Pest Analysis Of Hotel Industry

1 INTRODUCTION

In order for a hotel to have a competitive advantage over other sectors, it has to acquire information from its external environment and position itself for success.

The image that a hotel portrays to the public matters a great deal. Hotels need to make effort to present a good reputation. Many prospective guests now rely on Word-of-Mouth to decide where to go and where not to go.

Economic factors will always have an impact on hotel operation. These forces create growth and profit opportunities that will satisfy all the stakeholders – owners, employees and supplies

Politically, governments all over the world make laws and enforce them. They may encourage new business formation through tax incentive and subsidies or through direct

It is often chained and franchised and tends to be located in city-centres with highly standardized services. In spite of it operating economically, it needs to acquire information from its external environment and position itself for success just like the other hotels. This can be done through looking for early warning signals from the way business is conducted in the environment and determining what requires change in the sector based on the assessment of the timing, influence and importance of specific needs (Enz 2010).

By looking at the social environment, a hotel should manage to understand its preferences, strengthen its relationship with the customers and create innovative products. A hotel can achieve quite a lot by listening to what the society requires, e.g., the need for a healthy lifestyle. A budget hotel can take advantage of the society’s interest in wellness and develop state of the art spas like Phantom Horse Spa in Phoenix Arizona, USA where guests go for relaxation, meditation and all kinds of

Most hoteliers are concerned about improving productivity of their businesses and this can be achieved through a number of ways. When a hotel uses proper recruitment methods and trains its workforce, productivity is likely to increase (Lovelock and Young 1979). Similarly, productivity can be improved through the use of technology rather than relying solely upon human labour. The hotel sector will continue to grow in spite of threats and impediments and this is because it cannot be substituted, people will always travel far away from home and will need to stay in hotels. The sector is one of the few places in the labour market where young people can find jobs even with limited education (European Commission 2009). Hotels are found all over the world and so the market is not limited to just a few places. There are many people especially from emerging economies like China travelling globally and need hotels to stay in. This sector cannot be outsourced like the contract catering services. Workers in hotels have to be very close to the customers to satisfy