Contemporary Hotel Marketing Report: Environmental Factor Analysis

This report provides a comprehensive analysis of contemporary hotel marketing, focusing on the impact of macro-environmental factors in the Australian hospitality industry. It explores the influence of changing demographics, economic conditions, and intense competition on hotel operations and marketing strategies. The report also delves into how socio-cultural shifts, political and legal changes, and technological advancements shape the industry. It highlights the challenges faced by marketers in adapting to these dynamic environments, emphasizing the need for strategic responses to maintain competitiveness and achieve long-term success. The report concludes by summarizing the key findings and stressing the importance of continuous monitoring and adaptation to environmental changes within the hospitality sector.

CONTEMPORARY
HOTEL
MARKETING
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TABLE OF CONTENTS
Introduction......................................................................................................................................3
External macro environment............................................................................................................3
Impact of changing demographics...............................................................................................3
Changing economic conditions....................................................................................................3
Intense Competition.....................................................................................................................4
Society and culture changes and their impact on industry..........................................................4
Political legal changes.................................................................................................................4
Technology advancements...........................................................................................................5
Conclusion.......................................................................................................................................5
References........................................................................................................................................6
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INTRODUCTION
In the modern era, the competition among firms and businesses operating in the
hospitality industry has become highly intense. Now, it is no longer easy for organizations to
attract new customers and retain the old ones in the long run. Businesses are required to develop
effective strategies at regular intervals to deal with the increasing competition (Mok, Sparks, &
Kadampully, 2013). On the other side of this, the changes in macro environmental factors also
affect the overall operations and activities of businesses operating in the hospitality industry of
Australia. Factors such as technology, legal laws, socio-culture, demographics, etc. affect
companies to a great extent. The present report explores different macro-environmental factors
and their impact on activities of the business which are operating in the hospitality industry of
Australia.
EXTERNAL MACRO ENVIRONMENT
Impact of changing demographics
In simpler terms, demographics can be defined as the statistical study which is linked
with human population and its overall distribution in the society. In the present scenario, the
changes in demographic variables result in affecting areas such as sales and profitability of
businesses. The statement can be justified by the fact that in situations of rising in the aging
population, the demand of hospitality related services tends to reduce(Kandampully, Zhang, &
Bilgihan, 2015). On the other hand, increasing young population results in raising the demand
for travel, tour, and leisure related services.
Changing economic conditions
It can be stated that adequate economic growth helps businesses in the hospitality
industry of Australia to carry out the smooth flow of their business operations and activities.
Here, fall in discretionary income levels can result in lowering down the sales and profitability of
these businesses. In simpler terms, discretionary income can be termed as the income which is
left after spending and paying all the taxes(Solnet, Kralj, & Baum, 2015). Furthermore, people
spend their discretionary income on buying products and services of the hospitality industry.
On the other side of this, increase in interest rates also affects the operation of companies
operating in the hospitality industry. For example, increase in the rate of interest creates
obstacles for businesses in terms of growth and expansion. It can be asserted that taking loan
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from banks becomes difficult and thus, people restrict themselves to spend their money on
activities linked with leisure, travel, and tourism.
Intense Competition
The degree of competition among business has become highly intense, and the factor is
beyond the control of organizations. Furthermore, brand, substitute and indirect are the three
primary sources from where businesses face competition. The increasing and intense competition
is a severe threat to companies operating in the hospitality industry of Australia.
The rationale behind this is that intense competition provides customers with various
alternatives and options to choose from. At the same time, hospitality businesses are required to
operate with low prices to attract more customers and sustain in the marketplace. Companies are
even required to operate with the low-profit margins, and this is a significant obstacle to long-
term growth. Intense competition is a threat because it affects areas such as brand loyalty,
customer retention, and profit margins(Serić, Gil-Saura, & Ruiz-Molina, 2014). The marketers
are required to develop effective strategies which can help in getting a competitive advantage
over other market players. At the same time, they need to ensure that a lot cost of operations is
maintained and this is quite challenging.
Society and culture changes and their impact on industry
The changing socio-cultural patterns, social values, belief and lifestyle of customers have
also emerged as a big issue for marketers in the Australian hospitality industry. The changing
lifestyle and pattern of travel have resulted in making the study of consumer behaviour very
complicated for the markets. To sustain in the long run, companies in the hospitality industry are
required to offer products and services as per changing consumer behaviour, need, and demand.
However, it can be critically argued that businesses may face challenges in increasing revenues
and profits if the products and services are not according to demand of customers(McPhail,
Patiar, Herington, Creed, & Davidson, 2015). The marketers are required to carry out changes in
their marketing strategy and plans according to the changes in the socio-cultural environment
within the country.
Political legal changes
Legislation linked with the market, monetary and fiscal policies, social regulations,
government support to the industry are considered as some critical components of the political-
legal element of a macro environmental factor. The changes in laws and regulations encourage
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businesses to carry out modifications in their existing processes and activities(Assaf & Agbola,
2014). The hospitality organization may also face legal consequences and penalties in situations
if the laws and regulations are not addressed properly.
Changes in the rate of taxes and interest may force customers to lower down their
spending on activities linked with leisure, travel, and tourism. At the same time, political unrest
in the country may restrict international travellers and tourists to visit that particular nation. Such
kind of situations adversely affects the overall operations, sales, and revenues of small, medium
and large enterprises operating in the hospitality industry(Buhalis & Crotts, 2013). Some other
legal issues faced by hospitality industry include health regulations, the degree of foreign
investment, liquor licensing, landing taxes, etc. At the time of carrying out marketing activities,
it is required by marketers to consider the legal laws and regulations developed within the
industry and country..
Technology advancements
In the present scenario, the emergence of technology has affected the overall lifestyle and
spending of people to a great extent. On the contrary of this, it can be critically argued that
technology is considered as a mixed blessing as it has both advantages as well as some
disadvantages. The use of technology has resulted in making the entire purchasing process of
customers more convenient. At the same time, businesses in the hospitality industry of Australia
are now available with a potential platform to carry out marketing and promotion of their
products and services(Wijesinghe, 2014). Tools such as email marketing, social media, internet
marketing are highly effective in terms of attracting customers. On the other hand, companies are
required to upgrade technology at regular intervals and this result in increasing the overall cost of
operations.
CONCLUSION
It can be inferred that the macro environmental factors are beyond the control of
businesses. To sustain in the highly competitive marketplace, it is required by companies to
examine the changes in five major marketing environments. It is also suggested that businesses
should monitor these changes and should develop effective strategies to lower down the adverse
effect of these changes.
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REFERENCES
Assaf, A. G., & Agbola, F. W. (2014). Efficiency analysis of the australian accommodation
industry: a bayesian output distance function. Journal of Hospitality & Tourism Research
, 116-132.
Buhalis, D., & Crotts, J. (2013). Global alliances in tourism and hospitality management.
Routledge , Abingdon-on-Thames.
Kandampully, J., Zhang, T., & Bilgihan, A. (2015). Customer loyalty: a review and future
directions with a special focus on the hospitality industry. International Journal of
Contemporary Hospitality Management , 379-414.
McPhail, R., Patiar, A., Herington, C., Creed, P., & Davidson, M. (2015). Development and
initial validation of a hospitality employees’ job satisfaction index: Evidence from
Australia. International Journal of Contemporary Hospitality Management , 1814-1838.
Mok, C., Sparks, B., & Kadampully, J. (2013). Service quality management in hospitality,
tourism, and leisure. Abingdon-on-Thames: Routledge.
Serić, M., Gil-Saura, I., & Ruiz-Molina, M. E. (2014). How can integrated marketing
communications and advanced technology influence the creation of customer-based
brand equity? Evidence from the hospitality industry. International Journal of Hospitality
Management , 144-156.
Solnet, D., Kralj, A., & Baum, T. (2015). 360 degrees of pressure: The changing role of the HR
professional in the hospitality industry. Journal of Hospitality & Tourism Research , 271-
292.
Wijesinghe, G. (2014). Reimagining the application of sustainability to the hospitality industry
through a virtue ethics framework. Journal of Sustainable Tourism , 31-49.
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