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Environmental Scan

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SWOT analysis of the hospitality industry

Strengths

The strengths in the hospitality industry include the ability to influence Economic and

service growth by the creation of employment. Availability of Advanced technology which is

enhanced engagement on social media investors in the hospitality industry is reaching out to

loyal customers brand ambassadors to endorse an organization’s product and services (Jahaya

& Ahmad, 2017). Increased interaction between customers has helped investors in the

hospitality industry build a loyal customer base.

Weaknesses

The major weakness in the hospitality industry is the delivery of similar services

across different hospitality organizations. Competition between different firms is also a major

weakness since it has intensified the importance of maintaining customer loyalty. The failed

expectation is a weakness experienced when an organization fails to meet the expectations of

a customer.

Opportunities

Studies explain that the hospitality industry has opportunities to grow through five

major dimensions which include practicing generosity improving performance developing a

stronger host-guest relationship, enhancing safety and security, and providing rewards for

loyal customers and brand ambassadors (Vaduva & Takacs, 2017).

Threats

Customer attitudes can influence the spread of negative reviews which affects

performance in the hospitality industry. The development of an online marketplace for

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accommodation is a major threat to the traditional hospitality industry. The market

penetration of Airbnb has influenced the reduction of customers.

Internal factors that could affect the hospitality industry

Internal factors affect daily managerial operations which have a negative impact in the

hospitality industry. The level of innovation is the first and major internal factor that could

affect the hospitality industry. Studies indicate that investors have adapted to the use of

different advertising strategies to create long-term relationships with their customers.

Therefore, different organizations should work with reputable advertising agencies to reach a

wider customer base and retain existing customers.

The cost of workers is the second factor that could affect success in the hospitality

industry. The global hospitality industry reached total revenues of over 7.60 trillion dollars in

the past decades. Over 250 million people are employed in the travel and tourism segment

across different countries (Jahaya & Ahmad, 2017). Travel and tourism make more returns

than the oil and automobile industries globally. Organizations should create investment

opportunities that allow all employees to retain employment or access compensation during

tough economic times.

External factors that could affect the hospitality industry

External factors affect the ability of an organization to make good decisions and

deliver quality services. Lack of access to modern technology is an external factor that could

affect success in the hospitality industry. The hospitality industry is among the top multi-

billion-dollar investments globally (Wijesooriya, 2018). The industry is comprised of

different segments which include recreation, food and beverage, travel and tourism, and

accommodation. The use of modern technology and state-of-the-art equipment will ensure the

delivery of quality services that meet the customers' expectations.

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Poor infrastructure also can affect success in the hospitality industry. Studies explain

that different countries have experienced economic and social growth through the hospitality

industry. Studies indicate that an estimate of 9.1% of the global GDP comes from the tourism

segment (Wijesooriya, 2018). The reputation of hospitality organizations mainly depends on

the kind of reception received by clients while booking and during their stay. Therefore, the

availability of well-built roads and fast internet promotes massive growth since hospitality

organizations can easily connect with clients from different regions.

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References

Jahaya, M. J., & Ahmad, F. (2017). Surviving in the hospitality industry: enhancing business

performance of SP Inn Hotel.

Vaduva, S & Takacs, J. (2017). A SWOT analysis of the global hospitality industry. Revista

economică.

Wijesooriya, T. N. (2018). Issues and Influences Affecting the Global Tourism and

Hospitality Industry. 19th Conference on Postgraduate Research, International

Postgraduate Research Conference 2018, Faculty of Graduate Studies, University of

Kelaniya, Sri Lanka.