of people experiences and cycle.

Ability of Hilton Hotel to develop services and
products that will meet current trends
■ Hilton hotel are able to develop or serve their best services or goods to people and meet
with the current trends within hospitality industry.
■ They served more than 150 million people in more than 100 territories and countries
effectively.

CONTI….
■ Company conduct market research to identify customers needs and market requirement
and then make plan to offer the best and better than its competitors.
■ Hilton hotel work according to guest needs, they provide room services,
accommodation facility and other that help to retain existing customers with them and
grab the attention of new ones towards them.

External factors impact on potential and current
trends and development in hospitality industry
■ In recent time, people are like to eat healthy food that make them fit and healthy, it
defined as social factors that impact on current and potential trends and development in
hospitality sector.
■ According to this element, companies must focus on preparing food accordant to people
preference which support to make their positive image in marketplace.

PESTLE Analysis
■ Political factor-
Political instability and stability and changes in trade policy impact on Subway and
also effects on their financial performance.
■ Social factor-
Due to changes in consumer preferences make effect on company, many peoples
drive towards healthy lifestyles trends that impact on the production management of firm.
■ Economic factor-
Low income rate of peoples impact on profitability and operational management
efficiencies of Subway.

CONTI..
■ Environmental factor-
Company must contribute in CSR activities which is essential for them as well as
business growth because environment protection is the trends which put negative effects on
business progress and success.
■ Technology factor-
Due to advancement in technology it impact on Subway current technologies which
they used within business structure.
■ Legal factor-
Health and safety is the main concern of company in which they need to focus on
employee safety and health.

SWOT analysis
■ Strength- Subway have strong brand image within market place. It is one of the biggest
fast food restaurants chain in the world by number of outlets.
■ Weakness- interiors of their restaurants design is often looks cheap.
■ Opportunities- they efforts to fulfill the demand of customers, and provide home
delivery services to their consumers.
■ Threat- New entrance within market place and changing trends is one of the threat
which effect Subway the most.

CONTI….
■ Environmental factors also affect current trends and development in hospitality
industry, hotels must reduce waste of materials that prevent air and water form
contamination and make healthy environment around the world.

REFERENCES
■ Altinay, L., Paraskevas, A. and Jang, S.S., 2015. Planning research in hospitality and
tourism. Routledge.
■ Ayoun, B., Rowe, L. and Yassine, F., 2015. Is workplace spirituality associated with
business ethics?. International journal of Contemporary hospitality management. 27(5).
pp.938-957.
■ Bowie, D. and et.al., 2016. Hospitality marketing. Routledge.
■ Chen, J. S. and et.al., 2017. Business co-creation for service innovation in the
hospitality and tourism industry. International Journal of Contemporary Hospitality
Management. 29(6). pp.1522-1540.
■ Cheung, C., Kong, H. and Song, H., 2014. How to influence hospitality employee
perceptions on hotel brand performance?. International Journal of Contemporary
Hospitality Management. 26(8). pp.1162-1178.

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