EG700-AU MSc International Hospitality Management
EG700-AU MSc International Hospitality Management
1. Introduction
The hospitality industry is considered to be a significant contributor to the overall GDP of Paris due to the high footfall of international travellers which drives its other sectors like retail and entertainment. Paris is a global cultural capital which represents the major hospitality sector as its integral part which boosts its economy. This study aims to analyse contemporary issues experienced by the hospitality industry of Paris concerning a renowned luxury hotel business named Le Meurice. Its specification factors influence the business landscape of the hospitality industry and connect those issues with real-world implications along with highlighting the significance of addressing these issues. The study critically evaluated various influences of terrorism on the international tourism market as well as on Le Meurice’s business. Gaining a critical understanding of these factors can help to understand effective mechanisms to deal with the challenge to ensure sustainable business growth in future.
2. Analyse significant factors affecting business
The performance of the hospitality industry is dependent on various factors which makes it vulnerable as changes in the external environment can have major effects on business outcomes. Luxury hotel organisations like Le Meurice based in Paris which is a part of the Dorchester Collection are also influenced by various factors (Le Meurice, 2023). One major factor which has a significant influence on overall business growth and development of its business are the economic conditions of Paris. Changing economic factors like the fluctuating economic health of the country can have major impacts on the overall demands of luxury hotel accommodations. Consumers usually tend to cut back on their luxury spending during economic downturns which have adverse impacts on the overall revenue of the hotel. Changing trends in the tourism industry also have significant impacts on hotels in Paris. Changing international travel patterns, the Global Health crisis and geopolitical tensions can influence the overall number of visitors in Paris which reduces Hotel Occupancy rates.
The hotel industry of Paris is highly competitive due to the significant presence of a large number of luxury hotels and alternative lodging options like Airbnb that affect market share and price in the strategies of Le Meurice. Apart from these various external events like natural calamities, global pandemics, man-made disasters like terrorism and others can also influence overall rates of hotel bookings which adversely impacts the businesses of hotels like Le Meurice. There are various internal factors also which affect customer output in the hotel industry for instance effectiveness of marketing and branding of the organisation play a crucial role in attracting and retaining customers. As this industry operates in the service sector, customer satisfaction is one of the critical success factors for companies like Le Meurice. This requires companies to apply various approaches and strategies to improve their overall services which can improve their customer satisfaction (Sathiamoorthy et al. 2020). Satisfied customers of content to give positive reviews online which improves the overall brand image of Hotel organisations resulting in better business outcomes and profitability.
External factors like technology and innovation, regulatory environment, sustainability practices and global crisis also have major impacts on the business performance of Le Meurice. For example, in order to operate smoothly the company needs to follow local and international regulations that are required to be followed by the hospitality industry. This typically involves safety standards, licensing, employment regulations and others. Moreover, due to rapid advancement in technology, significant ways of performing business across various industries have been transforming dramatically which has also influenced customer behaviour and preferences (Raja and Raghu, 2020). This requires companies operating in the hospitality industry to keep up with technological advancements and integrate suitable technology in their business to develop innovative solutions and integrate sustainability quotients in their business. Unexpected Global events like natural disasters and other Global emergencies like war and terrorism attacks can have severe impacts on the hospitality and tourism industry which can affect the business of Le Meurice drastically.
Modern customers are increasingly concerned regarding sustainability and environmental impacts of businesses which affects their choices majorly. The tourism and hospitality industry contributes largely to increasing pollution and carbon emissions which require sustainable approaches to be adopted by organisations operating in the hospitality industry. This requires the company to implement eco-friendly practices and elaborate its corporate social responsibility to improve its overall brand reputation and increase its bookings.
Additionally, Rapid fluctuations in economic conditions resulting in currency exchange rates can influence the overall cost of international travel and also impact the total number of tourists travelling to Paris. Lower tourist footfall eventually results in decreased bookings for Le Meurice which can have adverse impacts on its profitability and performance (Kubickova et al. 2019). Therefore, it is important for Hotel companies like Le Meurice tomorrow to factor properly and adapt to changing market conditions while also implementing proper strategies in order to stay competitive and run their business smoothly in the dynamic business environment of the hospitality industry.
3. Critical appraisal of the impacts of terrorism on the international tourism market
Terrorism can have a major influence on the hospitality industry which can affect guest perception and the overall operation of businesses in this industry. It can create a sense of fear and anxiety among consumers due to which the tourism and hospitality industry can experience a striking decline in tourism. Terrorist attacks lead to a significant decline in tourism and hotel booking as visitors and travellers usually perceive an affected destination unsafe for travelling. Moreover, due to such instances, the government also issues various travel advisories which can also discourage travellers in areas affected by terrorist attacks due to increased security concerns (Nadeem et al. 2020). The hotel industry also experienced a significant drop in their occupancy rate due to increased cancellations and decreasing number of new bookings caused by terrorism which can result in major financial loss and operational challenges. A major decline in the number of tourists and occupancy rate can have a direct impact on the revenue of hotels along with restaurants and other hospitality facilities which experience decreased patronage. Additionally, due to the increased risk of terrorism, Hotel companies are also required to invest significantly in their security measures which can increase the additional burden of overall cost for its operations.
Terrorist attacks taking place in a reputed hotel can also increase concern regarding security failure which damages brand reputation. Developing trust among customers after such instances and restoring a positive image of the business can take a long time and is usually a challenging process even after significant improvements are made in security. Terrorism events also lead to a significant rise in insurance premiums for Hotel organisations and related businesses in the hospitality industry due to the reassessment and adjustment of risk levels by insurers. This incidence also leads to a major shift in the travel behaviour of consumers due to travellers choosing different destinations that are perceived to be safer (Khan et al. 2020). This sudden shift in the travel pattern of consumers not only affects the hotel industry but also influences the overall economy of the country adversely. This factor usually has long-term implications for destinations affected by terrorist attacks. The hospitality industry often provides services like meetings, conferences and events. Terrorist attacks in significant regions can result in relocation or cancellation of such events which have a huge impact on revenue generation of Hotel organisations.
This incident also led to hotel companies collaborating with local authorities and government agencies to improve their security measures and respond to potential threats of terrorism effectively which increases their operation costs. It also requires organisations to implement robust crisis management strategies in order to respond to challenges experienced by such incidents efficiently and maintain clear communication with staff, guests and the public to maintain their trust and perceptions (Lai and Wong, 2020). The impact of terrorism on the hospitality industry usually changes based on specific circumstances of different incidences and the overall security situation of a country along with the adaptability of an industry. Though these attacks impose major challenges, business organisations operating in the hospitality industry implement security measures strategically to ensure the security of their guests.
The overall influence of terrorism in the international tourism industry is multifaceted which can have major consequences for businesses, destinations and the overall tourism and hospitality industry. For instance, a significant decline in tourist arrival can result in substantial revenue losses for the industry. Moreover, a decline led by terrorist attacks can result in job losses and reduced income for businesses operating in a destination which can hurt its economy (Salameh and Hourani, 2022). As the hospitality industry depends largely on tourism, the impacts of terrorist attacks can lead to these businesses facing challenges in managing and recovering from crises caused by terrorist attacks.
4. Critical evaluation of various factors of terrorism affecting business
There are various factors associated with terrorism which have major impacts on hotel businesses. Proper identification and addressing of the sectors play a critical role in ensuring the safety and security of staff and guests while also maintaining business continuity and improving the Hotel’s reputation. For instance, terrorism incidents boost security concerns among travellers and gas which leads to a significant decline in hotel bookings and occupancy rates. This requires the hotel industry to take significant measures like instalment of surveillance cameras and other security devices in their Hotel premises. These incidents also result in negative perceptions and impacts on safety concerns of a particular destination which affects the overall flow of tourists in that destination for a long period (Falk and Yang, 2021). Terrorism attacks result in changing travel advisories imposed by the government to respond to the attack which usually leads to massive cancellations of international bookings resulting in a significant drop in international arrivals. Negative influence on the overall reputation of a hotel and its location is also a common factor of terrorism which affects Hotel businesses. Moreover, declining tourist activity due to terrorist attacks can majorly influence overall revenue generated from the hospitality industry which results in significant revenue loss in the overall economic paradigm which increases economic challenges for both hotel organisations and destinations.
Global events concerning terrorist attacks can also have a major influence on the perception of customers regarding the safety and security of a destination which eventually leads to low International travelling. For instance, if an attack occurs in a particular European country, it will have a significant impact on the overall tourism and hospitality industry of the European Union due to customers being hesitant and concerned regarding their safety and security. Tourists and travellers usually tend to avoid any particular region and other locations associated with them which experience terrorist attacks for a long period. This eventually leads to the development of a long and substantial impact on the overall well-being of the hotel and tourism industry (Corbet et al. 2019). Additionally, terrorism incidents have increased the need for security compliance and modified legal requirements which need to be followed by hotel organisations which have increased challenges in their business operations.
A notable example of a terrorist attack that occurred in Europe is the coordinated attack which occurred across Paris including Bataclan Concert Hall and various restaurants which has resulted in a large number of casualties. This attack had severe impacts on the hospitality industry. For instance, following the attack in 2015, Paris experienced a major decline in its tourist arrivals immediately. This has resulted in the majority of tourists cancelling or postponing their trips because of security concerns in the country (FRANCE 24, 2020). Due to this hotels in Paris including Le Meurice experienced a major drop in their Occupancy rates resulting in their declined revenue. The economic consequences of these attacks were severe which has directly affected revenue and growth of Hotel organisations and other businesses in the tourism sector. Issues like job losses, negative economic effects and decreased income of local businesses were observed which has affected the overall economic health of Paris.
The aftereffects of these attacks required the organisation to invest huge amounts to implement improved security measures which can reassure its guests and comply with new safety regulations. Due to this height and security measures, the operational cost of the Hotel was increased which has adversely affected profit margins for Le Meurice. The hotel has also experienced disruptions in its composition of gas demographics due to major shifts in the types of visitors. This required the hotel to implement long-term sustainable strategies to rebuild its image along with emphasising its security measures to attract customers.
5. Conclusion and Recommendations
Conclusion
In conclusion, it can be stated that the influence of terrorism on the hotel industry is vast and multifaceted. It increases immediate concerns like security challenges and operations to long-term issues like damage to reputation and economic downturn along with business discontinuity. This requires businesses to navigate complex landscapes which can ensure business continuity and resilience. Integration of proper strategies requires businesses to combine visible security measures, clear and effective communication with staff and gas a robust crisis management strategy along with effective collaboration with local authorities and government to adapt rapidly to changing International events and challenges like terrorist attacks. It can also be interpreted from the study that ensuring staff will be in adopting sustainable hospitality practices along with a diversified marketing approach also contributes to the effective development of the hotel business after major issues experienced due to terrorism attacks and other Global uncertainties.
Recommendations
Dealing with challenges experienced by terrorism attacks in the hotel business involves both long-term and short-term strategies which requires the organisation to integrate a comprehensive strategic approach into its business. Some valid recommendations for the company to address issues experienced by terrorist attacks are as discussed below:
- Le Meurice can invest in improving its security measures which reassures the safety and security of its guests and employees. The company can collaborate with local law enforcement and integrate state-of-the-art security technology along with conducting regular security checks to reduce the risk of terror attacks (Markoulis and Neofytou, 2019).
- The company can also establish a robust crisis management and communication plan and update them regularly. It is also important for the company to provide effective training to its staff regarding its emergency procedures to deal with crises effectively.
- Le Meurice can manage its reputation proactively after a terrorist incident by engaging in public relations procedures which can highlight its commitment to the safety and security of its people and put significant focus on positive aspects of its offerings.
- Developing strong collaboration with local authorities and security agencies can encourage the company to participate in joint initiatives which can improve its overall security concern and help the company stay informed regarding potential terrorism threats (Bayter Martínez, 2021).
- Embracing advanced technology which provides better security options can also help the company to implement effective measures to ensure the safety of its guests and people. This includes contactless take check-in, mobile room keys as well as advanced surveillance systems.
References
Bayter Martínez, M.P., 2021. The Impact of Terrorism on Firm-Level Performance and Employment: An Empirical Assessment for France.
Corbet, S., O’Connell, J.F., Efthymiou, M., Guiomard, C. and Lucey, B., 2019. The impact of terrorism on European tourism. Annals of Tourism Research, 75, pp.1-17.
Falk, M.T. and Yang, Y., 2021. Hotels benefit from stricter regulations on short-term rentals in European cities. Tourism Economics, 27(7), pp.1526-1539.
FRANCE 24, 2020. Why has Nice become a target for terrorism in France? [online] Available at: https://www.france24.com/en/france/20201029-why-has-nice-become-a-target-for-terrorism-in-france [Accessed 16 December 2023]
Khan, N., Hassan, A.U., Fahad, S. and Naushad, M., 2020. Factors affecting tourism industry and its impacts on global economy of the world. Available at SSRN 3559353.
Kubickova, M., Kirimhan, D. and Li, H., 2019. The impact of crises on hotel rooms’ demand in developing economies: The case of terrorist attacks of 9/11 and the global financial crisis of 2008. Journal of Hospitality and Tourism Management, 38, pp.27-38.
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Le Meurice, 2023. Le Meurice – Dorchester Collection. [online] Available at: https://www.guestreservations.com/le-meurice/booking?msclkid=ba0c70bb92da184132be15c6ce8314d2 [Accessed 16 December 2023]
Markoulis, S. and Neofytou, N., 2019. The impact of terror attacks on global sectoral capital markets: An empirical study. The Economics of Peace and Security Journal, 14(1).
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Raja, P. and Raghu, A., 2020. A critical review of terrorism effects and their impacts on tourist destination countries. Materials Science, 2214, p.7853.
Salameh, M.T.B. and Hourani, I., 2022. The Impact of Terrorism on Tourism: Pilot Study 2007–2017:(Case Study of Jordan, Egypt, Spain and France). Dirasat: Human and Social Sciences, 49(1), pp.639-658.
Sathiamoorthy, V., De Zilva, M.M.S., Bandara, E.C.P.K., Leelarathne, E.K.C.J.S., Weligodapola, H.W.M.C. and Lokeshwara, A.A., 2020. Terrorism and its Implications on Small Hotels in Sri Lanka. International Journal of Academic Research in Business and Social Sciences, 10(5), pp.471-478.
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