Hospitality Industry Analysis

This assignment delves into the analysis of the hospitality industry using both PESTLE and SWOT frameworks. It examines the external factors (political, economic, social, technological, legal, and environmental) impacting the industry through PESTLE analysis. Furthermore, it conducts a SWOT analysis to evaluate the internal strengths and weaknesses as well as external opportunities and threats faced by hotels within this sector. The assignment concludes with recommendations for hotel owners on attracting customers, retaining employees, and adapting to industry trends.

CONTEMPORARY
HOSPITALITY
INDUSTRY

Table of Contents
INTRODUCTION...........................................................................................................................1
MAIN BODY...................................................................................................................................1
P6 PESTLE Analysis of Hospitality Industry.............................................................................1
P7) SWOT Analysis....................................................................................................................3
P8) Current and Future Trends in the Hospitality Industry.........................................................4
CONCLUSION................................................................................................................................5
REFERENCES................................................................................................................................6

INTRODUCTION
Hospitality Industry can be defined as the group of businesses which provides various
services to their customers such as accommodations, food and beverages and travel and tourism
(Hospitality Industry: Definition & Overview, 2019). Along with this, customer satisfaction is
given the first preference by the businesses covered under this industry. The following
assignment is based on Hilton Hotel Resorts which provides accommodation, food and many
more services to their customers. The assignment will focus on the macro environmental factors
on the working of Hospitality Industry with the help of PESTLE and SWOT Analysis. In
addition to this, the current and future trends in the Hospitality Industry will also be explained in
this assignment.
MAIN BODY
P6 PESTLE Analysis of Hospitality Industry
PESTLE Analysis can be defined as the framework used to analyse the impact of macro
environmental factors on the working of an organisation, economy or industry as whole. The
following analysis will be used in order to know about the impact of macro environmental
factors on the working of Hospitality Industry presented as under:
Political Factors: It refers to the those factors which impacts upon the working of an
organisation due to changes in the government policies such as political stability, instability,
corruption, foreign trade policy, tax policy, environmental law and many more.
 Hospitality Industry is the most important source of income for the government of UK
and the government is making suitable policies for the development of businesses
covered under this category. So this is an opportunity for the companies to make
advantage of (Radojevic, Stanisic and Stanic, 2015).
 The negative impact is because of terrorism which has reduced the level of tourism to
much extent and has limited the source of income for the government.
Economical Factors: These are those factors which impacts upon the working of an
organisation due to changes in the economic factors such as inflation rates, disposable income of
consumers, unemployment rates, interest rates and many more.
1

 Tourism in UK is popular due to many purposes and it has also become a source of
income for the country. IT has impacted positively as the currency rates gone up and has
enhanced the growth and development of the economy.
 In case of inflation, it will lower down the tourism because of high prices. So this will
impact negatively on the working of an organisation as well as the industry.
Social Factors: These are the factors which impacts upon the working of an organisation due to
change in the taste, preferences, feelings, beliefs, cultures of people of an area.
 These factors has direct impact upon the working of this industry as the services are for
people so it is important to make them as per the needs and demands of their customers.
 It is also possible that companies in this industry may not be able to analyse properly the
needs and demands than it can also impact negatively on the working of these companies
(Ali, Amin and Cobanoglu, 2016).
Technological Factors: These are the factors which impact upon the working of an organisation
due to change in the technology such as improvement in the technology of rival firm,
improvement in the technology of producing goods and services and many more.
 By making use of latest technology, it will become easy for employees to communicate
with each other. Here is a positive impact of technology on the working of organisations
in the hospitality industry.
 There are also chances of loss of data so with the use of technology. In this way, the use
of technology may also impact negatively on the working of companies in this industry.
Legal Factors: These are those factors which impacts upon the working of an organisation due
to some specific rules and laws made by the government of a country.
 Following the rules and regulations made by the government will help the companies in
avoiding the intervention made by the government in their working which is its positive
impact (Claveria, Monte and Torra, 2015).
 Companies in this industry needs to hire a legal advisor which will provide guidance to
the companies regrading how to avoid the intervention of government in their working.
The negative impacts is the cost which the company will incur on hiring the legal advisor.
Environmental Factors: These are those factors which impacts upon the working of an
organisation due to bad impacts of working of companies on the environment. As the companies
working under this industry do not carry out any kind of production process so the companies do
2

not impact upon the environment. However contribution made by these companies towards
environment will be helpful as it will increase the brand awareness of the companies (Solnet,
Kralj and Baum, 2015).
P7) SWOT Analysis
The following analysis can be defined as the framework which is used to evaluate the
competitive position of an organisation to develop strategic planning. This analysis focuses on
four dimensions which are Strengths, Weaknesses, Opportunities and Threats. The following is
the description of SWOT Analysis of Hilton Hotels Group:
Strengths:
 In the strength of this Hotel, the brand recall is considered because of its visibility, many
locations and excellent advertising.
 The management held by Hilton Hotels Group is world class that keeps on bringing
innovative ideas to attract the customers and retain the existing customers.
 The business has started to develop in the Asian Continent which is its strength as the
revenue and the customer base of the company will increase (Kandampully, Zhang and
Bilgihan, 2015).
Weaknesses:
 In continents such as North America and Europe the network of this hotels group is not
much wide which is its weakness as it is impacting upon the incomes and revenues of the
company.
 However the business of this hotels group have high brand recall but on the other hand it
is having only a limited market share which is its weakness.
 In North America, Europe and Asia, the hotel have limited presence so due to different
governmental policies the working of the government is effected globally which is
another weakness of Hilton.
Opportunities:
 The expansion in Asia has created opportunities for the Hotels Group as it can now
increase its market share and get access to the new markets.
 It is also preparing program offices to plan first line representatives to all the more
adequately use basic leadership specialist.
Threats:
3

 Due to already established hotels, there are threats of non acceptance of services provided
by this Hotel Group.
 The threat is also of new entrants in this industry as it does not have much barriers to
enter.
P8) Current and Future Trends in the Hospitality Industry
Current Trends in the Hospitality Industry:
Globalisation: The current trends of Hospitality Industry includes globalisation because the
travelling costs from one country to another have become more easy and economical. Due to
this, tourism has risen to a certain extent and has increased the chances of growth and
development for the Hotels. It can also impact negatively on the working of the company as it is
possible that the company may analyse the environment of other country in a wrong way which
could provide wrong results to the company and adversely effect all the strategies and policies of
the company.
Safety and Security: It has also become the part of Hospitality Industry due to the increasing
terrorism activities. So the businesses covered under this industry are also increasing their focus
on the safety and security of their employees. Security of the guests must be at the first
preference of every service provider. Like wise the security at the airports invests huge amount
in order to make good the safety and security of people (Kim, Vogt and Knutson, 2015). The
major disadvantage of this trend is that because of increased security, the terrorist activities are
not stopping which puts questions on the security.
Technology: It can be said as a force of change that drives the present efficiency of working of
an organisation to the next level so that the revenues and incomes of the company could be
increased. The bad impact of technology is about the non adoption of change by the employees
of the company as the change may be complex or the behaviour of employees is rigid.
Future Trends in the Hospitality Industry:
 More importance will be given on making the use of internet and technology so as to give
severe competition to the rival companies. On the other hand, it can also give rise to some
wrong information on the internet which can spoil the image of the company.
 It is also possible that in future, the hotels may include various other facilities such as
casino, shops, theatre, parks and many more so that the customers may avail them and the
income of the Hotels could be increased. It can also increase the costs of the company as
4

may not be possible that customers will surely have these facilities of the company
because of the reason of their loyalty to some other companies in case of foods and many
more.
 The services of the Hotels can also be improved by converting them into the Intelligent
Hotels. It can be done by making changes with advanced technology such as using
fingerprints of the guests for the purpose of checking in and checking out timings (Lopes,
2016).
 Increasing the salaries of employees in order to reduce the employee turnover rate.
CONCLUSION
From the above assignment it has been concluded that Hospitality Industry is an
important part of an economy. With the help of PESTLE Analysis, the external environment of
the Hospitality Industry is analysed which will help in eliminating the negative impacts arising
out of those factors. Further it is also concluded that SWOT Analysis is also done to analyse the
internal and external capabilities of the Hotel which is good from the above discussion made.
Moreover it is also concluded that the owners of the hotels should focus on making the potential
customers of the hotel into real customers and should focus on adapting the ways by which the
company can best retain their employees and have competent staff. Hotels must analyse and
adapt the current and future trends in the Hospitality Industry and make right adaptions as well as
they should make use of new technologies in order to achieve competitive advantage over their
competitors.
5

REFERENCES
Books and Journals
Ali, F., Amin, M. and Cobanoglu, C., 2016. An integrated model of service experience,
emotions, satisfaction, and price acceptance: an empirical analysis in the Chinese
hospitality industry. Journal of Hospitality Marketing & Management. 25(4). pp.449-
475.
Claveria, O., Monte, E. and Torra, S., 2015. A new forecasting approach for the hospitality
industry. International Journal of Contemporary Hospitality Management. 27(7).
pp.1520-1538.
Kandampully, J., Zhang, T. and Bilgihan, A., 2015. Customer loyalty: a review and future
directions with a special focus on the hospitality industry. International Journal of
Contemporary Hospitality Management. 27(3). pp.379-414.
Kim, M., Vogt, C. A. and Knutson, B. J., 2015. Relationships among customer satisfaction,
delight, and loyalty in the hospitality industry. Journal of Hospitality & Tourism
Research. 39(2). pp.170-197.
Lopes, M., 2016. The hospitality industry (Doctoral dissertation).
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.
Solnet, D., Kralj, A. and Baum, T., 2015. 360 degrees of pressure: The changing role of the HR
professional in the hospitality industry. Journal of Hospitality & Tourism Research.
39(2). pp.271-292.
Online
Hospitality Industry: Definition & Overview. 2019. [Online]. Available Through:
<https://study.com/academy/lesson/hospitality-industry-definition-overview.html>
6