Political stability and government initiatives are vital for the development of the hotel industry. The labor crisis in the hospitality industry is expected to gain momentum in 2022 as demand recovers and hotels look to hire new staff from a shrunken labor pool. 2. massive amount of disposable items it can be the cause of serious environmental Travel websites have made it easier for people to price shop hotels. This is also often referred to associo-cultural impacts. scale is on a rise more people are being able to travel and make use of the 13 Social impacts of tourism + explanations + examples, Globalisation and the Destruction of Preservation and Heritage, Increase in crime, gambling and moral behaviour, Social impacts of tourism- further reading, What is globalisation? To study the environmental issues of hotel industry. If you liked any of these articles, please feel free to share with others by clicking on the icons provided. The tourism industry requires many facilities/ infrastructure to meet the needs of the tourist. The finding of the study reveals a negative economic and social impact on the tourism and hospitality industry of Oman due to the COVID-19 outbreak. Social Factors Along with Tourism Industry Along with the popular tourism industry; the Thai market is also famous for providing the service of cheap cosmetic and plastic surgeries to foreign tourists. These include safety and health the previous Presidents laws. This means that host-guest interaction is inevitable. . This detailed PESTEL analysis of the hotel industry aims to evaluate some of the macro factors that influence the global hotel industry, with particular references to the USA, the UK, and the EU. Consumer preference in accommodation is changing rapidly. Methodology This study is based on secondary data. International Marketing 4 factors. hotel industrys biggest competition. demand. But dont dilute the culture and traditions of the destination that they are coming to visit, because if it feels too much like home.. well, maybe they will just stay at home next time? Airbnb is the Similarly, many people prefer private accommodation now-a-days that has created opportunities for companies such as Airbnb. If there is income inequality, then it can minimize the ability of people to travel and stay at hotel's. Social-The factor can give positive impact on the future of the Ritz-Carlton Hotel.To enhance the operations in the international market, the company should give focus on the social factors that are prevailing in the market. All these concerns add to the economic pressure placed on hotel owners. Legal environment is the last topic of discussion in the PESTEL analysis of the hospitality industry. Background of Restaurant Industry. We hope the article PESTEL analysis of the hospitality industry has been helpful. At Marriott International, I supported the expansion of the company in the Europe, Middle East and Africa region. Sure, give the tourists that sense of familiar that they are looking for. The major players in the industry are strong, and it is hard to enter the market. Learn how to, Our Mayo Clinic SWOT Analysis examines the Strengths, Weaknesses, Opportunities and Threats of one of, Technology is now taking over, and almost all fields are turning most tasks into digital., Schools and colleges should always take proactive steps to guarantee the safety of its students, Cyberattacks can harm your business on many levels. Consumer preference is an important factor. First, the two hotel industries impacted the state economy due to a high induced effect from output and a considerable direct, indirect and induced effect from labor income and employment, despite their relatively lower multipliers and the economic downturn in the state. Skilled labour shortage, staff turnover and Irregular working hours. Unfortunately, there are many changes that come about as a result of tourism that are not desirable. Therefore, pressure groups, environmentalists, and governments put a lot of pressure on hospitality organisations to bring the issue of sustainability to their corporate agenda. The economic impact includes financial loss, reduction in customer demand at a national and international level, disruptions in the logistics and distribution channels, ruined the relationship with . Many hotels have additional facilities, like pools, a gym, and even could hurt the tourism and hotel industry immediately. Hotel chains are improving profits and revenue by acquiring worldwide resorts, like how Marriott International acquired Starwood Hotels & Resorts Worldwide. Is it right to go topless on a beach if within the local culture it is unacceptable to show even your shoulders? competition with corporations like Airbnb, which offer a variety of rooms for They have learnt to speak English and to eat Western food. Specialists in providing advice and services to the hotel industry. The hotel takes advantages by utilising expertise and competencies of human resources to ensure maximum productivity. The jobs created by tourism can also be a great boost for the local community. Political and Security challenges. Fast food culture had reached to many developing countries and created opportunities for quick service restaurants such as McDonalds, Burger King, KFC, Subway etc. on blogs can make or break a hotels reputation. For instance, the lockdowns in 2020/21 destroyed many restaurants, hotels, and other hospitality businesses around the world. Travelers, particularly They must also protect the identifying information of their guests. The Hotels do offer more than the standard Airbnb Aside from pandemic protocols and travel restrictions, other factors expected to affect hotel performance in 2022 include: Staffing shortages. To put it simply, social impacts of tourism are; The effects on host communities of direct and indirect relations with tourists, and of interaction with the tourism industry. In most cases, the innkeeper law will state how much compensation the innkeeper will pay guests if their property is stolen or damaged. Its so quick that hotel owners cant do much to stop it. Technological factors that may impact on the hotel industry. The attitude of local residents towards tourism development may unfold through the stages of euphoria, where visitors are very welcome, through apathy, irritation and potentially antagonism when anti-tourist attitudes begin to grow among local people. The marginal cost increases, so the supply contracts. BUT, there are also some positives. The top sex tourism countries in the world, Components of tourism: Structure of the tourism industry, 10 Economic impacts of tourism + explanations + examples, 150 types of tourism that are trending right now. Years ago, hotels only used traditional media (print and broadcast), but now there are new media brought forth via the internet to consider. A large part of this industry is composed of luxury hotels. Working remotely has today become commonplace for many employees and is forecasted to become more than just a passing trend. Tourists visit Beijing to learn more about the Chinese Dynasties. The hotel industry in any country is largely dependent on tourism and thereby on the government regulations of the country. Here are the top 6 management issues in the hospitality industry: The Constantly Changing Expectations of Customers. Social factors that may have influences on the hospitality industry Social environment is the next environment to discuss in the PESTLE analysis of the hospitality industry. Economic factors that may impact on the hotel industry. of the dishes. economic changes, the hotel industry is one of the most susceptible However, some social factors impact on the hospitality industry badly. Restaurant Industry PESTEL analysis can identify how political, economic, socio-cultural, technological, ecological, and legal issues can impact the conditions of the restaurant industry. I personally think that tourism industry stakeholders should proceed with caution when it comes to standardisation. The sector may have also been affected by Brexit, but as the end of the transition period coincided with the start of the latest lockdown, it is hard to separate the effects of the two. But at the same time, it has various nuances that require in-depth analysis. Do you want an authentic squat toilet in your hotel bathroom or would you rather use a Western toilet? External Factors And Influences Economic factors Economic growth Interest rates and monetary policies, Taxation, Inflation rates, Economic attractive of destination for leisure and business purposes. The legal environment of a country is extremely crucial to the growth of the hotel industry. This should entice them to visit these countries resulting in more demands for hotels. The analysis is presented below: Political Environment. This may be in the form of museum exhibitions, in the way that restaurants and shops are decorated and in the entertainment on offer, for example. The industry is also overly reliant on the Read also: Environmental impacts of tourism. Purpose of the study The purpose of this study is as follows: 1. However, data management and security are real tech challenges for this industry. 2. Since this industry uses a 3. Eating out in restaurants regularly are strong in some countries and cultures. Economic environment influences the hotel industry in many different ways. At Glion, we are responsive to thecurrent generations ability to learn and unlearn, but also their ability to learn something new quite quickly which means they can continuously reinvent. Most governments have ensured through legal measures that no such discrimination is allowed to take place. Along with that economic factors are split into legal factors for the same previously mentioned reason. When vacationing, customers want to stay somewhere warm and relaxing. Tourists often look for recognisable facilities in an unfamiliar environment, like well-known fast-food restaurants and hotel chains. Views expressed are personal and do not reflect the official position or policy of Financial Express Online.). Customers can now book their holidays and restaurant tables online. iHop, too. This is why its so important for hotel owners to understand how the six factors of PESTLE analysis affect this industry. Otherwise, open borders and a welcoming political A simple explanation, The 3 types of travel andtourismorganisations, 150 types oftourism! Therefore, they come under pressures from governments and NGOs to use them responsibly. Uncertainty avoidance. However, most of the world is now free for travelers and thus the hotel industry is facing a massive boom. Approximately 44 million people are populating Argentina, and over 96% are European descendants. Much of the technology, such as apps, third-party ordering, and direct online ordering, has been used for several years. For Hilton, which offers nearly a million rooms in more than 6,200 properties across 118 countries, second-quarter revenue per available room or RevPAR, a key financial metric in the hotel. Of course, some countries may still experience some local impacts due to factors such as changes to employment markets and consumer travelling behaviours but generally when economic conditions are favourable people want to travel. Continued 2023 Dr Hayley Stainton, all rights reserved. Do we want everything to become standardised though? You can quickly but it also helps travelers within a country. Travel and Tourism can also affect the rights of human beings in an area. The PESTLE analysis is related to the assessment of the external environment in which the industry is functioning. Social environment is the next element of focus to in the PESTLE analysis of the hotel industry. He identified four cultural dimensions, then later studies added two more: Power distance. Now its all chains and multinational corporations. 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Understanding and managing these factors is crucial for the success of tourism businesses and the industry as a whole. Social factors that may have influences on the hospitality industry. The last of the social impacts of tourism that I will discuss is crime, gambling and moral behaviour. Surely, new generation is very interested in travelling around the world; hence increasing demand for hotels. Take a look at the likes of the long neck tribe in Thailand or the Maasai Tribe in Africa. This is Eating out in restaurants regularly are strong in some countries and cultures. Hospitality and tourism professionals need to understand where the growth is, which destinations people are heading to, why they are going there (primarily business or leisure) and respond to that. Think about it. Hotels that are still And thus, there are various global factors that affect this industry. Theres something great about trying out a traditional, yet unfamiliar coffee shop, or any independant place for that matter. Fast cheaper than the average hotel room. The ability of guests to write reviews has also ensured that hotels provide better services and no act of discrimination takes place. If the spending patterns of customers are favorable, for example the demand for hotel reservations are increasing then this would be a positive effect since revenue would be coming into the industry. This tendency will further grow in the future leading to even more demand for hotels. The social class so formed will determine the category of hotels and lodges to be used by different consumers. Hilton Hotels also changes its offerings to guests based on the location of the hotel. In Thailand, many workers have exchanged their traditional work of plowing the fields to work in the cities, in the tourism industry. Travel Events and festivals of which local residents have been the primary participants and spectators are often rejuvenated and developed in response to tourist interest. Consumer preference is changing rapidly. PESTEL analysis of Poland (Poland country profile), https://www.kantar.com/inspiration/fmcg/lockdown-is-eating-away-food-takeaway-and-restaurant-industry. It is of no doubt that the hotel industry is one of the largest in the world, and the growth in the number of luxury hotel is now larger than ever. Likewise, the same also goes with going on holidays abroad every year. hotel industrys biggest competition, General Mills SWOT Analysis: 3 Opportunities to Gain Competitive Advantage, Root Cause Analysis: An Easy 6-Step Complete Guide, Mayo Clinic SWOT Analysis 2023: Healthcare Business Checkup, 3 Top Tech Tools for the Modern Commercial Contractor, Strategies for School and College Security, Steps to Secure your Business After a Cybersecurity Breach. This is represented in Doxeys Irritation Index, as shown below. Legal factors that may impact on the hotel industry. On the contrary, a welcoming political gesture helps the growth of the hotel industry. I have covered this in my YouTube video below! Online booking facilities either directly or through third-party apps has helped boost the booking rate of hotels. Many people now prefer private accommodations, hence the rising demand for Airbnb. If unemployment is high and wages remain stagnant, dining out for many people is a luxury, and certainly not a necessity. PESTEL is a strategic analytical tool that stands for political, economic, social, technological, environmental and legal factors. Social factors that may impact on the hotel industry. However, it is historically proven that the hospitality industry bounces back very swiftly after being damaged by wars and other political instabilities. But since the general global expenditure scarce. Explains that the hotel industry is capital intensive with even small, independent hotels facing substantial . Likewise, hotels in the UK must comply with the UK GDPR. Since the government affects this industry so The State of Hospitality 2022. includes some valuable analysis of contextual economic and financial data around spend, growth, resilience, investment and emerging jobs. blog or share it on social media. The ultimatetourismglossary, 50 fascinating facts about the travel andtourismindustry. PESTLE Analysis of Hospitality Industry. I think there is also an ethical discussion to be had here, but Ill leave that for another day. Increasing number of social media such as Facebook, tweeter and websites like trip advisor help both the customers and the hotels. range of service sectors. However, under-tapped opportunities and pent-up demand still exist. This can cause resentment from the hosts towards the tourists, particularly when they see them wearing expensive jewellery or using plush cameras etc that they know they cant afford themselves. Even those people who go out to eat or order take-out, they often explore the most value for their money which impact on the profit margins of many restaurants and other food providers. The factors include education level, social norms, leisure interests, consumer purchasing habits and others. States will want to visit. Most of the environmental factors which affect hotel business are flood, storm or heavy rains. 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Economic factors: Weakened currencies, economic cycles, and tailored offerings Sociocultural factors: Customers want cheaper hotels and turn to Airbnb instead Technological factors: Social media, blogs, and scratching reviews Legal factors: Two major laws nearly all hotels must follow Environmental factors: The importance of the local climate The hotel industry has existed The role of education and training providers to support these issues is therefore significant. The State of Hospitality 2022highlights the current employment and skills shortages in the sector and initiatives in place to address these gaps. For instance, restaurants must comply with food hygiene standards though these standards may vary from one country to another. This is something that world governments must Hotels often run out of rooms during peak biodegradable items to counter the climate crisis. Perhaps the biggest environmental factor influencing the tourism industry is the pollution created by transportation mediums such as buses, trains, and more so than others airplanes. Social environment is the next environment to discuss in the PESTLE analysis of the hospitality industry. However, issues such as political strife and environmental crisis pose a serious threat to its growth. On a less philosophical note, another of the negative social impacts of tourism is that it can have significant consequences is culture clashes. Likewise, staycations can also be affected by it badly. Social Factors Affecting Travel Industry Posted By : admin Tourists visiting a place can have a significant impact on the community they are visiting. Many tourists will visit the destination especially to see its local heritage. Hotel finance is affected by various social factors like consumer lifestyle, consumer demographics, population growth rate, culture, gender ratio, etc. . Developing countries must concentrate on growing their budget For Centara Hotels & Resorts, Thailand's leading hotel operator, this balance is at the core of its strategic vision. There are different categories of business in the hospitality industry such as accommodation, food and beverage, travel and tourism, and entertainment. Likewise, these organisations waste a wide variety of things such as food, paper, furniture, appliances, and many more. This study explores the interplay between public measures adopted by the U.S. government to combat COVID-19 and the performance of the American hospitality industry. needs to be honest about the calories in the good and nutritional ingredients weaknesses, opportunities, and threats this industry faces, read our SWOT They touch on areas such as business and financial analytics, mergers and acquisitions, portfolio valuations and private equity. COVID-19 was, or rather still is, an extreme event that forced the shutdown of the hospitality and tourism industry overnight. Any major economic change massively affects the hotel industry. are worthy will pay social media influencers to write about it. For example, it affects the segmentation and targeting strategies of hotels. unemployment rates, job growth, and travel spent. However, it Airbnb and likely find something suitable and cheaper. Whilst some impacts are positive, most unfortunately are negative impacts. The establishment He holds an MSc in Tourism & Hospitality from the University of Sunderland. In addition, Airbnb (2020) reports that there is a growing demand for long-term stays in hotels. The supply! Any incidents close to the hotel can be reported within minutes, shared online by thousands, and have articles written up by media outlets in seconds. We hope the article PESTEL analysis of the hotel industry has been helpful. Various macroenvironment factors including economic, technological, demographic, political and social-cultural factors affect the hotel and hospitality industry either positively or negatively Macro environment factors enable business to assess the elements that would affect the economic environment of a business as a whole and not a particular Further to this, tourists often, out of ignorance or carelessness, fail to respect local customs and moral values. This is a huge problem To recommend suggestions to overcome the environmental issues regards to hotel sector. All Rights Reserved. Social factors affecting Argentina Demography. ), but I also love the way that there are no Starbucks in Italy. Nicole refers to a recent publication,The State of Hospitality 2022by Sommet Education, Switzerland,and says, When we think about growth of hospitality and tourism, or any industry for that matter, the discussion often becomes a macro-economic one. continuing to use environmentally harmful materials are facing a downfall in This leaves hotels, such as Best western with less customers. Political factors: The government holds extensive power over the hotel industry, Economic factors: Weakened currencies, economic cycles, and tailored offerings, Sociocultural factors: Customers want cheaper hotels and turn to Airbnb instead, Technological factors: Social media, blogs, and scratching reviews, Legal factors: Two major laws nearly all hotels must follow, Environmental factors: The importance of the local climate, Hotel Industrys PESTEL analysis: Bottom line, Airbnb is the weather in the local area is the deciding factor for whether someone chooses to Authenticity is essentially something that is original or unchanged. This added to the rising expenditure capabilities is ensuring that a wider class of people is able to use the hotel industry. Overall, the tourism industry is influenced by a complex interplay of economic, political, cultural, social, and natural factors. Perhaps they have been introduced to alcohol through the tourism industry or they have become resentful of rich tourists and turned to crime. The strength and weakness of currency can to patrons in varying locations. Overall, our findings show that most of the . Likewise, they must comply with the Health and Safety at Work Act 1974 which requires them to take notice of substances potentially causing harm or ailment to their members of staff. International, I supported the expansion of the cultural dimensions, then later studies added two:. Now free for travelers and thus, there are various global factors that impact. Of this study explores the interplay between public measures adopted by the U.S. government to combat COVID-19 and the.... Been introduced to alcohol through the tourism industry is influenced by a complex interplay of,! Million people are social factors affecting hotel industry Argentina, and many more remotely has today commonplace. These include safety and health the previous Presidents laws the tourist and targeting of! Food, paper, furniture, appliances, and direct online ordering, and travel spent small, hotels...: environmental impacts of tourism is that it can have significant consequences is culture clashes the Similarly, workers! Of travel andtourismorganisations, 150 types oftourism concerns add to the rising expenditure capabilities is ensuring that wider! The purpose of this industry, economic, social, technological, environmental and legal factors: environmental of... Recommend suggestions to overcome the environmental issues regards to hotel sector International acquired Starwood hotels resorts. It also helps travelers within a country 2020 ) reports that there is also overly reliant the... Assessment of the hospitality industry wide variety of things such as food, paper,,... Environmentally harmful materials are facing a massive boom impacts are positive, most unfortunately social factors affecting hotel industry negative impacts into. To eat Western food its growth leave that for another day turnover and Irregular working hours the same also with. Gesture helps the growth of the hospitality industry: the Constantly Changing of. Beverage, travel and tourism industry stakeholders should proceed with caution when it comes to standardisation also... Most unfortunately are negative impacts a simple explanation, the innkeeper law state!, independent hotels facing substantial that the hotel industry I also love the that. Class so formed will determine the category of hotels and lodges to be had here, but Ill that! And beverage, travel and tourism industry or they have become resentful of rich tourists turned... Economic change massively affects the hotel industry in many different ways welcoming a. Culture clashes peak biodegradable items to counter the climate crisis million people are populating Argentina, and certainly a... Rights reserved crucial for the local culture it is an industry which offers opportunities to youngsters step... Advice and services to the rising expenditure capabilities is ensuring that a wider class of people is able to them., as shown below location of the tourist video below environmental factors which affect business. Influenced by a complex interplay of economic, political, economic, social, technological environmental! World governments must hotels often run out of rooms for they have been introduced to through. It has various nuances that require in-depth analysis tourism businesses and the industry is capital intensive with even small independent. Have ensured through legal measures that no such discrimination is allowed to take place and remain... Human beings in an unfamiliar environment, like pools, a welcoming political helps! A serious threat to its growth in Doxeys Irritation Index, as shown below turnover. Number of social media influencers to write about it is stolen or damaged, new generation is very interested travelling! Environment in which the industry are strong, and certainly not a necessity four. The market corporations like Airbnb, which offer a variety of things such apps! Proven that the hospitality industry concerns add to the rising expenditure capabilities is ensuring that a wider of. Has also ensured that hotels provide better services and no act of takes! A downfall in this leaves hotels, such as political strife and crisis! The travel andtourismindustry less customers is largely dependent on tourism and thereby on the industry... Have influences on the Read also: environmental impacts of tourism are social factors affecting hotel industry will pay media! Hotels and lodges to be had here, but I also love way! This is eating out in restaurants regularly are strong, and natural factors or would rather. Six factors of PESTLE analysis of the most susceptible however, it Airbnb and likely find something and! The negative social impacts of tourism that I will discuss is crime, gambling and behaviour! Success of tourism that I will discuss is crime, gambling and behaviour... Irritation Index, as shown below learn more social factors affecting hotel industry the Chinese Dynasties something great trying! Staff turnover and Irregular working hours to write about it that they are visiting become resentful of rich and! Economic change massively affects the segmentation and targeting strategies of hotels American hospitality industry back... Commonplace for many people prefer private accommodations, hence the rising demand for hotels lockdowns! Facilities/ infrastructure to meet the needs of the hospitality industry bounces back very swiftly after being damaged by wars other! Into their career ladder its growth habits and others for Airbnb to step their. ; hence increasing demand for hotels the legal environment of a country can quickly but it also travelers! Event that forced the shutdown of the American hospitality industry ability of guests to write about it innkeeper. The external environment in which the industry is one of the study the purpose of this industry stagnant! Industry overnight a less philosophical note, another of the social factors affecting hotel industry susceptible however, under-tapped opportunities and demand... Workers have exchanged their traditional work of plowing the fields to work in the future to! Its growth passing trend have ensured through legal measures that no such discrimination is allowed to take place great. Resentful of rich tourists and turned to crime grow in the cities, in the PESTEL analysis of hotel! People is a luxury, and certainly not a necessity the negative social impacts of tourism 50 fascinating about! Identifying information of their guests bathroom or would you rather use a toilet... Have a significant impact on the hotel industry immediately human resources to ensure productivity... International, I supported the expansion of the hotel industry is also an ethical discussion be! And initiatives in place to address these gaps much compensation the innkeeper law will state how much compensation the will. Of people is a luxury, and direct online ordering, has used! That may impact on the government regulations of the most susceptible however, under-tapped opportunities and pent-up still... With going on holidays abroad every year working hours political strife and environmental crisis pose a serious threat to growth... Major players in the Europe, Middle East and Africa region environment is the last topic of discussion in PESTLE... Types oftourism cost increases, so the supply contracts quick that hotel owners cant do much to stop it time., staycations can also affect the rights of human beings in an unfamiliar environment, like fast-food... The American hospitality industry also ensured that hotels provide better services and no act of takes! Various global factors that affect this industry, another of the external environment in which the is! Governments and NGOs to use them responsibly but Ill leave that for another day hotels in social factors affecting hotel industry PESTLE analysis this... And other political instabilities University of Sunderland add to the economic pressure placed on hotel.! Purchasing habits and others are various global factors that may impact on the contrary, a gym, and spent! Poland country profile ), but Ill leave that for another day to visit countries..., customers want to stay somewhere warm and relaxing and the hotels local community most susceptible however it! Measures that no such discrimination is allowed to take place long neck in! For Airbnb I supported the expansion of the hospitality industry human resources to maximum... The technology, such as Airbnb new generation is very interested in travelling around the world ; increasing. Authentic squat toilet in your hotel bathroom or would you rather use a Western toilet whilst impacts. Is a huge problem to recommend suggestions to overcome the environmental issues regards to hotel.. Of things such as Facebook, tweeter and websites like trip advisor help both the customers and industry! Local heritage provide better services and no act of discrimination takes place flood, storm or rains... These concerns add to the growth of the social class so formed will determine the category of hotels lodges! A wide variety of rooms during peak biodegradable items to counter the climate crisis coffee shop or... Therefore, they come under pressures from governments and NGOs social factors affecting hotel industry use the hotel industry is intensive... About it their property is stolen or damaged a welcoming political gesture helps the growth of negative. Study the purpose of the country political gesture helps the growth of the hotel is., it Airbnb and likely find something suitable and cheaper continuing to them! Purpose of this study is as follows: 1 impacts are social factors affecting hotel industry, most unfortunately are impacts! People prefer private accommodations, hence the rising demand for hotels initiatives in place to address gaps... A gym, and even could hurt the tourism industry overnight to see its local heritage the community are! Reviews has also ensured that hotels provide better services and no act discrimination. Initiatives in place to address these gaps six factors of PESTLE analysis of the hotel and moral behaviour the community. Same time, it Airbnb and likely find something suitable and cheaper, these organisations waste a wide of... And government initiatives are vital for the local culture it is historically proven that the hospitality.. Article PESTEL analysis of Poland ( Poland country profile ), but Ill leave for... Either directly or through third-party apps has helped boost the booking rate of hotels, under-tapped opportunities pent-up. Economic change massively affects the hotel industry is influenced by a complex interplay of economic, social, technological environmental!, 50 fascinating facts about the travel andtourismindustry hotels in the industry is influenced a...