1. Globalandforcesaffectinginthehospitalityindustry
(PART1OF2)
DHT 1113 Introduction to Hospitality and Tourism Industry

2. OUTLINE
• Economic Climate
• Demographics and socioeconomic trends
• Psychological trends
• Technological trends
• Political Forces

3. ECONOMIC CLIMATE
(BM-IKLIM)
Global and forces affecting in the hospitality industry
DHT 1113 INTRODUCTION TO HOSPITALITY AND TOURISM
INDUSTRY
TEXT BOOK pg72

4. MEASURING ECONOMY
• Economic: Science relating to production, distribution and use
of good and service
• Econometrics: tools to select locations, making management
decision, and determining if an existing operation is being put
its best use
• Through statistical method analysis (econometrics), expert can
predict trends in economy

5. MEASURING ECONOMY
BUSINESS CYCLES
• Four Phase
 Expansion
- Growth, economic activity increase
- Hospitality developers usually find loans
or funding for new sites or renovations for
existing sire more readily available
 Peak
- Uppermost point in a cycle, following
expansion
 Contraction
- Recession phase
- Higher employment
- Good time for an entrepreneur to buy an
existing midpriced hotel then reposition it
to target the economy hotel market
 Trough
- The lower most point, following
contraction
INDEX OF LEADING INDICATORS
• Analysts need to watch the direction of
several factors over a period of time
- Average workweek of production
workers in manufacturing
- New manufacturing orders for
consumer goods and materials
- Percentage of companies receiving
slower deliveries form suppliers
- Contracts and order for equipment and
fixed plants
- Applications for new building permits
- Change in manufacturing inventories
- Stock Prices
- Money supply
- Consumer Expectations

6. A GLOBAL ECONOMY
• World-wide economic activity between various countries that are
considered intertwined (saling berkaitan) and thus can affect other
countries negatively or positively.
• Malaysia is a highly open upper-middle income economy.
“The activities of Tourism Industry in Malaysia are directed
towards improving the Malaysian tourism services. Owing to
the good standards the Tourism industry in Malaysia
maintains, it also appeals to many investors to invest in the
Malaysian tourism industry. This inflicts a positive influence on
the economy of Malaysia. Tourism industry in Malaysia
provide ample scope for employment. There are several people
who are recruited either in tourism industry directly or related
industries.”

7. A GLOBAL ECONOMY
INTERNATIONAL INVESTMENT
• Wide open opportunities
the growing global market
offers, higher complexity,
diversity
• Relate differences in
culture, language, and
complex political and legal
issues
• International business :
deal with the daily
adjustment of exchange
rates among the different
currency
INTERNATIONAL TRADING BLOCS
• Group of countries that
join together in some form
of agreement in order to
increase trade between
themselves and/or to gain
economic benefits from
cooperation on some level.
Three prominent examples
are:
- APEC
- CAIRNS GROUP
free up trade in agricultural
products.

8. GUEST RESPONSE TO ECONOMIC
FLUCTUATIONS
• Cost-saving travel strategies
- They took vacations closer to home
- Stay for shorter period
• Mini Vacations
- Provide expand marketing opportunities for resort hotels
located near major metropolitan markets (KL, Penang and
etc..)

9. DEMOGRAPHICS AND SOCIOECONOMIC
TRENDS
Global and forces affecting in the hospitality industry
DHT 1113 INTRODUCTION TO HOSPITALITY AND TOURISM
INDUSTRY
TEXT BOOK pg77

10. WHAT ARE DEMOGRAPHICS?
• One of the best source information about a nation
• Provide fair complete picture of the population at a given time
• Business take advantage of cultural shifts in order to spot
opportunities or problems
• Example : Size and growth of population, distribution, and
vital statistic such as amount of education, size of families,
family income, ethnic, background, age and gender

11. DEMOGRAPHIC RESEARCH AND
LIFESTYLE TRENDS
• Health conscious
• Lifestyle information of particular interest to the hospitality
industry includes research on the tendency to travel
• Trend towards all women adventure trips
• Eating Trends