Industry Analysis and Possible Adaptations

This document provides an analysis of the macro environmental factors affecting the travel and leisure industry in the UK, as well as possible adaptations for hotels in the industry. It discusses political, economic, and socio-demographic factors, and includes a SWOT analysis of UK hotels.

Running Head: INDUSTRY ANALYSIS AND POSSIBLE ADAPTATIONS
INDUSTRY ANALYSIS AND POSSIBLE ADAPTATIONS
Student’s Name
University Name
Author’s Note

2
INDUSTRY ANALYSIS AND POSSIBLE ADAPTATIONS
Table of Contents
1. Analysis of the Macro environmental factors affecting the travel and leisure industry of UK.
3
1.1 Political environmental factors.........................................................................................3
1.2 Economic environment.....................................................................................................5
1.3 Socio-demographic developments....................................................................................6
2. Micro analysis of the hotels sub-sector of the travel and leisure sector of UK........................6
2.1 SWOT analysis model of UK hotels.................................................................................6
3. Challenges faced in execution of tasks 1 and 2........................................................................9
4. Reference List.........................................................................................................................10

3
INDUSTRY ANALYSIS AND POSSIBLE ADAPTATIONS
1. Analysis of the Macro environmental factors affecting the travel and leisure
industry of UK.
So far as most of the business organisations of this industry in UK are concerned, we had to face
tough times because of the recent Global recession. However, one significant factor of this
Industries that in spite of cut down of consumer expenses over travel and leisure services, it is
evident that new hospitality destinations has opened up by about 67% every year in UK and the
in surge of the foreign tourists have enhanced by 30 to 32% person in the year 2019 compared to
what happened in the year 2010 (Al-Najjar 2017). So far as enhancement of prospect is
Industries considered, out of the new hospitality facilities emerging in the country, at least 40%
have been boutique hotels along with establishment of new branches of global hospitality brands
in the country. They have been ample customers for budget friendly hotels boutique hotels as
well as star rated hotels with the latest amenities. The financial uncertainty had prompted the
customers to avail budget Airlines and stay in boutique hotels compared to luxurious outlets.
This has changed the consumer experience and the perception that the boutique hotels can also
provide classic holiday experience has started to emerge (Duncan and Cohen 2016). In the
following parts of the section the various micro environmental factors affecting the industrial
will be reflected.
1.1 Political environmental factors
The government have tendency of introducing legislation as well as regulations that can have a
significant impact on the organisations interested in this industry. However, most researchers like
Ramiah, Pham and Moosa (2017), prefer to call UK a free market from the perspective of this
industry, the government is closed watch on the advancement in this industry which is primary

4
INDUSTRY ANALYSIS AND POSSIBLE ADAPTATIONS
dominated by private sector in order to ensure that the businesses in this industry are functioning
properly and in best alignments to the national interests.
One of the major political factors that have impacted this travel and leisure industry of the
country is the Digital economy act of 2010. This was a parliamentary act which was made in
order to diminish the sharing of files illegally in order to prevent copyright infringement and this
has to be enacted in the most digital environment of the society. Naturally, all the recently setup
hotels, the airports, major transport like Metro Railways, intercity express and so on as well as
the biggest shopping destinations like shopping malls and supermarkets came under obligation of
this regulation (Glaesser et al. 2017). This is because; these are the areas which provide free WI-
FI connection to the customers. In case if any of the customers of these foundations broke the
law of digital economy act, the service provider in this case would come under conviction.
Again, it is not working that is for these facilities at the hotels could charge convenience fees
from their customers. Nevertheless, major Hotel groups which are preferred by international
Travellers for laser as well as business purpose is expected to have Wi-Fi connectivity. On the
contrary note, International Travellers will refer not to stay in search hotels if they are coming
for business conferences or business trips (Davies and Weston 2015).
Another factor impacting the industry is the new immigration policy. This policy introduced by
the coalition government has Costa be concerned in the travel and leisure industry. Caps on
immigration in areas outside European economic area could ignore the issues like skill shortages
in the hospitality sector and mainly in the recruitment as well as employment configuration. The
researchers like Urry (2016), is of the opinion that except from the operational rules like Chefs,
bar staff as well as few other positions, shortage of employee management skills helping evident
all over the hospitality and travel segment. After the imposition of caps on immigration in the

5
INDUSTRY ANALYSIS AND POSSIBLE ADAPTATIONS
sector, it has been observed that only 10% of the domestic Hotel managers and 6% of the
hospitality managers in restaurants are capable of being qualified at the managerial level.
1.2 Economic environment
The first issue that comes in this context is the crowded market of UK. So far as business setups
in which sector is concerned, the recent growth of budget hotels, New shopping complexes,
fashion destinations as well as theme based restaurants attracted tourist locations. This has
converted to K into a travel hub and an important location for flight travel also. This is why the
influx of air travel passengers has also increase at high rate (Holden 2016). In this condition, the
business value of the branded establishments is supposed to fall as there will be many new
entrants occupying the industry offering the same services at a much more comprehensive and
reasonable rate.
However, statisticians have observed that spending over tourism has increased among the
intrinsic and extrinsic customers of UK. It has been observed that number of visitors coming to
UK has increased. The fall in the value of sterling against Euro as well as dollar has prevented
the people of Britain to make overseas travel. Nevertheless, this is a good impact for the travel
and leisure industry of this country.
The VAT increase will also be a crucial factor for this industry. The increase in value added
taxes has done up from 17.5% to 20% and it is evident that this will put more strain on the
disposable income of the customers and reduce consumer spending (Metz 2017). However,
researchers like Bowie et al. (2016), identify that this increase will be beneficial to some extent
as the market diversity will increase. Consumers who used to travel by star rated airline Agencies
will now choose the budget Airlines for travel. The consumers will prefer shopping in the city

6
INDUSTRY ANALYSIS AND POSSIBLE ADAPTATIONS
based shopping complexes rather than the lifestyle outlets of various individual brands and lastly
they will also prefer to stay in the boutique and home stay hotels referred to the major branded
hotels.
1.3 Socio-demographic developments
Since the London Olympics of 2012, the influx of Asian gas in the UK sector has started to
increase. Now consumers from this part of the world comprise about 25% of the international
tourists visiting UK for purposes ranging from business, travel, and leisure to education
(Winfield et al. 2018).
The strategic location of UK also makes it favourable among the international customers of the
travel and leisure industry. The hotels are located close to the fashion, travel as well as the
important business facilities also. People travelling to UK on any purpose find it easy to stay,
enjoy or operate the purpose for which they having travelling. In this context, this is a business
objective that has been realised by most newly setup hotels in UK. Because of their strategic
locations, old hospitality setups have been losing customers.
2. Micro analysis of the hotels sub-sector of the travel and leisure sector of UK
One of the major issues chosen from the above macro-analysis is the high influx of customers.
Another essential macro environmental factor that will be taken up for discussion in the next
section is the development of brand image of various new and emerging establishments in this
sector Impact of severe in surge of customers at an additional rate will impact this subsector in
various strategic ways.
2.1 SWOT analysis model of UK hotels

7
INDUSTRY ANALYSIS AND POSSIBLE ADAPTATIONS
Strengths
One of the major strengths of the hotels of UK is profitability. The Occupancy rate of the hotels
of UK has increased by 80% after the two major International events of the global financial crisis
as well as the London Olympics of 2012. This is why there has been a profit marginalization
where the profit valuation has risen 7.4% in the year 2017 up to 468 million Pounds for the
small, emerging and the boutique hotels and the revenue generation of the major, big and
established Hotel brands Has Fallen about 2.3% (Al-Najjar 2017). In this context has been some
capital investments observed in the real estate properties, home decor, refurbishments and the
restaurant industry also.
Strong presence of tourists, in UK particularly, compared to other most favourite tourist
locations of Europe is another major factor of strength for the hotels of the country. Hotels
increasing the number of rooms and equally increasing the convenience that they are offering to
the customers since 2015.this is the reason why most of the metals which day recognised as
flagship and emerging brands in the 2010-2011, have gained a reputation of becoming one of the
leading Hotel brands in the industry of hospitality in UK. It is expected that by the end of the
year 2020, 85% of the Occupancy rate of the hospitality sector will be consumed by boutique
hotels only. Analysing this factors it cannot be deflected that the big brands are losing our
business it is the new and emerging hospitality brands which have grown in business without
hampering the steady growth of other established facilities of the hotel sector of UK (Ramiah,
Pham and Moosa 2017). In spite of the complications regarding government regulations, most of
the new hotels have been able to extract licence for setting up Wi-Fi facilities in their hotel
rooms. Other than that, specific factors like friendliness towards babies, pets as well as vehicle
parking facilities are something that is available with the boutique hotels also.

8
INDUSTRY ANALYSIS AND POSSIBLE ADAPTATIONS
Weaknesses
One of the major weakness of the hotels of UK, considering the two issues highlighted from the
Macro factors is that because of the dynamic increasein the influx of tourists, hygiene issues has
occurred in high rate with the hotel groups. According to the media reports of UK, housekeeping
staff is not adequate in comparison to the rooms in the hotels because of rich the guests had to
encounter issues like unavailability of clean Towers, properly setup bathroom including sewage
issues also. However, these issues can be partially Ignore for the moment considering the fact
that in spite of them, the number of tourists coming to the hotels have been increasing at a high
rate. However Glaesser et al. (2017), expects that in the long run if issues can become the factor
of discrimination among the hotels and the particular groups which will be able to avoid this
issues will come up front compared to the others. Various trade unions have started raising
concern regarding this condition of hotels.
All the brand image of many of the hotels in UK are increasing domestically, they will face a
major hindrance in expressing them as luxurious Hotel brands since most of them are having
Limited Global presence outside UK. This is why, when the saturation point in the hotel industry
of UK will arise, business outside UK will be able to attain long-term sustainability.
Opportunities for the hotels
Because of the expanding brand image, expansion opportunities are appearing before many new
and emerging Hotel brands of UK. The promising hotel industry of Germany has provided them
to open International branches at a low operational cost. Some of the properties of UK have been
experimenting with an upmarket room design as well as décor attracting potential customers
towards the budget hotel segment.

9
INDUSTRY ANALYSIS AND POSSIBLE ADAPTATIONS
Threats
Competition is one of the major threats to the hotels of UK with more than 3000 new hotel
brands emerging with major recognition in the last three financial years. Competition with bill
also come from the major Hotel groups like the Marriott group of UK will also be upgrading
their facilities in order to attract customers in more numbers (Urry 2016). Since there is pressure
for Rapid expansion on the hotel groups, they might try to avoid compliance with the
government regulations which will bring legal threats to them. The legal authority for
surveillance of the hotel groups before giving them licence for setting of new facilities is very
active because of which Unites trade union always remains cautious regarding the health as well
as safety requirements of customers in the hotels of UK.
3. Challenges faced in execution of tasks 1 and 2
The greatest challenge was to decide the most appropriate theoretical models for analysis of the
macro and micro factors. There have been several factors that could have been considered for
analysis in the micro analysis section. In this context, the selection of the two most important
factors for analysis had been a difficult task. However, the researcher chose those issues that will
have a future sustainable impact of the hotel sub sector. The data collection for such a wide
sector like travel and leisure was also difficult. However, in this case, the researcher analysed
academic journals for analysing the major business issues in this sector in the last decade. Based
on that, various aspects for discussion in the macro environmental analysis have been selected by
the researcher.

10
INDUSTRY ANALYSIS AND POSSIBLE ADAPTATIONS
4. Reference List
Al-Najjar, B., 2017. Corporate governance and CEO pay: Evidence from UK Travel and Leisure
listed firms. Tourism Management, 60, pp.9-14.
Bowie, D., Buttle, F., Brookes, M. and Mariussen, A., 2016. Hospitality marketing. Routledge.
Davies, N.J. and Weston, R., 2015. Reducing car-use for leisure: Can organised walking groups
switch from car travel to bus and train walks?. Journal of transport geography, 48, pp.23-29.
Duncan, T. and Cohen, S.A. eds., 2016. Lifestyle mobilities: intersections of travel, leisure and
migration. Routledge.
Glaesser, D., Kester, J., Paulose, H., Alizadeh, A. and Valentin, B., 2017. Global travel patterns:
an overview. Journal of travel medicine, 24(4).
Holden, E., 2016. Achieving sustainable mobility: everyday and leisure-time travel in the EU.
Routledge.
Metz, D., 2017. Valuing transport investments based on travel time saving: Inconsistency with
United Kingdom policy objectives. Case Studies on Transport Policy, 5(4), pp.716-721.
Ramiah, V., Pham, H.N. and Moosa, I., 2017. The sectoral effects of Brexit on the British
economy: early evidence from the reaction of the stock market. Applied Economics, 49(26),
pp.2508-2514.
Urry, J., 2016. Mobilities: new perspectives on transport and society. Routledge.
Winfield, I., 2018. An Exploratory Study of Work-Life Balance, Conflict and Enrichment
Experiences of Frontline Hospitality Employees in a UK Context. Journal of Undergraduate
Research at NTU, 1(1), pp.121-145.

11
INDUSTRY ANALYSIS AND POSSIBLE ADAPTATIONS