Which economic factors affect the hospitality and tourism industry?
Economic Factors:Economic conditions like inflation, unemployment, recession, and economic instability directly impact the hotel business.
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A research review of 100 studies with models to measure tourism demand (Lim 1997) confirmed that higher income and transport costs are important factors. In addition to these she also pointed out that the relative price level between countries and the exchange rate figure frequently in explanatory models.
Tourism Impacts. Tourism can generate positive or negative impacts under three main categories: economic, social, and environmental. These impacts are analyzed using data gathered by businesses, governments, and industry organizations.
Economic leakage in tourism is one of the major negative economic impacts of tourism. This is when money spent does not remain in the country but ends up elsewhere; therefore limiting the economic benefits of tourism to the host destination.
It creates jobs, strengthens the local economy, contributes to local infrastructure development and can help to conserve the natural environment and cultural assets and traditions, and to reduce poverty and inequality.
Factors influencing the internal environment are: tourism and human resources, organizational-management structure, infrastructure, material and technical base, technological factors.
While there are several social factors which influence sustainability of any business in general, the ones which are most relevant to the hospitality industry are: Education, Life Expectancy, Income, TV index, Newspaper index, and PC index.