The tourism Industry outlines all the pleasure commercial activities relevant to travel. It also means traveling and staying in an environment outside of your usual environment for more than 24 hours and less than one year. Today, we’ll discuss the PESTLE analysis of Tourism Industry; it focuses on external environmental factors like; political, economic, social, technological, legal, and environmental factors.
Political Factors Impacting Tourism Industry
Some of the main political factors in the Tourism Industry PESTLE analysis are as follows;
I-Government Regulations
Governments and countries keep changing their tourism policies and regulations over time. It is highly dependent on the type of government that comes into power. For instance, the nationalist government introduces strict policies and the liberal democratic government introduces flexible policies. Tourism companies should keep in mind the changing government policies.
II-Tourist Visa
Speaking of government policies, getting a tourist visa for the country is a great example of government tourism policies. Some countries reduce the tourist visa fee and make the visa process much simpler and easier. For instance, Turkey, Dubai, and other countries have no visa policy for US and Western citizens. They could visit the country without acquiring any visa; they could visit the country with only a passport. Such flexible policies are attracting a lot of new potential tourists.
III-Political Stability
A stable political environment plays a key role in the growth of businesses and companies. When the country is going through political turmoil, violent activities, roadblocks, processions, and others; such an environment won’t attract potential tourists. However, the safety and security of travelers is the priority of tourists and visitors; and they want a peaceful environment.
Economic Factors Affecting Tourism Industry
Some of the main economic factors in the Tourism Industry PESTLE analysis are as follows;
I-Economic Stability
Economic prosperity and financial stability are the keys to the growth and development of Tourism Industry. For instance, when the country has a higher unemployment rate, lower purchasing power of people, higher inflation rate and expensive products, and others; people won’t spend their income and resources on tourism. Tourism is a luxury and it is only feasible when people are prosperous and have a stable source of income.
II-Infrastructural Development
The government and private sector investment in infrastructural development is a basic necessity for the Tourism Industry. The government should decrease taxes and attract local and foreign investors for the development of road networks across the country, petrol stations, hotels, and restaurants. Without tourism infrastructure development, the Tourism Industry won’t flourish and attract many new potential visitors.
III-Competitive Market and Cost Efficiency
The consumer market has become highly competitive with various businesses and companies operating in the market. It offers a lot of cost-efficient opportunities to price-conscious customers. For instance, shared rides and public transport a great options; Airbnb offers a cheaper accommodation option than luxury hotels.
Social Factors Impacting Tourism Industry
Some of the main social factors in the Tourism Industry PESTEL analysis are as follows;
I-Customer Needs and Preferences
The consumer market needs, preferences, and demands keep changing over time due to various factors. Tourist companies should keep in mind various growing market trends like online booking options, traveling arrangements, luggage management services, and others. It allows them to improve the customer satisfaction level and offer a better experience to the customers.
II-Cultural Diversity
The trend of cultural diversity is also increasing with the growth of the tourism industry. When people from various cultures, regions, and markets from across the globe come together in one place; they create a highly culturally diverse place. Tourist companies should focus on promoting cultural diversity to attract tourists from various backgrounds.
III-Globalization
The world is moving towards globalization and it has a great impact on the tourism industry. It has made people curious about learning about various cultures and visiting various places. As a result, it is amplifying the growth of Tourism Industry by attracting a lot of new travelers and visitors.
Technological Factors Affecting Tourism Industry
Some of the main technological factors in the Tourism Industry PESTEL analysis are as follows;
I-Online Booking
Tourism Industry is investing a lot of resources in the development of an active web platform that focuses on attracting customers and offering online booking services. Internet and digital tech platforms have made it convenient for customers and travelers to make traveling and accommodation arrangements without physically visiting the country. It makes traveling a seamless experience for many travelers and visitors.
II-Digital Payment
Tourism companies are investing in digital and online transaction methods and platforms. It allows travelers not to worry about carrying cash while traveling; they could simply pay to various parties online. Online transactions and payment methods have further amplified the growth of digital and tech businesses.
III-Advanced Technology
Tourist companies are investing in the latest advanced technology like AI, ML, data analytics, IoT, wifi service, and various latest tools and equipment. The latest technological investment improves the overall customer satisfaction level by offering them a smooth and luxurious experience.
Legal Factors Impacting Tourism Industry
Some of the main legal factors in the Tourism Industry PESTEL analysis are as follows;
Regulatory Compliance
Tourism companies need to comply with the government regulations of different countries. They comprise of visa regulations, infrastructure development policy, foreign tourism policy, and others. Regulatory compliance would help them to smoothly perform their tourist operations without any delays and disruptions.
Environmental Factors Affecting the Tourism Industry
Some of the main environmental factors in the Tourism Industry PESTEL analysis are as follows;
Environmental Sustainability
The Tourism Industry needs to make a strong commitment to environmental sustainability. They should take sustainability initiatives like renewable sources of energy, organic and ethical sourcing, and biodegradable packaging. Environmental sustainability initiatives would help them to smoothly perform their operations.
Conclusion: Tourism Industry PESTLE Analysis |PESTEL Analysis of Tourism Industry |External Environmental Analysis of Tourism Industry | Strategic Analysis of Tourism Industry
After an in-depth study of the pestle analysis of Tourism Industry; we have realized that Tourism Industry is the world’s most growing and lucrative business venture. If you are learning about the Tourism Industry PESTLE analysis; then you should keep in mind the abovementioned external environmental factors like; political, economic, social, technological, legal, and environmental.
Ahsan Ali Shaw is an accomplished Business Writer, Analyst, and Public Speaker. Other than that, he’s a fun loving person.
