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Sample Essay on Factors Affecting Hospitality Industry

Factors Affecting Hospitality Industry

The hospitality industry is one of the most successful industries across the globe. Even so, it is faced by many uncontrollable factors that affect its growth and productivity. The variables often affect ownership of hotels, restaurants and management of hospitality establishments. Understanding the factors is very important because it helps you to engage in contingency planning for the success of hospitality business.

It is however important to note that even though hospitality industry is often affected by uncontrollable factors; their effects can be managed efficiently.

Legal changes

Hospitality industry is governed by law. Rules and regulations set to govern the industry change with time and cannot be controlled. The government regulates the industry for its own reasons and it affects the way businesses are run. Hotels, restaurants and airlines over the past years have been forced to run their businesses as per set regulations.

Changing tax rules raises the price of gas. This affects the costs of hospitality industry and tourism at large.

Macro-economic environment

The prevailing macroeconomic environment affects hospitality industry. The economic situation in a country plays a crucial role in determining whether a business will thrive or not. When the economy goes sour, hospitality industry suffers a great deal. Poor economy means discretionary spending. As a result, tourism and hospitality industry goes wayside. Hotels, airlines and restaurants are forced to be extremely dependent on backing of the business community.

Evolving technology

The world is embracing advanced technology and so is the hospitality industry. Technology has continued to change unimpeded. When new technologies are put in place, hotels and other establishments within the hospitality industry are forced to adapt to the changes. If an establishment does not adapt to the changes, it can easily be left on the losing edge.

For example, computer hardware and software options keep changing over time. There are many options therefore, it is necessary for a hotel chain to keep replacing its system periodically to keep up with changing trends. This can be time wasting and it affects profitability of a business.

Tight competition

Hospitality industry is also faced with tight competition. This is one of the factors that cannot be controlled. Competition is triggered by the need to achieve an edge over business rivals and is affected by regulatory and economic factors. For instance, airline industry has been forced to adapt to strict regulations for security reasons.

Regulatory environment within the industry include airport and hotel security check INS among other details. They discourage flying and even local tourism. Business persons in the industry have no control over such measures even though they severely impact their operations.

Political environment  

The hospitality industry is also affected by political environment. A country that is peaceful attracts businesses. Hotel industry attracts many clients when the political environment is favorable. Local and international guests can spend quality time in hotels and tourist attraction sites if political environment is stable.

Additionally, clients continue to fly in and out of a country by plane if there are no tight security checks thus, promoting airline and hospitality business.


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