External Business Environment in Hospitality Industry

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Introduction to Rooms Division Management Assignment of
External business environment in Hospitality industry.

Table of Contents

Introduction 3 “If we do same thing today as we did yesterday… …we will get the same results tomorrow’’ 1. Forecast for 2009. 4

1. Travelers still tend to plan the trips. 6 1. Hotel challenge to manage Marketing expenses (Costs). 7 2. Economic requirements. 9 3. Seeking for opportunities. 10 Conclusions and Recommendations 11 Bibliography 12


We are where we are in this recession and as an industry we must look objectively at the market as it stands and device strategies which will enable our enterprises to remain strong and successful. It is worth remembering that while some contraction in the hospitality sector is inevitable, our industry continues to be large, dynamic and innovative and the major driver of the economy. In a market environment, which has changed dramatically in a matter of months, hospitality enterprises can continue to achieve success by exceeding the expectations of customers in key areas such as service, product quality and competitive pricing. We can do this by lowering our cost base, rising productivity and taking innovative approach to product development, marketing and human resource management.

Forecast for 2009.

The Irish tourism industry is bracing itself for a difficult year ahead, following the dramatic slowdown in the global economy in 2008. The past year has seen difficult trading across our sector with client companies in difficulty over a period of some eighteen months and with the prospect of several more months to come. As a result, the Market is clearly a “buyers market” and is very rate sensitive. Tourism revenues in Ireland declines by two per cent to 6.3bn euro last year, as a result of the first decline in visitor numbers in seven years, reported Failte Ireland in its end of year review in January. Overseas visitor numbers to Ireland fell by three per cent, while for the first time in five years, domestic holiday visits were static, it said. While the number of visitors traveling to Ireland on business or visiting friends and relatives were up last year, holiday visits declined by eight per cent. Trade from the US market was hardest hit, with visitor numbers down nine per cent and spend falling by a massive 18%. The British market, hit particularly by the weakening of sterling, dropped by 5%, with spend experiencing a lesser decline of two per cent. Declines were felt across the country, including Dublin, with the South hardest hit due to the importance of the US and GB markets in the region. Three-quarters of hotels reported a decrease in business last year, with one in 10 recording increase. Four in five hotels also reported a drop in profitability, with RevPAR down in 75% of properties. Approximately one in 10 B&Bs, guesthouses and caravan/camping operators experienced growth in last year, while on in five hostels and self-catering properties saw an increase in business. In the year ahead, Failte Ireland predicts that the tourism industry will experience a further decline, with the US and GB markets continuing to show vulnerability while the mainland European market offers ‘’best prospect’’. More than half of hotels, B&Bs and self-catering operators expect a decline in business this year, with...
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