Impact of External Factors and Trends on Hospitality Industry

This report provides an analysis of the contemporary hospitality industry, focusing on the impact of external factors, SWOT analysis, and current and potential trends. It begins with an introduction to the industry's significance in various economies and its role in providing leisure to tourists. The report then delves into the influence of external factors, utilizing a PESTLE analysis for TUI hospitality company to examine political, economic, social, and legislative factors. Furthermore, it explores the implications of current trends, such as changing consumer lifestyles, brand development, and the need for companies to respond effectively to market changes. The analysis highlights the importance of market research, research and development, and technological investments to enhance service quality and maintain a competitive edge. The report concludes by emphasizing the need for both internal and external environmental analysis and the importance of employee skill development to improve overall performance and promote sustainable operations.

The Contemporary
Hospitality Industry

Table of content
Introduction
Impact of external factors on hospitality industry
Impact of SWOT to prepare better decision for future
Current and potential trends and developments affecting
the hospitality industry
Conclusion
Reference

Introduction
Hospitality industry has become one of the major contributors
that have enhanced economy of various countries as it attract
tourist from national as well as international countries.
Contemporary hospitality industry has become the independent
sector which effectively participates in the dynamic environment.
It functions to provide leisure to tourist so that they can
thoroughly enjoy their vacations.

External factor that affected the development of
organization
External factor of the environment of business plays an
important role as it helps to overview the actual scenario based
on which strategies are devised. This effectively wipes out the
competition and maximizes the sustainability as well as
profitability for longer duration. Pestle analysis is used for TUI
hospitality company which are defined beneath:

Cont..
Political: : Political factor involve rules and regulation set up by
local authorities which can directly impact the growth of whole
tourist industry. As TUI company mainly operates in the
developed part of economy where rules are stable and less likely
affect the performance of company. Although manager of
respective company look forward to make significant use of
funds and expand their operation in an emerging economy where
growth rate is high but is politically unstable.

Cont..
Economical factor: It comprises of the disposable income of
consumer, employment rate, inflation rate which result in affecting the
primary activities of tourist sector such as transportation, retail trade
and restaurant. Herein, TUI group experiences slope in the revenue
due to economic fluctuations.
Social factor: It encompasses cultural as well as demographical part
of the geographic unit that contribute in affecting the performance of
hospitality company.

Cont..
Legislative factor: It involves laws or legislation which is
designed by local authorities in favour of different stakeholders
such as society, employees and surrounding. Before
diversification it is essential for the manager of company to
monitor external influence effectively and analyse different
legislation like imposition of taxes, transfer fair remuneration and
abide by health and safety laws. Therefore, adequate
implementation helps in overall success.

SWOT analysis

Cont…

Implications of current and potential
trend in hospitality industry
With the rapid change in external environment existence of
globalisation, digitalisation, increase in competition and trends are
constantly changing. It is vital for companies that fall under
hospitality industry to carry out effectively analyse of current as
well as potential trend to maintain the systematic position of the
company. Some of the drivers that lead to the change in trend in
context to TUI group are discussed below:

Cont..
 Frequent change in the lifestyle of consumer: Taste, preferences and
trend of people changes on the continuous basis. It influences the
operations of company leading to change in performances. Thus, it is
necessary to understand latest requirement of customer and respond
accordingly.
 Develop brand: To develop the brand, promotion techniques are used
by TUI company to maintain the economic activity in their diverse
services like hotel, airlines, restaurant and so on. It helps in building the
unique position in the minds of customer that helps to retain existing
customer as well as track potential market successfully.

Responding to trend:
It is very essential for TUI company to favourably
respond towards the changes. As it is a part of hospitality
industry that is flooded with huge competition. Thus the
company needs to constantly focus on the market
research. In addition to that research and development
techniques help to analyse the lifestyle and carry out
investment in new technology. Therefore, it is desirable
way to extend supreme level of services for the
convenience of customer.