PESTEL/ PESTLE/ PEST Analysis

Traditionally PESTEL analysis was known as the PEST analysis and only in the modern times did
the use of the word PESTLE came into being.

Social part of the PEST is split into environmental factors too as those have a significant role in
the strategic management these days. Alongwith that economic factors are split into legal
factors for the same previously mentioned reason.

Political Environment

“These refer to government policy such as the degree of intervention in the economy.”

The Times of India by Rachna Singh, Jaipur, in a bid to attract international tourists is gearing up
with a host of new properties across different segments. [Hospitality Biz India: Dec. 2009]

Hotel industry as well as tourism industry has a basic backbone of the government support
without which it won’t be able to sustain the competitive world. Government charges huge
amount of tax from the star and luxury category of hotels and thus has a huge impact with the
political changes that occur. Any small step taken by the government by changing some law it
would seriously affect hotel industry. The hotel industry is getting huge incentives and the state
governments are supporting the development of the hotels and their growth. This infact
answers the question how are Indian Hotels are planning to expand in the economic crunch
time.

The Terror attack on the city’s [ Mumbai ] renowned hotels Taj and the Oberoi’s had brought a
concern on the faces of the hoteliers with a substantial drop in foreign travellers to India taking
the terror threat into account.

Economic

“These include interest rates, taxation changes, economic growth, inflation and exchange rates.
As you will see throughout the "Foundations of Economics" book economic change can have a
major impact on a firm's behaviour.”

Mumbai being the financial capital of India has many foreign tourists arriving with the whole
and sole purpose of meetings, conferences etc. thus Hotels in Mumbai try to capitalise on the
foreign travellers who are seen to bring more money to spend along with increasing amount of
expectations from the hotels. As seen in the recent past the guests are willing to pay for the
services they get and the more the guests pay the more would the hotel and the industry would
prosper. With the increase in the paying power of the guests the need for the good and
luxurious hotels become massive. The per capita income in India also has rose to a new extent
enabling the common man to goto luxurious hotels to have a lunch or a dinner.

Economy of India faced one of the most minimal drop in the whole world because of the
controlled and sound financial system in the country. This helped hotels to only concentrate on
the foreign travellers which had reduced and the local market being stable was much of a relief
to the Indian Hotel Industry.

Social

“Changes in social trends can impact on the demand for a firm's products and the availability
and willingness of individuals to work.”

Vits being situated near the airport sees the maximum amount of guests who are in for the
business meetings and conferences. There are very few FIT guests seen in the hotel as
compared to the BTC guests [ Bill to Company Guests ] and the business travellers.

This explains the reason why the hotel could be seen having single room guests or a twin
bedroom guests more than the double bedroom guests. Being the Business hotel it has
maximum males arrivals compared to female arrivals.

The Vits could also be seen having layover guests many a times which becomes the revenue
generator for the hotel in the slack period of time.

Seeing the ratio of the various classes of guests of VITS it could be easily said that the Hotel
must strive for the FIT and the group checkins by linking the VITS to the travel agencies in and
outside India. This could probably balance the demographic ratio of the arriving guests.

Technological

As said before the technology used in VITS is way below the standards when it comes to Hotel
management software and the Mini Bar system. Some Technologies used are quite old and
need to be replaced with the new ones in the technological market.

For example: If a hotel used the printed KOT and BOT and the stewards had to give it
themselves to each of the departments. It could be substituted with the direct computerized
sending of KOT and BOT to the kitchen or the Bar.

Technology always has been seen to have reduced the manpower and the energy required by
the people. It would always be a boon to mankind and the technological upgrades would also
help to show the advances and the progress of the property.
VITS does not have the wifi installed instead they provide internet connection to every room
personally which should be made wifi which would reduce the guest complaints about the in
room facilities complaints and thus VITS could find many guests happy and satisfied with a
thought of you get what you pay for.

Environmental Factors

“The growing desire to protect the environment is having an impact on many industries such as
the travel and transportation industries (for example, more taxes being placed on air travel and
the success of hybrid cars) and the general move towards more environmentally friendly
products and processes is affecting demand patterns and creating business opportunities.”

Being an environmental friendly hotel this factor becomes the most important to the property.

Basically when we talk about the environmental factors affecting the business of the hotel the
only thing that comes into our minds is the floods which Mumbai saw in 2005 and the heavy
rains and showers across Mumbai. The period from June – September is the only period of time
when such factors play a role and there are very few things which could be done by the hotel
about it.

Generally what is done in such factors is to let the guests know the situation outside and
making them aware would help them from the troubles they may face when they would be in
those heavy rains.

Another environmental factor could be an earthquake or any other natural factor which directly
affects the occupancy of the hotel and the sales.

The solution or the rules of the hotels in India are that they do the drills for the emergency
situations frequently to help employees understand what is supposed to be done in hard and
emergency conditions.

Legal Factors

This also includes the health and safety laws, the recent outbreak of the Swine Flue [ H1N1 virus] would
have been the upcoming serious factors for the VIts and the service they could have provided is the free
checkup of the incoming guests for the swine flue.

As of now India does not have age discrimination law but does have the disability discrimination
law and every star hotel is supposed to provide a room for the disabled guests and having
special facilities for the blind deaf and the leg or hand impaired people.

This room is generally located on the first floor near the lift entrance and is always taken