Question

Hotels, restaurants, attractions and resorts have had to adapt to rapidly evolving uncontrollable environmental forces that have placed the consumer in a much more powerful and informed position than in the past. What are these factors and how do you think they have affected parts of the hospitality and tourism market? 

Answer 1

The instructor can lead students to answer this question by reminding them to focus on the three environments that influence companies (internal environment, microenvironment, and macro-environment) and how these have changed over time as well as give special attention to how the COIVID-19 pandemic is a huge macro-force. Also note the shift in power from the Travel Agent using a GDS to the consumer assuming the role of the travel agent themselves, fueled by the increase in internet access and technology ownership. This is because many younger students have never used a travel agent and do not understand their relevance within the industry (especially in the luxury market). Do touch upon how mass-market travel agencies have become experience centers rather than just sales centers.

The students will note that one of the most significant changes in the past 20 to 30 years has been the switch from traditional to electronic media. This is amplified by the fact that consumers can instantly access media reports and online content. They will note the expansion of social media, mobile apps, and other online services. 

Social media and blog reviews provide consumers with unedited and unfiltered views and options. Brands can be instantly and irreparably damaged by negative reviews. Comparison sites with high levels of user reviews for their ratings have had a massive impact—not only rating but the position in which the hotel, restaurant, or attraction features on the search page. In addition, the comparison sites will also identify the cheapest price for the customer; this means that the business must be competitively priced. The Symphony Ocean View Hotel in Ilfracombe, Devon, in the U.K. suffered from 213 “terrible” reviews on TripAdvisor over a short period of time. The hotel was accused of having “disgraceful customer service.” Many of the problems were derived from customers being unable to obtain refund for bookings cancelled because of the COVID-19 pandemic. Regardless of what happens in the long term, the hotel is permanently saddled with a huge number of poor reviews on a very influential review and booking site.

Technology also allows consumers to bypass part of the industry by renting directly from homeowners (such as Airbnb), this means that hotels in particular are competing against individuals who are not constrained or overburdened by overheads and regulations.