PESTLE Analysis: High End Hotel Expansion in UK Hospitality Industry

This report provides a comprehensive market analysis for the expansion of a High End Hotel within the UK hospitality industry. It examines critical factors impacting expansion, including political instability, technological advancements, and economic fluctuations. The report employs a PESTLE analysis to assess risks and opportunities, considering governmental regulations, technological integration, and economic trends like interest rates and exchange rates. It highlights the importance of market research, customer preferences, and competitive analysis. The report also discusses the economic contributions of the High End Hotel sector, emphasizing its role in employment and GDP growth. Furthermore, it evaluates the impact of technological tools, online marketing, and customer reviews on business operations and expansion strategies, providing insights for successful market entry and sustainable growth in the UK.

ESSAY

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
MAIN BODY...................................................................................................................................1
Political...................................................................................................................................1
Technological.........................................................................................................................2
Economic................................................................................................................................3
CONCLUSION................................................................................................................................5
REFERENCES................................................................................................................................7

INTRODUCTION
Expanding business functions is increasing market share and customer base but the
expansion plan of company comes with risk and uncertainties. Expanding business in hospitality
industry of UK can helps the firm in growing market but is risky process as it involves threats,
increasing interest rate, changing use of technology etc. The report will outline political
technological and economic factors of High End hotel of UK in order to develop market analysis
for expansion plan of organisation is one of the leading luxury hotel. In addition, the report will
evaluate the factors and example which can be risky for the hotels by comparing it to existing
hospitality services to services of High End hotel.
MAIN BODY
Market analysis plays an important role in defining conditions for expansion plans.
Analysing market before expanding any organisation in UK plays an important role as it helps in
managing successful business operations. It helps in evaluating uncertainties which can arise
specially due to external factors of organisation. This is important for an organisation to
implement the use of strategic thinking before expanding enterprise because it helps in
measuring risk with the help of strategical tools such as, PESTLE, Porter’s five forces etc. For
expanding business in UK market, the most effective strategic tool is PESTLE as it assists the
firm in evaluating risk which can arise due to political instability, advancement in technology,
changes in economic factors. Facilities provided by hotels in context to luxury villa amenities to
guests are like, open living areas, private guest room and garden, private terraces high speed
internet etc. For instance, Hilton the leading hotel of High end hotel chain provides Working
desk in every room with iMac Desktop on the other hand Marriott provides Sony play station 4
and satellite connection for entertainment of guest. Children are at the forefront of High End
hotel like Holiday inn, Hilton for which the hotels enable kid's club facility where families can
play and spend leisure time with their kinds playing football and board games, drawing etc. For
expanding business of High End Hotel in UK, Hospitality industry, the enterprises will focus on
evaluating current markets trends in order to reduce the chance of future uncertainties. The
analysis of three macro factors of High End Hotel are as follows:
Political
Political instability is the most common factor which interrupt business environment.
These are those factors which keep on changing as per governmental regulation and political
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factors (Shaw, Bailey and Williams, 2011). Further, changing political factors creates huge
impact of High End Hotel and its services. Political instability, inflation directly affects
functioning of hotels. The changing government regulations in UK for hospitality industry aim at
protecting interest of travellers. There is various governmental regulation which aims at
protecting interest of travellers and luxurious hotel. It is mandatory for the all the hotels to
comply with regulations like Factories Act 1948 which is enforced to ensure safety of workers
working in Hotels and to prevent hazardous accidents which can be life threatening. This act by
UK government is focused on providing stable working conditions to employee by establishing
safety measures (Jin-zhao and Jing, 2016). This regulation for High End Hotel of UK is for
effective expansion because it aims at providing health, safety welfare, and all the rights which
aims at protecting interest of employees. Further, minimum wages Act 1948 helps in determining
industry fixed wage which the firm is liable to pay to employees. This regulation by government
in focused on promoting equality and Diversity in Hotel business. In addition, there exists
Industries Dispute Act which is enforced by government to enable technology and machinery in
industry with peaceful resolution.
Moreover, there are different policies of seeking licence from UK government for the
services of High End Hotel like eating house license, bars, swimming pool, fire prevention,
building, boilers and cold storage. Therefore, it is important for the Five star hotels to seek for all
the license before expanding their business in UK because it is the only factor which helps the
firm in maintaining stability in business functions. Expansion plan of hotels in industries is risky
because expansion of High End hotel needs huge investment with no certainty of stability
because it is related to overseas expansion. Unpredictability of marketing functions, taxation,
industrial disputes and host market environment is the riskiest process of expansion plans which
lies under political instability. Tax policy, labour law and tariffs are some common factors which
comes under the political changes that influences business operations of High End Hotel.
Technological
Advancement in technology plays an important role in enhancing organisations functions
as it helps the business enterprise in making operational management easy. Like in UK, High
End Hotel, management and staff members have implemented the use of face prima software
which helps staff in keeping appropriate record of hotel management staff. In accordance to,
hospitality services of luxurious hotel, it has been determined that most crucial part of
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management is to manage record of check inn and checkout process which makes management
process easy for staff and guest. Therefore, High End hotel in industry offers online booking
system which helps the travellers in comparing price and services. This comparison helps the
customers is booking hotel according to their satisfaction. The technological advancement assists
the firm in connecting with global level customers (Stewart, Bramble and Ziraldo, 2018). It helps
in displaying about the services which helps in attaining competitive advantage. Apart from this,
it has become important for High End Hotel to analyse about the use of technological tool in
hotel room for making accommodation luxurious for travellers. With the help of analysis, before
expansion plan, it has been determined that in UK High End hotel has specific standard for
providing accommodation facility in every room. Like, every room of hotel has customized beds,
guest couches, television, music, fridge, highly equipped wash rooms, etc. However, with
advancement in technologies, it is important for High End hotel to modify its services according
to standards of UK hospitality industry because it is only actor which helps the firm in making
expansion successful.
Apparently, High End Hotels in UK are focused on reducing barriers and intermediaries
which connect hotels and guest, therefore when expanding business functions, the focus of hotels
is to make use of online marketing methods which will helps the firm in creating awareness
across the globe. Implementing the use of technology is the best strategy which assists the High
End Hotel in managing advanced business functions. Further, use of technological tools is the
most effective technique as it provides control over fluctuation because technological up-
gradation helps the enterprise in managing uncertainties easily (Assaf and Cvelbar, 2011). It is
important for the hotel to ensure that its services and facilities are according to UK hospitality
industry because not updating the use of tools and technique can hamper the success of
expansion plan. Thus, technological factors in High End leads to automation and various types of
innovations in hospitality services.
Economic
Economic factors of UK keep on fluctuating because of rising prices and increasing
interest rates. However, demand for tourism from 2016 in UK has been increasing which denotes
increasing return to High End Hotel of hospitality sector (Boella and Goss-Turner, 2013).
Moreover, the labour market of UK is growing strong for hospitality industry which denotes
positive returns and employment in hospitality especially in luxurious Hotels. The increasing
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interest of people in High End Hotel represents positive side for expansion plan. Further, it has
been analysed that guest in UK demands more from existing hospitality services therefore it is
important for the luxurious Hotel to evaluate change customer taste over hospitality services in
order to make expansion plan of organisation effective and successful. It has been analysed that
travellers in UK demands luxurious accommodation due to many hotels makes changes in
services according to needs and wants of guest. Therefore, before expanding it is important for a
High End Hotel to conduct market research in order to evaluate preferences of travellers over
accommodation and pricing. This is the best strategy which helps in making successful
expansion plan. The drop in financial system of UK is minimum and controlled from past many
years which denote that expanding High End hotels can be beneficial. Exchange rate of UK
keeps on fluctuating which can be major drawback that can lead to unpredictable problems
(Jones, Hillier and Comfort, 2016). The turmoil in exchange rates impacts the pricing strategy of
industry which can be risky for organisation because during expansion the firm has to implement
the use of low pricing strategy to attract travellers to create awareness in markets of UK. The
factors that affect the economic environment of High End Hotel are, exchange rates, inflation
rate and rate of interest. However, the changing rates can impact packages, schemes which plan
to attract guest of new market.
Apart from this, analysing competition of UK hospitality industry plays an important role
for High End Hotel because its helps in determining impacts from different sources such as
direct which is related to employment and labour laws. Indirect impact which is linked with
purchase of goods and services which are required for hotel. It is factor which is related to
domestic supply chains of hotels. Analysing the procedure helps the enterprise in evaluating risk
involved in managing purchase of services. Lastly, induced impacts which are related to direct
supply chain which is stimulates between hotel and guest. Contribution of economic factors is as
follows:
 Hospitality industry provided employment to 2.9 million people in which 2
approximately 1.5 million people are employed in High End Hotel.
 Net employment growth of high End Hotel is 17 percent since 2010 to 2014.High End
Hotels are considered as priority of hospitality industry of UK and contributed maximum
to economic development in comparison to all other industries. The industry contributed
57 billion pound to gross domestic product of UK in 2014 which is equal to 4 percent of
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overall GDP of UK (A report prepared by Oxford Economics for the British Hospitality
Association, 2015).
 In 2014, High End Hotels were not at peak and did not contribute lot and therefore
hospitality industry was ranked 11 out 17 leading industries of UK. However, with
increasing opportunities and demand of hotels the industry led to remarkable growth and
became major contributor to economy.
For instance, Marriott targets specific customers like, honeymooners, premium business
travellers and upper-class families. The strategy which is used by hotel to attracts worldwide
travellers is value based pricing with quality food. The estimated revenue of 2015 were 14.4
billion pound. The high end customers are sensitive for facilities and services instead of price.
However, high end Hotels focuses on displaying family packages and discounts through emails
and official websites which is the best method used by hotels to attract travellers across the
globe.
Hence, it can be summarized that economic contribution by High End Hotel in UK is remarkable
and continuously increasing. The growth and development of luxurious hotels is supported by
government and citizens of UK, as it is the sector which provides maximum job opportunities to
people of UK. Expansion plan of Hotels in accordance to economic condition denotes positive
returns because establishing hotels in country will help in generating more employment
opportunities and will also contribute to GDP which will aid the maintenance of financial
stability of UK. Nevertheless, customer reviews enable high End Hotel in analysing real facilities
with real time which is most effective tool for analysing guest satisfaction. For instance, Lady
Dana C visited Marriott for Christmas treat and booked a room for couple and she stated that
entire setting was beautiful and decoration of hotels was highly Christmassy. According to her
room was small but cosy and comfortable. Apart from this, one individual stated about his
experience for London Marriott Hotel Park lane on February 2018 where he described his
experience with work Epic in which discussed about easily accessible to all the hotspots,
impeccable service, spacious rooms and elegant décor (London Marriott Hotel Park Lane. 2018).
CONCLUSION
The report summarised the expansion plan of High End Hotels in UK, for it evaluated,
political, economic and technological factors of High End Hotels of UK. From the essay, it has
been analysed that compliance with all the political changes helps the business in maintaining
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stability of functions. Further, the essay outlined the technological factors in which it stated that
hotel management staff of High End Hotel of UK implements the use of every possible
strategical tools to manage staff and its guest. Thus, the essay concluded with economic factors
of High End Hotel which keeps on fluctuating but denotes that there is financial stability in UK
for hospitality industry as it provides employment opportunities and contributes to Gross
Domestic Product of country.
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REFERENCES
Books and Journals:
Shaw, G., Bailey, A. and Williams, A., 2011. Aspects of service-dominant logic and its
implications for tourism management: Examples from the hotel industry. Tourism
Management. 32(2). pp.207-214.
Boella, M. and Goss-Turner, S., 2013. Human resource management in the hospitality industry:
A guide to best practice. Routledge.
Kang, K.H., Stein, L. and Lee, S., 2012. Consumers’ willingness to pay for green initiatives of
the hotel industry. International Journal of Hospitality Management. 31(2). pp.564-572.
Jones, P., Hillier, D. and Comfort, D., 2016. Sustainability in the hospitality industry: Some
personal reflections on corporate challenges and research agendas. International
Journal of Contemporary Hospitality Management. 28(1). pp.36-67.
Assaf, A. and Cvelbar, K.L., 2011. Privatization, market competition, international
attractiveness, management tenure and hotel performance: Evidence from Slovenia.
International Journal of Hospitality Management. 30(2). pp.391-397.
Stewart, J.W., Bramble, L. and Ziraldo, D., 2018. Key challenges in wine and culinary tourism
with practical recommendations. International Journal of Contemporary Hospitality
Management. 20(3). pp.303-312.
Jin-zhao, W. and Jing, W.A.N.G., 2016. Issues, challenges, and trends, that facing hospitality
industry. Management science and engineering. 3(4). p.53.
Online
A report prepared by Oxford Economics for the British Hospitality Association. 2015. [Online].
Available through:
<http://www.bha.org.uk/wordpress/wp-content/uploads/2015/09/Economic-
contribution-of-the-UK-hospitality-industry.pdf>.
London Marriott Hotel Park Lane. 2018. [Online]. Available through:
<https://www.tripadvisor.in/Hotel_Review-g186338-d242716-Reviews-
London_Marriott_Hotel_Park_Lane-London_England.html>.
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