By matching the potential consumer demand with suitable products and service, their needs and wants can be satisfied. Organization can also maintain its competitive edge and achieve the organization goal. Therefore, understanding consumer demand is an important part of running international hospitality business, especially in the current dynamic global environment with incessant innovation. There are plenty of factors that can influence consumer demand for international hospitality products. As a result of this, different types of hospitality products emerge.
Factors influencing consumer demand for international hospitality products Political Impacts
According to Shoemaker et. al. (2007), the political environment refers to the rules and regulation that can either encourage growth and trade or impede it. The government decisions can stimulate or stifle the social, economic and technological development. Therefore, they are probably the most critical and uncertain factor that determines how consumers can act and affect their demand. Government policy and legislation affect the consumer demand in many ways. Reich (1997) gives some example of legislation, like various types of taxation and legislated methods of collection, city ordinances and zoning, health codes and inspectors, building code, etc. Consider the opening of China. This led to many opportunities for hotels as consumer travel more and their demand increased. An article (2003) published by the Hong Kong Trade Development Council stated that a war will inevitably affect consumer sentiment. The cost of production of goods and services will be influenced by oil price surges. Hence, consumer demand will be affected. Terrorism can also affect consumer’s demand on security. This show that political stability is a critical factor influencing consumer demand.
The economic condition play a significant role in changing demand for hospitality markets. Reich (1997) notes that “economy will always be shift between peaks and valleys, business must be prepared for inevitable decreases and increases in demand for their current product or service at current prices.” Some Common economic concerns are disposable income or discretionary income, recession, inflation, interest rates, easy or tough credit, trade barriers, and tariffs. A particularly significant impact on demand for international hospitality product is mentioned by Shoemaker et. al. (2007). This is the fluctuation in currency values. For example, if the U.S. dollar is strong relative to other international currencies, it means that items in the United States are more expensive than the same items in other countries: as such, the United States is a less attractive place to visit. These factors combine to influence the consumer confidence and the demand of international hospitality products. When consumer confidence is high, hospitality markets thrive, while the hospitality markets decline when consumer confidence is low.
“The consumer demand is profoundly influenced by the cultural beliefs and values. The cultural values and beliefs are so deeply embedded in the minds of the consumer that sometimes the choices made by them are unconsciously influenced by culture.” Williams (2002).
1. Increase in dual-income households
As mothers who once prepared the traditional evening meal are now in the workforce, there are more meals eaten away from home. Hence, there are more opportunities for restaurants and hotels. In addition, those families will choose restaurants and hotels with higher quality as their discretionary income in increased.
2. Women’s increasing role in the direct purchase of hospitality service CRANE, Randall (2007) states that men and women have different travel behaviors. Also, women are now having more financial strength and traveling more for business.
3. Desire for a better quality of life
Due to the increase in...