Question

Explain how supply and demand domestically and globally impact the hospitality industry.

Answer 1

Solution

The supply and demand are called the market forces.The market depends on these forces.In today's scenario,world became a global village meaning most of the countries' economies have opened up with regards to trade.So,any industry related to any country is directly (or) indirectly dependent on the actions and reactions of the economy of another country.

Example - I am taking the case of Indian Hospitality industry.

Hospitality industry includes operations related to hotels,restaurants,cruise ships,theme parks,convention centres etc.,

Since the population of India itself is huge,the domestic demand itself for the Indian hospitality industry is huge.When it comes to supply also it is very good.The Indian economy is growing at a average rate of more than 6% every year.So,the GDP per capita of the country is also increasing.

Since,Hospitality Industry is a part of tourism industry and classified under services sector it is critical for the country.In fact,it is very critical for the Tourism sector also.

Since the Brand Equity of India has seen a tremendous growth,the tourism sector is experiencing a tremendous growth.So,there are ample of opportunities for the hospitality industry to grow as they both are interdependent.

So,in addition to the demand from the local population,the demand from across the globe has also increased. In order to cater to the increased demand,the Indian hospitality industry is seeing a massive growth.Global investors / funds / businesses like Brook Field holdings company,etc., are showing interest and also have acquired many properties in this industry as they have realized the growth potential in the same.