Pestle analysis for Crowne Plaza Hotels in UK - Essay Example

Crowne Plaza Hotels in UK have hotels in different locations and offer competitive prices and excellent services. However, the macro-environment impacts the hotel operations and the profitability. To alter its strategy, PESTLE analysis would be used as a basis. PESTLEPolitical The government is trying to use the London 2012 games to boost the nation’s tourism industry and expects to invite 4 million extra visitors to the country (Higgins, 2011). The government is also withdrawing financial support to the star rating schemes as the scheme has failed to drive up standards or acknowledge the importance of value for money.

Economic Currency fluctuations are common but with the Euro being the common currency all over Europe, it provides some stability. The economic condition is stable. The hospitality sector can create 236,000 jobs in the next five years (Nand, 2011). The sector is a major contributor to the UK economy as it generates 8 percent of the total employment (BHA, 2010). The nation has the highest GDP growth rates in Europe (Crown, 2011). The UK economy shows a turn for the better after the recession but there is still short to medium term risks of a robust economy (PWC, 2010).

Social UK is the gateway to Europe and has the world’s single largest market – the European Union – at its doorstep (Crown, 2011). The average weekly household expenditure on restaurant and hotels was approximately £40 in 2007 (Dugmore, 2010). However, consumers are price conscious and it would be difficult to increase average achieved room rate (eHotelier, 2008). Moreover, the domestic business market has shrunk both in terms of leisure holidays and corporate travel. Not much of occupancy growth expected in 2011 (PWC, 2010).

Consumer spending is expected to grow but could be impacted by higher taxes. Technological The sector uses multimedia technologies to enhance productivity and improve business opportunities. It is now an indispensable tool for all business functions from production to marketing (Sigala, Airey, Jones & Lockwood, 2001). As competition intensifies employees are required to demonstrate their ability to use and create knowledge from the information gathered. Thus, hotels have to be equipped with the latest information system and must have a strategy and process in place to use the information gathered.

Online reservation system enhances advance bookings from across the globe. Legal The government has raised the Value Added Tax (VAT) rate in the United Kingdom to 20% which is the highest in the hotels in the European Union (Nand, 2011). This could adversely impact the hotel business. Environmental Holiday destinations are sold as opportunities to stay at some paradise but their activities do more damage to the nature than preserve them (Ethical Consumer, 2007). This has made the consumers conscious and they want ethical organizations, green hotels and eco-friendly products.

Even if the government does no impose environmental laws and social reporting, the consumers would boycott such hotels. Conclusion The legal and political environment suggests that visitors would tend to keep away from UK and visit Paris instead where the VAT is much lower thereby resulting in cheaper holidays. Consumer spending has decreased and the consumers are environmentally conscious. Thus, Crowne Plaza Hotels in UK would have to ensure no rise in hotel room rates (as taxes are steep), maintain eco-friendly environment, and utilize the latest technology in all its functions.

References:BHA. (2010). Policy. British Hospitality Association. http://www.bha.org.uk/policy/Crown. (2011). UK business environment. UK in Bolivia. http://ukinbolivia.fco.gov.uk/en/business/investment-in-uk/uk-business-environmentDugomore, K. (2010). The research value of commercial data. UK Data Forum. http://www.esrc.ac.uk/_images/K%20Dugmore%20presentation%20-%20Commercial%20Data_tcm8-8501.pdfeHotelier. (2008). UK Hotel sector well positioned for challenging 2008 says PKF Report. http://ehotelier.

com/hospitality-news/item.php?id=A13583_0_11_0_MEthical Consumer. (2007). Ethical buyers guide to hotels. http://www.ethicalconsumer.org/FreeBuyersGuides/traveltransport/hotels.aspxHiggins, S.M. (04 March 2011). UK government releases Tourism Policy paper. Hotelnews.com http://www.hotelnewsnow.com/articles.aspx/5080/UK-government-releases-Tourism-Policy-paperPWC. (2010). UK hotels forecast 2010 and 2011: On the comeback trail. Hospitality and Leisure. http://www.lotus-uk.co.uk/pdf/pricewaterhouse-hospitality-and-leisure.

pdfNand, L.F. (10 January 2011). Will the UK VAT rise affect the hotel industry? Hotelnews.com http://www.hotelnewsnow.com/Articles.aspx/4716/Will-the-UK-VAT-rise-affect-the-hotel-industrySigala, M. Airey, D. Jones, P. & Lockwood, A. (2001). MULTIMEDIA USE IN THE UK TOURISM AND HOSPITALITY SECTOR: TRAINING ON SKILLS AND COMPETENCIES. Information Technology & Tourism, vol. 4, pp. 31-39. http://tourism.wu-wien.ac.at/jitt/JITT_4_1_Sigala_et_al.pdf