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Eight international factors affecting hotel operations

OPINION

by Manos Lygerakis

There is a series of factors affecting operations of hotels

Political events

General political conditions can actually affect how hotels operate. Particularly, terrorist attacks, wars, refuge crises and in general emigration play a significant role in shaping market interest as to the choice of holiday destination. For example, potential outbreak of war in Turkey will lead tour operators or even state authorities to issue directives discouraging holidaymakers from visiting Turkey for safety reasons. Consequently, this is going to bring about reduction in bookings for this destination. On the other hand, if these very same circumstances are taken advantage of properly by hotel operators in competitive countries, they might be able to see an increase in their bookings.

  1. Financial conditions

Changes in financial conditions, especially in target- group countries of a hotel business, can affect operations directly. Inflation rates, increase in unemployment and prices of goods in high demand, and salary cutbacks are only some of the factors leading to reductions in the number of hotel guests. For example, a hotel in Dubai, collaborating with Greek tour operators, is going to be affected by the international financial crisis also affecting Greek economy, so fewer Greeks are going to visit the hotel and less money is going to be spent there.

  1. Weather Conditions

Extreme weather conditions, such as earthquakes, floods, tsunamis and tornadoes may not only actually destroy hotels but can also affect hotel operations outside the country. For example, an earthquake in Japan may cause loss of homes, businesses or income for a Japanese resident. As a result, he is going to lose interest in holidays and a series of cancelled bookings will follow, consequently affecting destination countries. ακυρώσεων στις κρατήσεις ξενοδοχειακών μονάδων στις χώρες προορισμού, για όσους έχουν προγραμματίσει ήδη τις διακοπές τους.

  1. Technology

Constant advancements in technology is yet another reason affecting hotel operations. Accessibility to information is becoming more and more convenient, making requirements for product and services quality even higher as well as requirements for digital marketing, mainly, and customer management. Social media also play a determining role and so does constantly changing technology equipment and software (PMS, channel managers etc.), assisting operation of hotels. For example, as the number of OTAs (Online Tour Operators) increases together with tourist sites with comments, combined with user-friendly and convenient environments, accessibility of customers to the hotel details also is on the rise. Consequently, hotels will have to invest on better promotion, taking full advantage of technology advancements while at the same time improving its products and services.  Hotels also need to manage their online reputation properly to become more competitive.

  1. Cultural changes

Changes in habits and perspective globally, constantly create new needs both in tourism industry, in general, and in hotels in particular. Decriminalization of cannabis, marriage between homosexual couples, swinging, non- criminalized prostitution etc. may classify a country, a city or an area as a tourist destination recommended for customers interested in one of the above. A hotel may need to change the mode of its operation to cover the needs created as a result of these changes. For example, a hotel in Amsterdam may have had to change the way it operates the hotel café and the products offered there to adjust itself to the market needs when, a few decades ago, cannabis was decriminalized.

  1. Εcology

Global pollution and irrational waste of energy and natural resources created serious problems, climatic change and the need to explore new alternative solutions. Environmental awareness created on a global level also affects the operation of hotels. Every new achievement regarding saving on energy, either in terms of heating water, or lighting and general operation, is directly applied to hotel units. The same goes for recycling, reduction of irrational waste of paper and of other natural resources and use of recyclable materials. For example, as bioclimatic architecture is expanding, more and more hotel units will need to adjust, mainly because they contribute to saving energy resources, secondly, because they are competitive and also because they save a lot on money spent on energy consumption.

  1. Market Trends

International market trends are constantly changing and are creating new horizons for tourism professionals who follow these trends. Thematic tourism is gaining ground while becoming more and more specialized. For example, religious tourism may be monastery or church etc., gastronomic tourism may be exclusively wine or educational tourism etc. Of course, hotel units are affected by these changes. for example, a hotel unit built on a plateau may take advantage of the  surrounding area and create a golf court but if the current trend is trekking or mountain bikes and its geographical positions is suitable, it can adjust its operations by including these trends in its services in order to attract new  target groups.

  1. Competition

Maybe the most important factor affecting business operation of a hotel is monitoring business attitudes of the competitors internationally. This includes building infrastructure, the quality of the product in general, as well as of the services provided, prices, promotion strategies and customer management strategies. For example, a 5-star hotel in Spain naturally follows activity of corresponding hotels in Greece and Turkey, which are international competitors in terms of services and prices. If a hotel only follows local competition it may end up cut-off from international standards, especially at times of globalization.

Manos Lygerakis, Communication & Strategic Planning Counsellor, Administration Executive on luxury hotels, working for Vasilakis SA, Lasithi, Crete.

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