PESTEL Analysis Of Tune Hotels UK

PESTEL Analysis Of line of products Hotels UKThe hotel industry within the United farming is a highly competitive market with many different hotel organisations, much(prenominal) as Tune Hotels, each trying to turn aboutthing unique, desirable and profitable. It is thitherfore all important(predicate) for organisations within this industry to remain constantly aware of the foreign factors that could potentially affect their performance and productivity. In this report I am going to identify and explain the key political, economical and socio-demographical factors that are shortly having an effect upon the industry these are three headings within a postage stamp analysis. PESTLE analysis is a tool that can aid organisations when reservation strategies by helping them chthonicstand the external environment in which they manoeuver in the present and future (Renewal Associates, 2003). Once I have do this I forget past draw upon my analysis and conclude with my thoughts and recommendations virtually the proposed UK expansion of Tune Hotels.The UK Hotel IndustryAs for most business organisations, it has been a tough time financially due to the recent global turning point however, according to an article on www.hotel-industry.co.uk, things are looking up for the hotel industry. disdain the time out, the UK hotel industry is continuing to expand, with over 10,400 rooms opening in 2010 and a further 43,000 for the period 2011-2015.(Hotel Construction, 2010). The article goes on to mention how consumers are exactly opting for low-cost, budget branded hotels, much(prenominal) as Tunes, during this time of financial uncertainty.political surroundThe political environment is an area that business organisations need to proctor constantly as politics can be very unpredictable and influential at times. (Palmer, A. Hartley, B. 2006, P7-8) This is because governments have the power to introduce legislation and regulations that may have a profound effect o n organisations. Whilst the UK is a relatively free market, the government lead still keep a virtually on what is going on in the private sector to check off that businesses are functioning within the best interests of the country.These are just close to(a) of the political factors that may have an effect on the UKs hotel industry* digital Economy Act 2010 The Digital Economy Act 2010 is an act of fantan which was put in place mainly to decrease the amount of illicit file sharing and copyright infringements that currently takes place in todays digital society. save this has been met by fierce criticism from establishments, such as hotels, that offer free Wi-Fi internet connections hot spots. If hotels guests break this law whilst using the hotels connection, then it is the hotel that is, ultimately, held responsible and consequently face the possibility of having their internet connection change by the service provider (Benson, P. 2010). This may put hotels in a sticky situ ation as they allow have to decide whether or not to start charging for the convenience of internet connectivity which could put potential customsers off.* new(a) Immigration Policies New immigration policies from the spinal fusion government have caused some(prenominal) concern for the UK hospitality industry. Caps on immigration outside of the European stinting Area could neglect the issue of skills shortages in the UKs hospitality sector, claim the recruitment and Employment Confederation, who go on to say Apart from operational roles such as chefs and bar staff, a shortage has been highlighted in management skills. Shortages in the UK market continue to exist with only 10 per cent of hotel managers and sextuplet per cent of restaurant and catering managers having qualifications at managerial level (Essentiallycatering.co.uk, 2010).stinting Environment* Crowded Market There is currently much competitor for Tune in the UKs budget hotel market at the moment, especially in capital of the United Kingdom. Brands such as easyHotel, Travelodge and postmortem Inn all offer a similar service to that of Tune Hotels, but at lower prices and some of them offer extras such as towels within the room price. Travelodge currently offers rooms at a promotional price of 19 and, like the Premier Inn chain, their rooms are family-friendly and they provide most extras free of charge, states Susannah Streeter (2010).* amplification in UK tourism spending The adjoin in UK visitors comes after the recession and the fall in sterlings value against the euro and dollar deterred Britons from making overseas trips. As a result, spending by tourists in the city hit a record 10.5billion (Sri Carmichael, 2009). This is great news for the hotel industry.* VAT Increase As the coalition government start to act upon the UKs budget deficit, the recent VAT augment from 17.5% to 20% will no doubt put more tonal pattern on the consumers disposable income and put more strain on sl ews budgets. Lisa Francesca Nand (2011) states that the increase will discourage spending and deter UK-based guests and overseas visitors alike. However in that location are positives that can be drawn from this VAT increase for some businesses. Such increases will continue to divert customers outside(a) from highly priced hotels with underutilised facilities as Mark Lankester suggested in the Tune Hotels Press Release (2010). People will be looking for cheaper No frills accommodation such as Tune Hotels. The low cost, limited service business model has been a turn out mastery over the past couple of years with in otherwise industries organisations such as AirAsia, an affiliate company of Tune Hotels, boasting success.Socio-Demographic Environment* London 2012 Olympics The London 2012 Olympic Games have understandably been descri chouse as an opportunity of a lifetime for the UK hospitality industry by hotel-industry.co.uk. The games will bring in an influx of people from all over the demesne to London which will undoubtedly mean change magnitude demand for hotels. However I conjecture that this will only bring limited custom for Tune Hotels as the games are stretched out over a devil week period, I moot that the people who are staying in London for a couple of days will be more than happy with the service that Tune Hotels provide as a comfortable bed and a hot shower is all that most people implore during a short hotel stay. On the other hand, I think long-stay visitors will be put off by the inability to budget under the pay-as-you-use system operated by Tune Hotels.* Location Location is very important within the hotel industry, even more so with the London 2012 Olympics around the corner. Hotels in London need to be close to transport links, attractions and other creature comforts in order to draw in a healthy song of customers as nobody wants a hotel too far away from their craved location. This is a potential problem for Tune Hotels and t heir proposed UK expansion as there could be some difficulty in finding appropriate sites for their aspiring(prenominal) figure of fifteen hotels in an already saturated market.Recommendations and conclusion wholly in all I think Tune Hotels have a fairly good chance of making the UK expansion a success with their low costing business model, particularly with the Olympics on the horizon and the increased demand for hotel accommodation in London that the games will generate. However, I think it would be wise for Tune to offer some kind of inducing or special Olympic package to potential guests during the games to lure them away from rival hotels an all-inclusive option for the guests staying for longer periods, maybe?However, I think fifteen hotels is a little ambitious in the competitive jungle of London and Mark Lankester should think about lowering his aspirations ever so slightly to and start talking about more realistic song like five or six. This would mean Tune could conce ntrate on having a smaller number of hotels in more desirable places as opposed to a large number of hotels in less sought-after(a) after locations.The expansion would also create a number of jobs for the people of the UK