External Environment Factor of Hotel Industry

What is external environment? External environment is about everything outside and organisation's boundaries that might affect it. External analysis focuses on identifying and evaluating trends and events beyond the control of a single hospitality firm, such as increased foreign competition, population shifts, an aging society and advances in information technology (Costa and Teare, 2000; Nebel, 1991; Pearce and Robinson, 1991).A business does not operate in a vacuum. It has to act and react to what happens outside the factory and office walls. These factors that happen outside the business are known as external factors or influences. These will affect the main internal functions of the business and possibly the objectives of the business and its strategies. Our group will discuss about the hotel management in hospitality industry. The external environment should be divided into two parts when conducting an external analysis: the remote environment and the operating environment (Nebel, 1991). The remote environment of a hospitality firm consists of the following key factors: economic forces, political, governmental and legal forces, social, cultural, demographic and environmental forces, technological advancements/forces and competitive forces (Harrison, 2003; Woods, 1994). While a firm may not have control over these forces, management must carefully analyze all the external forces while conducting external analysis. Base on the research paper (unknown,2010) has found the structure, management and functioning of a hotel are not only determined by its internal environment ''relates to the culture and climate and to the prevailing atmosphere surrounding the organization'', but also are influenced strongly by a range of volatile, external, environment factors. In order to be effective and maintain survival and growth, the organization must respond to the opportunities and challenges, and the risks and limitations, presented by the external environment of which it is part.

There are few types of external environment that would affect an industry. First of all, political factor is one of the external environments which could affect the industry. For example, every country have political unrest and instability, some just not that serious. For country that have border conflicts and unstable government like Cambodia and Thailand or country that have war and conflicts such as Philippines , Middle East, Iraq and Iran (Reno,2012) which have higher chances of ruling party overthrown and change of government policies, their hotel industry might not get a good interests. The first idea that comes to mind is 9/11; the terrorism attack on September 11, 2001 is the heart of the problems that created serious damage to the global economy, especially the US economy. Economic recovery remains elusive for the United States today after terrorists destroyed the World Trade Centre. After the terrorist attack on September 11, airlines and airports were forced to close for three days in the U.S, many people became afraid to fly(Yuan, 2003). Cancelled flights definitely affect hotel industry. Once a country is stable, more investment opportunities will be realised thus attracting more and more investors. This will reflect positively and directly to the local businesses, as even the citizens will have full confidence with them. In the politics of the day, business success depends on politics by a great percentage and in many ways. Politicians are usually the people controlling the operations of a government and will decide which countries to trade with as well as the trading conditions (Reno, 2012). But the condition can be changed by the country; there are some easy ways to improve their hotel industry, such as provide ideal locations for investors to develop their resorts. Other than that, they can also promote tourism by opening up market sector. By this way, they can increase their country's population and solve the problem of the external environment.

Next, social cultural factors also one of the external environments that would affect an industry. Residents are the main income an industry, so the hotel industry has to do research of the residents in that area (Reno, 2012). For example, the management level has to know about how consumers, households and communities behave and their beliefs which are changes in attitude towards health or a greater number of pensioners in a population. A hotel's image could build up by having a group of good worker, the attitude of the servicer is very important for a hotel. If the area around the hotel industry is well known with the crime behaviours, solutions have to come out to solve it as fast as possible. This is because this could make a customer feel that it's valuable and safe to spend or stay in the hotel. Management level has to know also the people who have higher expectation of living standard and people who changing trend to focus on work-life balance lifestyle. For instance, compare the emergence of China and India's high net-worth individuals and rising affluence of Asians who are more willing to spend on luxury goods, which is more worth for a hotel industry to start their industry or organisation. Since recently everywhere support environmentally friendly, and green colour is the meaning of environment protection, a hotel with a lobby with a design of preservation of natural habitats could attract more environmentalist which are everywhere in the world and it's in large number. Besides that, this could increase the awareness of social responsibility and got stronger support for green activist, in other side, the hotel will be well known automatically. Apart from that, guests should be classified into market segments based on their travel motives. Such classification is vital as the firm's marketing strategy will be based on this particular work. A guest classification of a hotel might include individual transient guests travelling for business, groups of guests on business, individual transient guests travelling for pleasure, groups travelling for pleasure, and others. It is possible to classify a hotel's guests according to geographic, demographic, buying behaviour, and sometimes even personality and life-style characteristics(Reno,2012).

Another external environment factor would be technological factor. Technological factor included communication and information of the hotel industry. In this century, technologic is very well developed. Every human being attach importance to ease of access and communication for time saving and some of them might searching for a hotel who use of green and clean energy such as solar, wind and hydro(Reno, 2012). For example, with online booking system, consumers can save their time and cost by going here and there to book a hotel. Every consumer would like to compare and get the cheapest price, so with online forum and travel