Analysis of External Factors and Trends in the Hospitality Industry

This report provides a comprehensive analysis of the contemporary hospitality industry, focusing on both internal and external factors that influence its development. It begins with an introduction outlining the scope, followed by an examination of PESTLE factors (Political, Economic, Social, Technological, Environmental, and Legal) and their impact on hospitality firms. The report includes a SWOT analysis for the hotel industry and specific case studies, such as KFC and McDonalds, to illustrate the impact of external factors. Furthermore, it discusses current and potential trends in the industry, such as technological advancements and changing guest behaviors, evaluating the hotel industry's ability to adapt. Examples like Greggs and Subway are used to highlight how companies are responding to trends. The report concludes with a summary of key findings and a list of references.

Contemporary Hospitality
Industry
LO3 - LO4

Table of Contents
 Introduction
 PESTLE factors affecting the development of firms in Hospitality industry
 SWOT analysis for hotel industry
 Impact of external factors on the development of firm using specific
examples
 Implications of the current and potential trends in hospitality industry
 Evaluation of the ability of the hotel industry to develop products and
services for meeting the trends
 Impact of external factors on current trends and development using specific
examples
 Conclusion
 References

Introduction
The current presentation will focus on the internal as well as external
factors that impacts the hospitality industry and will throw light on the
issues being faced by this industry currently. Trends and potential
developments influencing the industry will also be discussed
effectively

PESTLE factors affecting the development of firms in Hospitality industry
 POLITICAL – Stability of the political environment, policies, laws and
the regulations affect the hospitality industry as a whole.
 ECONOMIC – Economic factors plays a major role in hospitality industry
as it impact the crucial decisions such as marketing and managerial
decisions as well as implications.
 SOCIAL – Social factors plays a role which help in developing stronger
relations in the hospitality industry.

Continued…
 TECHNOLOGICAL – Utilisation of the new technological factors,
inventions are an important factors that affect the hotel industry in a lot
many ways.
 ENVIRONMENTAL - When we advance the travel industry there are a
huge number of travellers released yearly in the nation, without legitimate
arranging, there will undoubtedly be not kidding natural and supportability
issues.
 LEGAL – Legal factors comes as discrimination law, tourism laws,
consumer as well as employment laws.

SWOT analysis for hotel industry
Strength:
 Safe bode which is away from home.
 Local economy is hugely impacted.
 High employment opportunities.
 Profit margins are always higher.
Weakness:
 Rates of the hotels are high
 Tax rates are not favourable to the industry

PESTEL analysis of Costa Coffee
Political
 Execution of free trade area
 Increase in the value added tax rates
Economic
 Buying power of the people is limited
 Unemployment rate is high
Social
 Growing living standard of people in UK is increasing the demand for quality
products
 Decreasing alcohol consumption among the population

Continued..
Technology
 Selling through E-commerce methods is prevailing in the current world
 High-tech methods such as EPOS are in trends
Environmental
 Higher request on coffee production because of raised environmental
concern
 Carbon emission reduction
Legal
 High labor and taxes in coffee beans origins
 Agreement with FSA

SWOT analysis of Costa Coffee
Strength
 Largest coffee chain in UK
 High base of customer
 Large profit margin
Weakness
 Only single product line
 Store layout concentration
 Coverage is small

Continued..
Opportunities
 Coffee is a mainstream trend these days
 Market gap in international student
 Few outside services in transportation hub
Threats
 Threats from carbonated drinks
 Competition in the market
 Threats from new cake shops selling coffee

Continued..
Opportunities:
 Increase in the tourism day by day
 Restaurants segment is also being explored
 Full year in flux of the customers.
Threats:
 High Competitiveness
 Conditions existing are not very favourable.
 High entry barriers.
 Affected by the country’s economy and tourism downfall.

Impact of external factors on the development of firm using specific examples
Kentucky Fried Chicken (KFC) is a promise of fast meat restaurants founded in
the year 1997 in the United States. The restaurant has been marked as one of the
best fast food outlet selling fried chicken. Because of the economic
liberalization act of India, KFC started its operation in India
Impact of external factors
 Considered many health and safety guidelines
 Labelling food by FSSAI
 Animal right Campaign
 Varied needs of the customers like vegetarian options
 Health concerns
 Home delivery and use of apps and mobile websites