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Appraise the impact of different economic systems on hotel and restaurant globalization

No 1 2012 pp. After a significant contraction in 2009, tourism rebounded strongly in 2010 and in 2011 the international tourist arrivals and receipts are projected to increase substantially.

The hospitality industry is expected to show a sustained recovery in 2012. The crisis has particularly strong impact and negative consequences in Greece. The country is undergoing a serious political crisis, as well, and it seems that the forthcoming elections are the only solution for the restoration of stability and social peace. However, it appears that three elements must be present: Every crisis is unique displaying a remarkable range and variety Henderson, 2006yet characteristics generally cited include unexpectedness, urgency and danger Hermann, 1972.

Tourism crises usually share these attributes although certain crisis situations can be predicted and lack immediacy. Causes of many tourism crises can be traced to developments in the economic, political, sociocultural and environmental domains which affect demand and supply in Central European Review of Economics and Finance, Vol.

Economic downturn and recession, fluctuating exchange rates, loss of market confidence and withdrawal of investment funds can all create a tourism crisis.

Crises generated within the industry can also be analysed under the headings of economic, sociocultural and environmental when tourism has negative impacts in these fields Henderson, 2006. The external and internal threats of the economic crisis to the tourism industry are: Crises occur at all levels of tourism operations with varying degrees of severity, from much publicised environmental, economic and political disasters through to internally generated crisis such as accidents and sudden illness Beeton, 2001.

Economic downturn can undermine demand and possibly result in crisis for industries in origin and destination countries if the slump is sufficiently intense or prolonged. The recession of the 1990s on the U. In 1997 the world financial crisis that began in Asia and spread to Russia and Brazil in 1998 Schifferes, 2007as well as the falling currency values depressed demand for travel and investment in tourism Henderson, 2006.

Although the direct effects of the economic crisis decreased in about four months, occupancy rates continued to fall and remained low throughout 2009 and early 2010 Enz et al. The industry is feeling the impact of a shrinking capital market and decreased spending by both corporate and individual consumers Global Financial Crisis Bulletin, http: Businesses have reported a downturn in sales of lodging, foodservice, events and other hospitality products and some have closed their doors forever.

The decline resulted not only from fewer customers in hotels, restaurants, conference and convention appraise the impact of different economic systems on hotel and restaurant globalization, etc.

The recession caused serious problems for luxury hotels in particular. However, many hotels in certain global markets, especially those catering to leisure travellers, were less affected. And the popularity and growth of the luxury hotel segment in recent years suggests that a strong rebound may not be unrealistic Barsky, 2009. There were sharp differences in the performance of the various global regions in 2009 http: Destinations in Central, Eastern and Northern Europe were particularly badly hit, while results in Western, Southern and Mediterranean Europe were relatively better.

In fact, a hotel room was cheaper in 2009 than it was in 2004. However, towards the end of 2009, the price falls started to stabilize.

Hospitality Adjusts To Globalization

In the DLA PIPER EU hospitality outlook survey March 2011 the majority of respondents expect the hospitality industry to show a sustained recovery in 2012 and a return to pre-financial crisis levels in terms of room rates, largely due to a predicted growth in business travel.

The EU hospitality and leisure sector is increasingly using social media as a promotional tool to enhance sales, marketing and public relations, although it is still behind the U. The industry is looking for ways to develop new market segments and attract new customers. Thus, the sector is an important driver of growth and prosperity, and, particularly within developing countries, it can play a key role in poverty reduction, as well.

During the downturn, travellers became less engaged with the traditional sun-and- beach destination brands and looked instead for the best value in a two-hour flight range. This has fuelled growth along the cheaper Mediterranean countries e. Tunisia and Egypt and left euro zone countries such as Spain, Greece, and Portugal coping with declining tourism traffic World Economic Forum, 2011. However, the political turmoil in the Middle East and North Africa at the end of 2010 and in the first months of 2011 has limited the tourism business sharply.

Of course some of these tourist arrivals and tourism spending will show up as an increase in tourism in other countries — although for the moment data do not indicate which developing countries might be the most significant beneficiaries World Bank, June 2011. The Greek economy is in critical condition. The Greek financial situation has helped push down the value of the euro against the dollar, making a visit to Greece, or anywhere in the European Union EUrelatively less expensive for Americans and other foreign visitors.

With the apposition of elements that is to follow, effort is made in order for the current situation of tourism in Greece to be determined. Nevertheless, during the next two years 2009 and 2010 the impact of economic crisis on the Greek tourism figures is evident and resulted in the following negative rates: Drop in contribution to GDP 2007-2010: Adapted from Hellenic Statistical Authority, 2011 Table 2.

Adapted from Hellenic Statistical Authority, 2011 Explanatory notes: So far November 2011the tourism industry strengthened both in number of foreign arrivals and in terms of RevPAR http: Taking into account the serious recession Greece is facing nowadays, these developments are quite encouraging. Tourism and politics have a close relationship in which domestic and international political conditions and developments shape tourism flows and environment in which the industry operates.

Tourism also impacts on political structures and processes and it is a policy making area of importance to most governments which seek to fully exploit the economic opportunities, as well as the social and political uses it affords.

However, government actions, ideologies and political events are capable of triggering a range of crises and political instability in a common catalyst Sian, 2009. It is well known that apart from the economic crisis, Greece is also undergoing a serious political crisis. The combination of the economic and political crisis creates an explosive mixture and the legitimacy of the political system is seriously questioned, as a significant part of the population identifies a democratic deficit in the management of the crisis and is confronted with a worrying image for the future Lyrintzis, 2011.

The Greek political system is considered very fragile at the moment and it seems that the only way out of the crisis appraise the impact of different economic systems on hotel and restaurant globalization the forthcoming elections which are expected to bring back stability, optimism, prosperity and social peace to the country.

The effects of globalization on the hospitality industry

History has shown that Greece will manage to survive and the country will be able to make its way out of the deep economic and political crisis. The research was conducted between August and October 2010 on a sample of approximately 600 hotel guests.

Study into the Impact of Economic Downturn on the 5 Star Hotels of Thessaloniki The study intended to identify the impact of the financial crisis on the 5 star hotels of Thessaloniki, Greece and how the annual occupancy rate, arrivals and overnight stays, as well as daily room rate, profitability and operating costs were affected. The questionnaires were answered by the hotel executives in autumn 2011. The basic characteristics of the surveyed hotels twelve in total are: All the properties are 5 star hotels.

One of the hotels belongs to an international chain and the remaining eleven either belong to Greek hotel chains or they are individual properties. All of them are managed directly by the ownership and not by third-party professional companies. The hotels are located in both urban and suburban locations of Thessaloniki and are of various sizes and rates.

All the hotels offer food and beverage services. Questions and Findings of the Survey Questions Findings 1. What types of guests visit your hotel? What was the average annual occupancy of your hotel during 2005-2008? What was the average annual occupancy of your hotel in the years 2009 and 2010? What was the average per guest number 1,62 nights of overnight stays during 2005-2008? In 2009-2010, the number of overnight In six hotels the number is stable, in four stays increased, declined or is it stable there is an increase and in two there is a related to 2005-2008?

In 2009-2010, your profitability In six hotels there is a decline, in four the increased, declined or is it the same related level is the same and in two there is an to 2005-2008? What are the main reasons for your The quality of services and the competent increased profitability? What are the main reasons for your The financial crisis and the increase of the decreased profitability?

  • MEED is well established as the source of strategic and accurate regional information placing it in a unique position to bring together high-caliber speakers;
  • What was the average annual occupancy of your hotel during 2005-2008?
  • All the properties are 5 star hotels;
  • Retrieved October 28, 2011 The World Bank 2011;
  • Tourism brings in revenues and means more jobs;
  • In 2009-2010, your profitability In six hotels there is a decline, in four the increased, declined or is it the same related level is the same and in two there is an to 2005-2008?

Are your total operating costs in 2009- In seven hotels the costs have increased, in 2010 increased, declined or are the same four they have declined and in one they related to 2005-2008? What was the average room rate, 110 euros and 101 euros, respectively respectively, in 2005-2008 and 2009-2010? During 2009-2010 did you make any Eight hotels did not make any investment, kind of investment in the hotel?

If yes, what kind of investment? Do you think that your investment was From those hotels that made investments, profitable? If not, cite the reason s. The other hotels attribute the failure to: Results of the Survey By analysing and comparing the above findings with the research findings of GBR Consulting, we conclude that: Nevertheless, two hotels managed to be profitable thanks to the quality of the services being offered and their competent staff members.

The increase is mainly due to the rising prices of oil, electricity and labour costs. The main lesson that emerged from our survey is that the Greek hoteliers can survive a recession, by offering qualitative services, by preparing careful plans focused on guest and employee satisfaction, and by implementing a consistent pricing policy as well as an effective revenue management.

Conclusions We live in an era characterized by a very serious economic crisis that began in the U.

  • Seasonal employment For varying reasons, some countries, cities, and towns experience extreme highs and lows of tourist activity;
  • Nevertheless, the luxury hotels are less susceptible to the financial crisis due to the fact that the number of guests able to afford luxury accommodations has risen dramatically over the past few years.

As a result of the global economic crisis, the hospitality and tourism industry experienced a serious downturn in sales and profitability, especially during 2009. In 2010, tourism rebounded strongly and in 2011 the international tourist arrivals and receipts are projected to increase substantially.

Hotels in most parts of the world have experienced drops in occupancy, average daily rate and revenue per available room. The drop in demand has shifted considerable pricing power to the customer. Nevertheless, the luxury hotels are less susceptible to the financial crisis due to the fact that the number of guests able to afford luxury accommodations has risen dramatically over the past few years.

The hospitality industry is expected to show a sustained recovery in 2012 and a return to pre-financial crisis levels in terms of room rates. The crisis has particularly strong impact and negative consequences in certain countries.

Moreover, apart from the economic crisis, Greece is undergoing a serious political crisis. Tourism brings in revenues and means more jobs. Luxury Hotels and Recession: A View from around the World. Retrieved November 2, 2011, from http: Horseback Tourism in Victoria: Cooperative, Proactive Crisis Management.

Current Issues in Tourism, Vol. EU hospitality outlook survey 2011. Hotels, Cornell Hospitality Report, Vol.