Market Analysis Tools For The Tourism Industry

 Market Analysis Tools For The Tourism Industry

Political environment

Political factors globally have a direct and deep impact on the hospitality industry. The political environment, especially in fragile states, has a direct impact on building ‘trust to travel’ among tourists be it local, regional, or international. In the event governments recognize tourism as a major factor in their economies, it has opportunity to flourish. Retrospectively, in countries of conflict tourism is one of the industries to get hit first and impact felt in many parts of the economy.

Economic Environment

Tourism has a positive impact in reaching out to each corner of the economy of a country. In many cases SME’s play a vital role in supporting employment and grass root level industries. Tourism is about experiences. In meeting the needs tourism plays a vital role from hotels to a taxi driver. Therefore, the rolling effect on the economy is great.

Economic policies which induce investment in tourism also plays a major role. Assets such as hotels, theme parks, entertainment centres, etc are extremely capital intensive and contribute to employment. This impacts positively on local disposable income-generating a gradual surge in market forces.

Environmental factors

Sustainability is a key concern in tourism too.  The focus has now shifted on ecotourism, agritourism and sustainable tourism. United Nations has also recognized officially the Sustainable Tourism for Development. Other environmental concerns are also important for tourism operators including transport operators and the hotel and restaurant brands. From managing the ecological impact to waste management, all these concerns are important for the tourism operators.

One even important thing is the impact of weather conditions on travel and tourism. This has a direct correlation to the seasonality and monsoon period where tropical countries tourism depends heavily.

Social factors

Like economic trends, social trends to shape the tourism industry. The effects too can be just as deep. Before the COVID 19 hit the consumer preference in lodging has taken a shift in recent years. Their preference has shifted in the favour of private accommodations. The rise of Air BnB is a challenge for the established names in the hotel segment. Similarly, ride-sharing brands are rising against the traditional taxi and cab brands. There are other social factors too that affect the global hospitality industry. Consumer preference is an important factor which is heavily based on our perceptions and experiences. With the dawn of AI and ML tools, we see a great shift in giving that extra edge to marketers to position the necessary social factors to one’s advantage.

Legal factors

The regulatory environment in the tourism industry is complex. It is because both labour and public security are important concerns. Apart from it, there are other laws too that influence the sector but public safety and labour laws are the two most important concerns for it. Tourism brands including the airlines cannot lose focus on risk management or they risk losing market share. The legal pressures and challenges in the tourism environment are big. Airlines have focused a lot on making air travel safer. For brands operating in several nations, it is important that they are familiar with all the local laws

Technology factors

The technological factors have emerged to be the facilitators of demand for the tourism industry in the 21st century. From airlines to booking and even marketing, technology is the biggest influencer. Technology has facilitated communication and transfer of information bridging the gap between several parts of the world. More and more tourists now conduct research and try to find the best deals before they go for the final booking. If new tourist destinations have emerged then the credit to a large extent goes to the rise of technology.  Hotel and airlines brands are using information technology to serve their consumers better.

Digitalization factors

Hotel and airlines brands are using digitalization to serve their consumers better. Undoubtedly, digital technology is an enabler of tourism. However, that does not reduce the value of human touch. The hotel industry has upped the use of technology. Kiosks are more in use and digital check-in has grown popular. Social media and even mobile technology are affecting it. Mobile technology has fuelled the growth of tourism by facilitating mobile bookings, check-ins, messages, and several other things. However, the true power of mobile is still unexplored and mobile technology, cloud technology and the Internet of Things will affect several new changes. Digitalization is shaping the travel experience at many other points too including on the ground and in the air.

Safety factors (especially with Covid-19)

Safety factors play a key role, especially on personal and location-based hygiene factors. On a world with Covid -19, safety will be of paramount and will be a major priority for the travel industry.

The travel industry will be racing towards implementing careful and practical safety precautions when opening the industry. There will be more emphasis towards industry-based safety precautions which even could be introduced in a legal framework as the livelihood of an industry may be based on how safe it is.

Renuke Coswatte

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