Understanding Customers in Hospitality Industry - SWOT and PESTEL Analysis

This report covers micro and macro aspect of customer behaviour while using theories and models to analyse customer behaviour specifically in hospitality sector. It includes SWOT and PESTEL analysis to understand internal and external business environment.

Understanding Customers

Table of Contents
INTRODUCTION...........................................................................................................................3
Main body........................................................................................................................................3
SWOT analysis of tourism industry.......................................................................................3
Understanding the micro aspect of consumer behaviour.......................................................4
PESTEL analysis for tourism industry...................................................................................5
Understanding the macro aspect of consumer behaviour.......................................................6
CONCLUSION ...............................................................................................................................7
REFERENCE...................................................................................................................................8

INTRODUCTION
It is essential for every firm to analyse and understand the needs and wants of their
customers well for the expansion of business. Analysing customers behaviour while purchasing
the products and services offered by companies will help them to analyse what all factors
influence them to increasing their purchasing power (Heinonen and Medberg, 2018). On the
other hand, analysing customers behaviour after their purchase decision will help companies to
analyse whether their customers are satisfied or not so that they can make changes accordingly.
The following report cover micro and macro aspect of customer behaviour while using theories
and models to analyse customer behaviour specifically in hospitality sector.
Main body
SWOT analysis of tourism industry
Strengths-
Safe environment- Tourist can attract more
on such destinations or locations which are
having safe environment such as terror free,
less criminal activities and many others.
Most of the hotels in UK maintain good
securities to mitigate their hate crimes as
much as possible.
Travelling convenience- Tourists also
attracted to those destinations which have
good transportation facilities and have
appropriate travelling convenience. In
context of UK, most of the hotels are located
at towns and main city where transportation
facilities are easily available.
Weaknesses-
Less management skills- Employees in
tourism sector are having customer service
skills but they are lacking behind to gain
managerial skills. Hence, the staff members
of most of the hotels need supervisory
control who assist them. Without supervisory
control they are unable to manage their tasks.
High turnover rate- Tourism industry of
UK is consist of having high turnover rate
due to many reasons such as lack of
employee relations, lack of employee
satisfaction and many others (Shao and et.
al., 2020).
Opportunities- Threats-

Personalize experience- Most of the
hospitality companies treat in same manner
to their most of the customers. Hence, it is
essential for every firm to analyse and
understand the needs and wants of their
customers well for the expansion of business.
Higher social media promotions- Today
most of the customers use social media
platforms to gather any hospitality
information. Hence, its a good opportunity
for tourism company to promote their
business and products well on social media
to gain attention of their customers.
COVID pandemic- Due to lock downs,
social distancing and many other negative
effect of this pandemic impacts negative
upon tourism industry by reducing their
customers and it even cause shut down of
various companies.
High competition- Tourism industry in UK
is having very high competition which
means most of the small scale companies
introduce low quality of products and
services to in suitable prices to jump in the
competition environment.
Understanding the micro aspect of consumer behaviour
Customers behaviour regarding tourism industry can be identified by micro environment.
Most of the customers prefer to buy those hospitality services which promise them regarding
their security and protection against any criminal or any unlawful activities. Hence, it is analysed
that customers of tourism industry prefer to select those hotels only which provide them safe
environment (Wali and Nwokah, 2018). Therefore, it is essential for hotels to focus on their
security conditions and attract more customers. Secondly, customers also look for travelling
convenience so that they will not face any issue to travel from one place to another within their
selected destination for travelling. Hence, most of the hotels like Premier Inn, rose wood and
many others focus to open their hotels in those areas where transportation facilities are good to
satisfy their customers and make their customers comfortable to reach at their aimed
destinations.
It is also evaluated from the above SWOT analysis that lack of managerial skills within
employees also impact upon customer experience. For example, in case a hotel is having lack of
managerial skills employees which are unable to manage their task by them self without any
supervision are unable to handle the issues and provide appropriate services to their targeted
customers. On the other hand, every customer is having different personality and different

behaviour which is essential to manage by every hotel. It is found that when customers are
treated individually according to their specific behaviour and needs then they get more satisfied.
It is also evaluated with micro analysis of tourism industry that most of the tourists use
social media platforms to gather any information regarding their desired destination. They prefer
to see reviews for destination and hotel, they also prefer to see pictures and comments of other
customers regarding their personal experience and many others. Hence, this help hotels to focus
more upon their social media marketing activities to attract more customers (Jin, Yao and An,
2020).
PESTEL analysis for tourism industry
Political factors- Most the countries like UK is having less restrictions regarding their
trading activities. Hence, this will be beneficial for customers to travel from one country to
another without having much restrictions. On the other hand, most of the tourists can claim
refund for their purchasing activities which they found inadequate and mistaken from hotel's
side.
Economical factors- in context of UK, they are having good employment rate which
help hotels to hire well skilled employees according to their requirements. This will also help
customers to gain high level of satisfaction because high skilled employees will focus to provide
high services to their targeted customers.
Social factors- In context of UK, the purchasing power of their customers are high and
they focus to purchase high quality of goods and services to improve their standard of living.
This will influence hotels to monitor the services and products which they offer to their
customers to gain high customer satisfaction (Li and et. al., 2018).
Technological factors- Using advance tools and machines help hotels to attract more
customers and manage their work effectively. For example, using face recognition tool to
identify whether the customer has arrived earlier or not.
Environmental factors- This is one of the most important factor which must be focused
by tourism industry. UK is having effective environmental conditions and attractive and
adventurous destinations to attract their customers. CSR activities and waste management of
hotels also help them to gain higher customer satisfaction.
Legal factors- It is also essential for every company to follow all legal laws and rules
made by their government. In context of tourism sector, Health and Safety Law, 1974,

recommend that every hotel must serve those food items which do not impact bad upon their
customers health instantly. Secondly, Data Protection Act, 1998, consist of protecting personal
details of customers secure from third party.
Understanding the macro aspect of consumer behaviour
It is essential to analyse how customers behave for a particular hospitality service and
what all impacts of external business environment can impact upon customers behaviours and
attitudes. From the above PESTEL analysis it is evaluated that political factors of opening
borders and freeing the customers to enter other country will help to satisfy hospitality customers
(Zhong, Lomas and Worth, 2021). Refunds to customers due to any mistake or mismanagement
from hotel's side will help hotels to explain their customers that they are not working for their
benefit only but their customers are also important for them. Hence, refunds will help to gain
good experience. On the other hand, good employment rate of UK will help hotels to hire skilled
and talented employees which further help to analyse their customers needs and wants and work
accordingly to satisfy them effectively.
Customers also prefer to buy those hospitality services whose technological factors are
good. Secondly, they get aware about many hotels on online mode specially on social media
platforms. Hence, it is beneficial for hotels to attract more customers by uploading good images
and sharing good reviews on social media platforms to influence customers to use their products
and services. Legal factors such as laws and rules and regulations are made for protecting
employees and customers rights at hospitality sector (Langgat and et. al., 2021). For example, in
context of Premier Inn hotels, they are following various laws and one of the law is Furniture and
Furnishings (Fire) (Safety) Regulations 1988, which consist to have those safety measures like
fire extinguisher and medical kit at every floor of hotel. Hence, Premier Inn hotels also have
those furniture which did not spread fire and do not cause release of toxic gasses during
accidental fire.

CONCLUSION
From the above information it is concluded that SWOT and PESTEL analysis is help to
analyse internal and external business environment which further help a company to make those
strategies and decisions which further help them to gain customer satisfaction. Understanding
customers behaviour and attitude while purchasing or using any product or services in hospitality
sector will help them to analyse whether their services are appropriately served or not to fulfil
their customers needs. Hence, this will help them to make changes in their products and services
to satisfy their customers. It is also concluded that legal law such as following Health and Safety
Act, 1974, Furniture and Furnishings (Fire) (Safety) Regulations 1988 and many others helps to
protect the rights and employees and customers to use any particular hospitality products or
services.

REFERENCE
Book and journal
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