Macro Environment and Micro Environment

Table of Content

1. Macro Environment
2. PESTE Analysis
3. Micro Environment
4. SWOT Analysis
5. Bibliography

Macro Environment

Macro-environment is composed of political, economic, sociocultural, technological, and environmental forces, and they are usually called the PESTE environment. Significant changes in any component will primarily affect the business, and hospitality companies will be limited. Each element of the PESTE environment is continually changing, and these changes impact consumers, market demand, and the competitive environment.
The PESTE analysis
Each factor plays a different role in the firm. Understanding PESTE analysis will help you to be comprehensive with the macroenvironment and the consequences.
Political factors: The government has a stronghold over the hotel industry
Since the government has more potent power than the hotel industry, It must follow the governments instructions. Another thing the government takes charge of is tax reform. For example, in the United States, they receive lower taxes from hotel owners. As a result, luxury hotels, and high-graded hotels could expand the industry as a whole, and they could save to acquire more guests Economic factors: Weakened currencies, and economic cycles The weakening and strengthening of a currency affect the attractiveness of a vacation spot. When the currency is weak, people look for places with has lowers rate since they are cheaper. Otherwise, they look for places with higher rates. Also, the hotel industry is one of the most susceptible, if any, economic changes occur. Whether it overcomes successfully or not depends on a few factors, involving job growth, unemployment rates, and travel spent. Sociocultural factors: Customers want and look for cheaper hotels. The hotel industrys biggest competition is Airbnb. You can easily find and book rooms online, and sometimes they are cheaper than a hotel room`s actual price. Big hotels usually run out of rooms during peak seasons, and they can jack up the room price depending on it. However, Airbnb likes to find and provide cheaper places to offer. Now, this would be an enormous problem for those who are seeking higher profit during peak seasons when the room is scarce.

Technological factors: Social media, blogs

Hotels used traditional methods to promote and attract guests and customers in the past. However, the internet has allowed the introduction of media. Social networking platforms, such as Instagram, and Facebook, and mobile apps are eminent tools for hotel owners to advertise their hotels and make their audience aware of their hotels. Anyone can write a review about their experience in hotels, restaurants, and even natural places. These reviews, written by guests and customers, often have a significant impact on the brand`s reputation. However, it can also be good marketing for them. Worthy hotel owners will pay social media bloggers to write about their brand. This will grab attention from people, and the hotel will gain new customers.
Environmental factors: Significance of the local climate
Hotel guests book and stay at hotels for a variety of reasons. Some people travel because of their family, while others travel for vacation. No matter the reasons, people look for peaceful and relaxing places. This is not something that hotels can control and manage, but they must set the price differently depending on seasonal differences.

Micro Environment

The micro Environment is the organizations operating environment. The reason is that the function of the microenvironment is directly related to the firm. Microenvironment has more connection with the company than macro-environmental factors. Even if every organization has different elements, the following features are usually found in almost all companies. Customers: Hospitality organizations usually target a wide range of customers, including business-related hotel residents, non-resident drinkers, and diners. In terms of marketing, managing a broad mix of customers to ensure all customers are satisfied with their services is one of the significant roles in the hospitality environment. Employee: For most of the hospitality industry, a critical resource is the local labor market. Skilled and educated employees are always welcomed by the hospitality company and play an essential factor in delivering a high-quality service. Since employees interact and deal with customers, the employees will be a significant influence on the customers level of satisfaction.
Suppliers: Suppliers are individuals or firms that provide companies with resources, goods, and services. A company`s marketing plan can be affected by trends and developments, which also affect s suppliers.
Intermediaries: Intermediaries usually advise, influence, and have bookings for guests or customers.
SWOT Analysis
SWOT analysis refers to strengths, weaknesses, opportunities, and threats faced by the firm or individual. Among the broad range of firms, we will look into the SWOT analysis of the hospitality industry.
Strengths

1. It provides a safe abode away from home.
2. It contributes to the local economy.
3. It is a mammoth of an employer.
4. It has a high-profit margin.
   Weaknesses
5. High hotel rates – require a huge setup cost.
6. Tax rates are unfavorable.
7. The hotel business depends on seasonality and tourism activity.
   Opportunities
8. Huge scope for technology
9. Millennials are the new key target segment for hotels

Threats

1. Boutique alternatives exist.
2. Prevalent conditions may affect the business.
3. Worse than expected economies impact people`s desire to go to hotels.
4. Travel patterns change.
5. Pandemics may break out.

Bibliography

1. Cw.routledge.com. 2020. [online] Available at: link [Accessed 17 September 2020].
2. Frue, K., 2020. PESTLE Analysis Of The Hotel Industry. [online] PESTLE Analysis. Available at: link [Accessed 17 September 2020].
   2020. [online] Available at: link/ [Accessed 17 September 2020].
3. Elearning.nokomis.in. 2020. [online] Available at: link [Accessed 17 September 2020].
4. JOBS, S., 2020. SWOT Analysis Of The Hotel Industry – Know The Strengths And Weaknesses | SOEG Career Portal. [online] SOEG Career Portal. Available at: link [Accessed 17 September 2020].