Hospitality Industry and Hotels

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PEST/ Competitor Analysis of HHM

PEST Analysis

PEST analysis is a regularly used and immeasurably valuable method for analyzing the external environment of an organization. In particular, this technique splits the general environment into four distinct areas and encompasses pretty much everything that can influence an organization. These four particular areas are political, economic, social and technical (Thompson and Martin, 2010). In regard to political factors, the company accomplishes the proficiency to ascertain the kind of role that the government plays within the industry and marketplace. For example, does the government carry out interventions in the customary forces of demand and supply? It also deliberates whether there are any government rules and regulations. Secondly, the economic factors take into consideration the particulars of the conditions in which the national and the international economy are in. Third, with regard to social factors, the technique accounts for the considerable aspects that point out the relevant changes or alterations expected in issues for example lifestyle, consumer preferences and attitudes, demographics as well as the cultural principles and buying patterns of the customers. Lastly, the technological factors take into account the technological changes in the industry (Henry, 2011). The following section will encompass the PEST analysis of Hersha Hospital Management (HHM) in an attempt to understand its external environment.

1. Political

i. Government Incentives

With HHM being in the business of developing hotel establishments, the government can influence the company's business endeavors through tax incentives and subsidies. For instance, according to Enz (2010), numerous cities in the United States have directly funded the development of hotels and other properties such as lounges purposed to serve local convention centers.

ii. Rules and Regulations

Hersha Hospital Management has to make certain that it follows the rules and regulations that are set by the lawmakers and the government. This largely impacts the company not only in being in compliance with the rules in the United States but also on the global level. Another aspect is making certain that the company has the legal permits required for establishing and constructing any of its properties. For instance, any hotel built next to the airport has to have been set in a legal and well-approved land (Enz, 2010).

2. Economic

i. Charges and Prices

This is linked to the financial aspect of the company and market place. Some of the aspects that are bound to impact HHM include the rate of prices charged to its consumers for both limited and full services. The hospitality industry offers competitive prices for different packages offered to the consumers.

ii. Economic Status

The hospitality industry faced a significant dip in business due to the economic recession.

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However, with the American and global economy improving, Hersha Hospitality Management is expected to face an increase in business activity, with more and more consumers having capital to spend for luxurious activities such as hotels (Enz, 2010).

3. Social

i. Consumer Preferences

A key social factor that influences the business encompasses the preferences of the consumers. The eating or dining inclinations, preferences or dispositions of the people in the chosen business setting will have an influence of the decision-making when it comes to marketing approaches. The expectations of the consumers might constantly change and go beyond what HHM can offer. For instance, this can include lifestyle changes and also needs for assistance.

ii. Competition

Hertha Hospitality Management faces intense competition in the market and industry as a whole. This is largely owing to the fact that different companies offer different packages to consumers, which can sway the consumers to them. What is more, with the constant change in consumer preferences, the company faces increased rivalry to ensure that it increases not only its consumer base but also revenue generated (Enz, 2010).

4. Technological

i. Technological Innovations

In the present world, regular consumers as well as business consumers expect the hotels provide services that are linked to technological innovations. As pointed out by Enz (2010), this encompasses different aspects such as teleconferencing, provision of smart cards implanted with microchips for payment of all services with the main purpose of ensuring that the experience provided to the guests and consumers is top-notch. In addition, the hotel can have automatic check-ins so as to have constant aspects of the consumer preferences for better service (Enz, 2010).

ii. Connectivity

Connectivity is another element in technology that influences the hospitality industry in the contemporary. Consumers have a preference for having suitability, expediency and convenience in their experience and services provided. In the present day, the internet is a necessity for all hotels. However, connectivity is a key element in the sense that the hospital has to make certain that phones, fax machines, in-room systems, reservation systems are all connected to increase the level of convenience for the consumers (Enz, 2010).

Porter's Five Forces Analysis

1. Competitive Forces

The level of competition in the hotel industry is very stringent not only on a nationwide level but also on an international scale. The competition more so is about to increase and become more intense with the fight for business travelers. However, it is imperative to note that Hersha Hospitality Management has a competitive advantage, as it is one of the few large hotels to be fully digitized. Taking into account that HHM provides.....

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