Hotel Industry Pestel Analysis

Political Factors

For the success of any industry, Political stability is the most important requirement. In UK, hospitality industry is one of the vital success areas of economic expansion. Hotel industry being the 5th largest industry is contributing to 34 billion pounds in gross tax revenues. For the hotel industry, the regional growth fund establishment is one of the major sign of probable growth in this sector. The political factors in the hotel industry can affect the number of visitors and guests, both, business travellers’ and tourists visiting a country. For example, London’s terrorism act in the year 2005 labelled the place as a set of fanatic religious organizations for a short period. Such acts of violence are expected to decrease the numbers of guests to UK, thus creating a negative impact on the performance level of the hotel market in particular.

Global relations and the political climate in the famous tourists’ destinations in UK are also likely to disrupt the international air travel and result in frightening the people away from travelling, such as the September eleven terrorism attacks in the year 2001. A rise in global tensions makes such events likely to happen in the future. For this reason, any decline in the air travel will lead to a fall in the demand for the hotel rooms (Rodrigo, 2012).

Hotels in UK are also likely to face the violence attacks directly. According to the evidence from the previous years, the fanatics are targeting the tourist sites and hotels, such as at the hotel beach in Tunisia, 39 people were killed in the year 2015. These attacks may damage the hotels in UK by frightening away the probable tourists and developing the requirement for expensive security measures. Taxes like bed tax create issues in acquiring travel visas to the UK region, particularly by non-US nationals and non-Europeans. This can be a restraint to guests coming into this region (Doinog, 2014).

Economic Factors

A country’s political situation influences the economic setting of any country. The foreign and domestic macroeconomic factors and events affect the hotel industry of UK largely (Mazzola, 2010). For example, in the year 2012, during the Olympic times, most of the hotels in UK were occupied completely. Throughout the peak and non-peak periods, the seasonal nature of demand, room occupancy, and incomes can fluctuate drastically. The major factor that is likely to affect the hotel industry in UK is the economic turmoil in Europe and in China. The events like a collapse of stock market in China and the debt catastrophe in Europe has lowered the purchasing power of individuals’ and their capability to travel abroad to a large extent.

The shrinking off business travel is the biggest effect on the hotels in UK. High exchange rates for the major currencies overseas can