Factors Affecting Hospitality Industry

953 Words4 Pages
Every industry to include the hospitality industry is impacted by external factors which directly influence organizational behavior and decision making. There are numerous factors to be considered, but political, economic, and social are three of the most influential. These outside factors sway managerial operational decisions daily regarding personnel, spending, policy, and short-term and long-term strategic planning concerning both core and exterior operations. As within every industry, the hospitality industry has unmanageable elements that affect management or ownership of hospitality establishments (Lewis 2017). Understanding these factors is important because it provides an opportunity for contingency planning (Lewis, 2017). The…show more content…
These directives not only impact commerce here in the United States, but globally as well. International treaties, trade agreements, national, state, and local regulations, and policy all dictate how business will ethically operate and navigate in a global marketplace. When regulation and policy changes occur at any or all levels, it can considerably impact how an industry or business operates. The hospitality industry is not immune to political strife. Regulations and policy affects organizational operations and decision making at every level regarding budgets, costs, employees, operations, policy, pricing, production, sales, and spending. These influences can ultimately trickle down to effect the overall cost of the product produced and return on investment for the business producing it. Regulation and policy can produce a positive or negative outlook for the industry as a whole and can be severe or minimal in nature. It wouldn’t be hard to imagine a new tax or regulation regarding gasoline or aviation fuel. The additional costs of the tax or regulation would eventually be transferred to the consumer. The industry would suffer as a whole people would choose to drive less and may not be able to afford to fly to their preferred destination of choice. Moreover, some examples of current political issues…show more content…
Many countries in Europe such as England, France, and Germany have altered or revised their immigration policies due to recent terrorist attacks. Any type of immigration reform will have an immediate impact on the hospitality industry as it relies on immigrants to fill many positions. The hotel industry typically relies on immigrants to fill positions such as housekeeping and the restaurant industry relies on immigrants to fill positions such as waiters, dishwasher, and cooks as many of these positions provide low wages as they are entry-level positions. These types of positions are typically large in numbers, have a high turnover rate, and can be hard to fill which is why they are attractive positions for immigrants looking for work. England’s decision to leave the European Union has also affected the hospitality industry as 106,000 thousand workers left the country and have not returned leaving migration statistics the lowest ever since they started keeping track in 1964 (Freytas, 2017). Politicians in Florida have used competing legislation to land migrant workers from Puerto Rico (231,000) after Hurricane Maria which drove the unemployment rate down to 3.6 percent which is 13 percent lower than the national average ( Levin & Smialek, 2017). Similarly, the restaurant industry

    More about Factors Affecting Hospitality Industry

      Open Document