There are certain factors in macro-environment that could affect decision making and strategies of organizations. Sudden Changes in Tax, Imposition of Laws, Increasing or Reducing Trade Barriers, Cultural & Demographic Changes and Changes in Political Environment & Government Policy are some of the key examples of macro environment. These changes could bring certain positives as well as negatives for every business. PESTEL (Political, Economic, Social, Technological, Environmental and Legal) Analysis is a tool which is widely used by business managers for analysis of these critical factors. It is very helpful for development of strategic decision making. The Premier ...view middle of the document...
The Prime Minister also stated that government support for businesses would be focussed on ‘high growth industries’ and ‘working strategically to strengthen them’ (06 January, 2011).
Establishment of regional growth fund for hospitality industry is also a major sign of expected growth in the sector. Hospitality could generate 236,000 net additional jobs across the UK by 2015 bringing the total number employed by the British Hospitality Industry to 2.76 million (British Hospitality Association 2011).
The budget hotel sector has been one of the greatest success stories in the UK hospitality industry over the last 10-15 years, and continues to be so; “The budget hotel sector is still the fastest growing hotel sector in the UK” (Deloitte & Touche, 2000, p. 3). It is estimated that UK budget hotel sector is going to be more than double in size in next 20 years and will account for more than a quarter of the overall hotel market by 2027 (Kerstin Kühn, 12 December 2007).
The UK budget hotel market has also broken the £1b barrier for the first time in 2006, new research has revealed. Analyst firm Mintel found the market grew 38% between 2002 and 2006, three times as much as the overall UK hotel market (worth £11.2b) which increased by only 12% over the same period.
The current growth in supply and market volume has increased considerably as leading operators are engaged in a frantic scramble for market dominance. World over tourism and hospitality sector is generating more and more profits.
The current economic recession could be a major cause of concern for hospitality sector. The economic recession has hurt the people from all walks of life and forcing them to be more careful in spending. People have to make choices before spending each penny. However due to government’s substantial reduction in interest rates helped to minimise further rises in unemployment during 2009 (Euromonitor, 2010). As a result of these measures it is considered that spending power of consumers going to increase steadily.
This is a very encouraging factor for Premier Inn for expansion of their budget hotel chains. With this growing demand of the sector they are making tremendous expansion of their businesses. Currently Premier Inn is the UK’s largest and fastest-growing budget hotel chain, with over 590 budget hotels and more than 43,000 rooms across the UK and Ireland. They have big expansion plans and aim to add another 55,000 rooms by 2014. They are also expanding their outreach across the globe by establishing their hotels in Dubai and India. They have established three hotels in Dubai and one in India at Whitefields, Bangalore, with another due to open in Delhi in 2011.
The social circles and changing life styles & living standards has brought many social and cultural changes around the world. As the living costs are increasing, people prefer low cost products/services accompanied with highest standard of value for money. These social changes are...