Source: own picture
Today I am going to talk about the UK, since I arrived here in 2014, I had no idea how beautiful this country is, after 8 years living, I can say that it is a country full of interesting places to see and learn and the most important thing is that England is full of history. I am going to try to explain various aspects and factors related to the hospitality industry, is the strategic management framework that addresses the impact of business external factors to the business operational process (Lynch, 2019).
The political situation and Government support of the target market can influence the business decisions. In the context of France, the political stability and Government support is impactful to the hospitality businesses. The UK is having the constitutional monarchy under the framework of the Parliamentary democracy. The UK Government has implemented the Eat Out to Help Out scheme for reducing the negative impact of lockdown (Araujo, 2019). The Government has exempted the micro, small and medium-sized businesses for their contributions to the social security schemes in the lockdown period. The large businesses are allowed to obtain deferments on the social security and tax contributions. In the aspect of taxation, Government has initiated planning for deferring the Corporate Property Tax (CFE). The Government agency is working with the professionals of hotel, cafes, restaurants, and tourism sector to resume the service as they are key to French economy and employment. However, the political decisions like Brexit formation have affected the UK hospitality industry growth due to the complexity in the immigration process. The UK Government has undertaken the negotiation in the Brexit-EU aspect to foster the business environment for the hospitality industry (EC, 2020). Hence, the political stability and proactive Government support has a positive impact to the Premier Inn hotel chains.
The economic conditions and situation have influenced the UK hospitality industry. The economic freedom of the UK is positive due to the high score of 78.4 points in the year 2021. The regulatory efficiency of the economic aspect of the nation has a direct influence to the hospitality sector of the UK. The UK hospitality sector has a positive role in enhancing the economy of the nation. Moreover, 7.1% of the total jobs in the UK is from the hospitality sector. The hospitality sector in the UK is the 7th largest employer in the world. However, the inflation rate has increased in the UK by reaching up to 13% in the year 2022 (TradingEconomics, 2022). Currently, the household spending has been increased by 0.6% in the year 2022 (BBC, 2020). Hence, the market share of the hospitality industry has been declined by 1% in the year 2021 due to the high inflation rate and low consumer purchase power. The outbreak of the COVID-19 pandemic has influenced the entire hospitality industry of the UK. The economic output was declined by 90% in the hospitality sector of the UK and also reported to low cash reserves and profit (Baum, 2021).
Source: https://researchbriefings.files.parliament.uk/
Furthermore, the pandemic has also influenced the hospitality organisations to implement redundancy programmes for setting of the business losses. More specifically, 660,000 job cuts in the UK hospitality sector can be spotted owing to the outbreak of the COVID-19 pandemic. The revenue of the hospitality sector in the UK was declined by 40% in the year 2020-21 (Statista, 2022). Hence, the negative impact of the economic factor can be observed on the hospitality sector. Therefore, the fluctuation in the economy owing to the high rate of inflation and low consumer purchase power in the post-pandemic period has influenced the hospitality operation of the Premier Inn in the UK.
The changing taste and preferences of the people across the world can be analysed in the hospitality sector. As per the cultural aspect, the people of the UK are welcoming for the foreign visitors and guests. The ‘English’ is the primary language of the UK that has considered around 98% of the total UK population. The ‘Christianity’ is the dominant religion of the UK but also include Islam, Hinduism, Buddhism and Sikhism (Brownell, 2017). Moreover, the key festivals and celebrations include Christmas Day, New Year celebration, Easter Sunday, Queen’s birthday etc. In accordance to Hofstede Cultural Framework, the cultural differences can be observed among the nations. As per the individualism dimension, the high score of 89 can be observed in the UK (Hofstede, 2022). Hence, there is a difference between the Asian and European people in respect to individualism and collectivistic aspect. The high level of consumerism for the new and innovative products can be spotted in the UK’s culture. Furthermore, the UK is one of the five permanent members under the UN Security Council and also a founding member of NATO. Hence, UK has undertaken a global stance in the foreign policy making function. However, the negative side of the socio- cultural factor is the rising operational cost due to the ‘shorter product life cycle’ that has influenced the investment decision of Premier Inn. Presently, the positive socio-cultural factors have influenced Premier Inn to invest around £6 million in developing new properties in Cornwall and Devon. Therefore, the positive as well as negative impact of the socio-cultural factors to the hospitality operations of Premier Inn can be spotted.
The rapid advancement of the technology and high proliferation of the internet has stimulated the hospitality business operations. In the era of globalisation, the advancement in the technology has triggered the innovation in the hospitality service functions. The global smartphone penetration has reached 79% in the year 2020 (Chen, 2020). More specifically, the UK has also observed a high smartphone penetration with 88%. The social media users of the world have reached 4.74 billion and that is equivalent to 60% of the global population. Furthermore, it is projected that the social media users will reach up to 6 billion in the year 2026 globally. In the UK, there are around 58 million social media users.
Source: https://www.statista.com/
The growing social media users and high smartphone penetration are the causes to the high internet usage in the UK. In consideration to the technological factors, Premier Inn has initiated ‘Hub’ that offers stylish and smart rooms across London and Edinburgh locations of the UK (Hub, 2022). The rooms are connected with slick touch screen, control panel, free superfast Wi-Fi, temperature control and relaxed beds. The smart rooms are connected with SMART technology to support the tech-savvy customers across the world. Premier Inn as a leading hospitality organisation under the Whitbread Plc that has undertaken partnership with Amadeus by forming integration with the new hospitality platform (Amadeus, 2022). Premier Inn has considered seamless and simple customer journey by integrating the new technology in the customer registration process. The new technology will provide personalised guest experience with the application of the Amadeus. In the operational process, the integrated cloud-based CRS will provide real-time information to the business by making more informed decision that tailor’s guests need’s need. The new platform will also assist guest’s payment in an efficient and safest way. Furthermore, the data centric model applied by the new technology in the end-to-end operational process will facilitate the top management of Premier Inn to overview the service delivery of the hotels in different locations of the UK. The fastest and effective decisions related to the strategic management of Premier Inn can be implemented efficiently with the intervention of the technology. Hence, the latest technology application is creating convenience to the customers in booking the services. Furthermore, the popularity of the social media platform has influenced Premier Inn to focus on the digital marketing strategy for creating high brand awareness. The high Brand Awareness through social media platforms is the positive side of the technological factors. Moreover, the reach of the advertisement of Premier Inn through the social media platform can be enhanced. The fastest technological development has the positive impact to the operational aspect of the organisation. Moreover, the technological development and innovation has enhanced operational efficiency of Premier.
The environmental factors are the area of concern for the hospitality businesses due to the Government regulations and people awareness. The climate change issue, high carbon emission and global warming has affected the natural resources (Gunden, 2021). In the context of the UK, the air pollution is one of the significant negative environmental aspect that bring to numerous lawsuits against the Government for exceeding legal limits of Nitrogen dioxide. The quality of air is going negative and possess biggest environmental health threat by causing 40,000 premature deaths in a year and increase the cost up to £20 billion annually. In consideration to the air pollution and climate change issue, ‘sustainability’ is a key concern in the UK that focuses on the recycling, carbon neutrality aspects and reduction of food waste for having a positive impact. The hospitality businesses are prioritising the ‘sustainability’ by preserving natural as well as cultural attractions for compelling the tourists to increase their visits. In the context of Premier Inn, sustainable measures like waste reduction, energy efficiency lighting system and selecting the products that has minimum impact on the environment. Moreover, Premier Inn is working on the operational efficiency to reduce the carbon foot pint by 50% within the year 2025 (WhitebreadPLC, 2020).
Source: https://www.premierinn.com/
Premier Inn is utilising green gas across their properties in the UK to commit on the energy efficiency sustainable business goals. Therefore, the environment factors have influenced Premier Inn in the UK to adapt the sustainable business measures. Furthermore, the sustainable measures can create positive brand reputation in the market and eventually create positive vibe among the guests across the world.
The regulations, standards and legal compliances are the part of the business environment that influence the business decisions. For example, the Equality Act 2010 in the UK has restricted the employers to adapt discriminatory practices to the employees on the ground like race, religion, gender, disability etc (Legislation.Gov.UK, 2010). Moreover, under the Health and Safety regulations, the hotels, pubs, restaurants, cafes etc. need to follow safety standards to avoid the penalties. There are multiple regulations in the UK that needs to be followed. Hence, the application of legal compliances increases the administrative function of the businesses. However, following the guidelines can create goodwill among the guests and other stakeholders.
The size of the UK hospitality industry and its linkages with tourism and contribution to the UK economy
The hospitality industry provides food and accommodation services which include restaurants, catering services, pubs, hotels, bars, and other kinds of hospitality services. The UK hospitality or hotel industry has generated a $16.4 billion market size in 2022 where 45% of hotels are growing in 2022. It has been expected that the UK hospitality industry will grow by 20.3% which will increase the higher demand for staycations and attract more international tourists to the nation. In 2019, the UK hospitality industry reported that there were 35,105 licensed restaurants which has increased to 36,035 (stampede, 2022). The present market size of the UK restaurant industry has risen to 17.8 billion British pounds which contributed an increase of 6.6 billion pounds from 2021. The UK hospitality sector generated £59.3 billion in 2019 which contributed to 3% of the UK’s economic output. In a time the globalizing world, worldwide travel, and tourism are growing at a rapid pace (commonslibrary, 2022).
Source :- https://www.statista.com/chart/23338/uk-hotel-occupancy- forecasts/
Tourism and hospitality help each other to grow as it is very much important to find appropriate food and accommodation services near tourist locations. Various hotels directly work with travel and tour operators to increase their hotel sales. For example, Premier Inn hotel works with many Travel management companies and online hotel booking agents to support their consumers with excellent hospitality services. ATPI, Clarity, ClickTravel, INNTEL, Roomex, and many other travel partners of Premier Inn hotels together make a profitable business in the UK business sector (premierinn, 2022). In 2019, over 21.7 million tourists visit London which sharply decrease to 2.7 million in 2021 due to the outbreak of the coronavirus pandemic which majorly impact the annual revenue of the UK hospitality sector. After reopening the hotels and other restaurants, bars, and cafes, over 7.1 million foreign people visits the UK. Because of public health restrictions, the visitor’s economy is completely fallen down in the UK which majorly impacts the business of the Hotel and accommodation business (statista, 2022). So it can be said the hospitality sector is closely linked with the travel and tourism sector.
Source:https://ec.europa.eu/eurostat/statistics- explained/index.php?title=Tourism_statistics_-_annual_results_for_the_accommodation_sector
According to the 2020 march report, the UK hospitality sector generated 2.53 million jobs which resemble 7.1% of total employment in the UK. A large number of younger people, foreign workers, and minority background people are associated with the UK hospitality sector. Approximately 2.4 million people are employed in the UK food and accommodation service sector in 2021. So it seems like, after Covod-19, hospitality has grown more and generated employment opportunities after a huge economic fall due to public health restrictions. In April 2020, the UK hospitality sector has seen a major economic downturn where the economic output was 42% lower than the previous year. In 2020 and 2021, the industry share of the UK hospitality sector fell from 3% in 2019 to 2%. The total number of hospitality businesses has fallen by 10% between January 2020 and 2021. The UK hospitality labour market has also fallen by 90,000 or 3% because of a 1.3% decline in jobs all over the industry. The government of the UK has protected many jobs by implicating Coronavirus Job Retention schemes and they have furloughed 2.13 million jobs. With the reopening of the hospitality businesses in 2021, the industry faced labour shortage for that reason, the industry created 166,000 job vacancies in February 2022 (Office for National Statistics , 2021).
The latest potential trends in the global and UK hospitality sector are changing the future of the industry. After the economic downturn of the Covid-19 pandemic, the hospitality sector assures a safe hotel stay due to the popularity of hygiene protocols, contactless technologies, and staycations. Some important trends in the present UK hospitality sector are listed below
Providing more workspaces to travellers - With the increase of the global health crisis, big tech companies are adopting flexible work culture by introducing working remotely. For that reason, hotels are capitalizing on the trend of increasing workspace within the hotels. Hotels are providing ample plug sockets, great coffee, and free high-speed Wi-Fi to visitors.
Holistic Hospitality - Due to the Covid-19 pandemic, the wellness industries are partnering with the hospitality industry providing self-care and preventive medicine services such as spa facilities, health diagnosis technologies, conducting personal group sessions for maintaining an emotional balance for people, and providing better sleep to visitors.
Sustainability - It is one of the most emerging hospitality trends where most hotels adopt sustainable behaviours like eliminating unnecessary paper consumption and reducing food wastage for considering ethical and environmental principles of business. Most hotels ethically produced organic materials and switch to eco- friendly living by installing solar panels over the roof for producing greener energy.
Digitalized guest experiences - The hotel administration is now controlling various aspects such as guest cycle and experiences by adopting digital and contactless services (Sudhagar, 2019.). The widespread use of technology- assisted options like voice control, contactless payments, mobile check-in, and biometric scanning by unlocking smartphones and laptop facilities.
Virtual and Augmented reality - Nowadays guests want to experience virtual reality materials of services provided by Hotels. For that reason, hotels are making content that provides graphical information about hotels and provides tourist information apps to check out their services.
The trend of Staycations - In 2020 and 2021, The UK hospitality sector has seen a rise in staycations. Because of airline price hikes, covid testing requirements, foreign travel become very much expensive for family vacations for the weekend breaks (Muritala, et al., 2022). For this reason, people are spending holidays closer to home for budgeting issues which have seen a rapid increase in local holiday spending and most hotels are spending more on local business than international markets.
Premier Inn is offering great quality food and a flexible choice of living with their Premier Inn CleanProtect initiatives which maintain high standards of hygiene and cleaning protocols so that each people can experience a clean and safe environment while visiting their hotels (premierinn, 2022). By installing protective scenes and auto-dispense hand sanitizer Premier Inn is minimizing check-in contact. They also frequently clean the areas of loft controls, and door handles and employ 9000 strong housekeepers to carry out additional checks on rooms. Premier Inn Free Wi-Fi service is another important service given by Premier Inn to their visitors so that each people can enjoy their staycations. Consumers can upgrade to ultimate Wi-Fi by paying £5 for 24 hours with a Premier Inn business card or PayPal (premier inn, 2022). Even consumers can connect 3 devices with this Ultimate Wi-Fi feature in every room of Premier Inn. Premier Inn Breakfast Buffet offers unlimited food options starting from just £9.50 and gives a 20% discount on Meals in their On-site restaurants.
Premier Inn needs to digitalize more and automate the guest experiences in order to keep up with new hospitality trends of digitizing the hotel rooms and housekeeping service. Sustainability is another important secretion for Premier Inn's hospitality business as it is very much important for ethical resourcing from local suppliers and includes eco-friendly hospitality services within their service chain. They need to strengthen their marketing department also to increase consumer engagement.
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