Chapter 8
Factors Affecting Tourism and Hospitality
Industry
Tourism industry is not a different thing to other
industry. In fact, it is a very sensitive industry as it
always reacts to various factors from outside its
operation such as political, security and safety,
economic, legal, etc. Tourism is actually engaged in
promoting a country or a destination, as well as
services.
Uncontrollable Variables that Affect the
Hospitality Industry
1. Economics – there could be a drop in
discretionary spending as well as
dependence on the continued patronage of
the business community.
2. Legal Changes – changes in the law can
also affect companies within the hospitality
industry and cannot be controlled. This can
change the way how businesses are
conducted. For instance, a change in the tax
laws that raise the price of gas will affect
tourism and cost for the hospitality industry
as well.
3. Technology – as technological
development continues, tourism and
hospitality industry is affected. As new
technologies are made available,
companies within the industry are forced to
adapt to the changes or get left by the
wayside.
4. Competition – competition is heavily
affected by economic and regulatory
factors.
Critical Success Factors in the Tourism
and Hotel Industry
1. Location – The location of a business is the
place where it is situated. There are a
number of factors that need to be
considered in choosing a location for a
business. One of the earliest decisions any
entrepreneur has to make is where to locate
his or her business. In order to do this, he or
she has to make a careful assessment of
costs.
2. Global Outlook – tourists deciding where to
take their next vacation can choose from
destinations all over the world, and can
easily research the quality of local hotels
when making their selection.
3. Quality Management - Multifaceted and
goes beyond the concept of customer
service to include additional factors such as
employee satisfaction and involvement. By
concentrating on employee satisfaction as
well as customer service, a hotel can
increase the likelihood that all its
employees will provide excellent customer
service as well.
4. Flexibility – Customers can have
completely different expectations, so
managers need to be given the authority to
make decisions to accommodate them
when possible. A manager with the
authority to make exceptions when
appropriate is in much better position to
turn a situation around and earn a good
reputation for customer service and high
quality.
Internal & External Factors That
Affect an Organization
- Every organization has its own culture. Almost
everything that affects an organization’s ability
to compete and respond successfully to changes
in the external environment.
- Ultimately, the organization’s success or failure
– is an aspect of that culture.
- Internal factors determine how the organization
moves forward, both as a self-contained
organizational entity and in response to its
external environment.
INTERNAL FACTORS:
1. Mission – clear sense of ultimate purpose
and knows how it intends to fulfill that
purpose.
2. Leadership – great leaders inspire and
direct.
3. Communication – successful organizations
thrive on robust communication practices,
teams and leaders communicate freely and
to improve results. Two-way
communication up and down the
hierarchical structure extends from top to
bottom.
4. Organizational Structure – organizations
with flat structures, few hierarchical layers
outperform organizations with hierarchical
structures.
 5. Learning – as technological advances lead
to faster rates of change, successful
organizations need to find a way to respond
that encourages innovation and builds into
every employee’s experience the
opportunity to learn and explore.
EXTERNAL FACTORS:
1. Training & Development – diverse
workforce needs to be trained from top to
bottom on certain specific values and
standards.
2. Company Culture – own special way of
doing something. Corporate culture are
specifically designed to enhance the guests’
experience.
3. Developing Talent – when a company
takes time to train people, it is easier to
recognize the talent that can be developed
for higher management positions
4. Problem Solving and Service – needs to be
developed in every staff. Things go wrong;
it’s part of life. The goal is to resolve
problems so the guest feels satisfied about
the solution.
5. Safety and Security – If a danger presents
itself in the hotel, guests look to staff to
direct them. Staff should be trained as to the
basics of safety. The Tourism industry must
also prepare staff and develop plans in the
event of natural disasters and potential
terrorist activity. If the staff doesn’t know
what to do, chaos will emerge, because
people panic while they are trying to
determine the best course of action.
External Factors Affecting the Tourism
Industry:
1. Human Factors
2. Socio-cultural Factors
3. Economic Factor
4. Technological Factors
5. Political Factors
6. Violence and Terrorism Factors
7. Legal Factors
In the Philippines, Some Factors are
also being considered:
1. External Security Challenges
- as global trade in goods and services and
international investment become important
drivers of the country’s economic growth,
government shall continue to be vigilant in
responding to crimes that thrive under an
environment of increasingly open borders, such
as terrorism, human trafficking, arms and drug-
trafficking, and smuggling. Territorial
integrity shall be exerted to safeguard the
country’s interests within maritime areas,
notably its Exclusive Economic Zone (EEZ).
2. Nontraditional Security Challenges
- Nonmilitary and transnational threats, otherwise
called nontraditional security concerns, also
challenge the country’s peace and security.
Armed personnel of government shall continue
to assist other government agencies during
emergency situations, such as during disasters
caused by natural hazards and health
pandemics, as well as in securing vital
development projects under threat of
destabilization.
3. Winning the Peace
- Promotion of the peace process shall be the
centerpiece of the internal security program, as
a testament of government’s commitment to a
policy of peace, reconciliation and
reunification.
- Peace is not just the absence of war or conflict,
rather it is the sum total of conditions that ensure
human and social wellbeing in all its
dimensions. This entails winning the hearts and
minds of the aggrieved and afflicted while
retaining the allegiance of the rest.
Julienne T. Gabo | 1 BSTM-A