AEC Business School 167, Jalan Bukit Merah, Connection 1, Singapore, 150167

Diploma in Hospitality Management

Module: Economic

Name: Nguyen ThiThanhHuyen( Kitty) FIN number: G0959949K Teacher: Abdul Raoof Last day : 23 September, 2010.

Table of contents:
Introduction Macro economics can affect hotel business 1. GDP 2. Macro economics can affect hotel business Labor force 4 type of unemployment Conclusion

Introduction:
The economic of Vietnam is a developing market economic. Since the mid 1980s , through the DoiMoi reform period, Vietnam has made a shift from a centrally planned economic to a Socialist-oriented market economic. Over that period, the economic has experienced rapid growth. Nowadays, Vietnam is in the period of integrating into the world s economic, as a part of globalization and is in transition from a planned economic to a market-oriented mixed economic under one-party rule. This is quite apparent through an examination of GDPs. Dur ing the period 19911995, the cumulative increase in GDP accounts for 48.3% with an average of 8.2% per year and annual increases described as follows :6% in 1991, 8.6% in 1992, 8.1% in 1993, 8.8% in 1994 and about 9.5% in 1995.

Macro economics can affect hotel business: 1/ GDP:

GDP is Gross Domestic Product . The total market value of all final goods and services produced in a country in a given year, equal the total consumer, investment and government spending, plus the value of exports, minus the value of imports. The GDP report is released at 8:30 am EST on the last day of each quarter and reflects the previous quarter. The main task for 2010 s socio-economic development plan is to try to achieve a GDP growth of 6.5-7 percent.

Late last month, the government proposed to parliament that the gross domestic product target for this year be lowered to about 5 percent, although many economists say even that will be a difficult mark to hit as the global economic recession pushed the Southeast Asian country s first quarter GDP growth t o its lowest level in years. Last year, GDP growth was 6.2 percent and in 2007 it was 8.5 percent. Last week, government also set an economic growth target of between 7 and 8 percent a year in the 2011-2015 period, lowering by half a percentage point the floor of the range as compared with its target for the previous five years. Vietnam s economy grew at an average annual rate of 7.5 percent between 1996 and 2005, according to the Ministry of Planning and Investment. The government target for gross domestic product growth in the five years from 2006 to 2010 was 7.5 percent to 8 percent.

2/ Unemployment:

In economics, unemployment refers to the condition of unwanted job losses, or willing workers without jobs not everyone who s out of work is seen as unemployment.

Labor force:
Individuals aged 16 years and older who are either working or actively looking for work. It s part of the adult population in the economy, constituting base for unemployment rate calculation. Adult who are not actively looking for a job fall

out of the group, such as discouraged workers, the retired and so forth. In other words, they are not labor force.

4 type of unemployment, namely:

y Frictional unemployment:

Just as friction always take place before the slider comes to it s final position on the surface, people need time to find the best job, thus voluntarily rubbing back and forth between choices and staying unemployment. It s the same with unemployment who rarely hire the first applicant that enters the door. Both of them, the job applicants and employers need time to explore the labor force market. Therefore, frictional unemployment is a type of voluntary unemployment that arises because of the time needed to match job seekers with up your mind and set off looking for a better frictional unemployment labor force.

y Structural unemployment:

This happens when a large amount of unemployment workers (labor force supply) don t qualify for a large amount of labor force demand. It s either because that the workers don t have the skills demaded by the employers or they live too far from the demanding area. Thus, unemployment caused by massive mismatch of skills or geographic locationis noted as structural unemployment. Major shifts of consumption taste, technological change, tax and a variety of other factors can reduce the demand for certain skills and increase that of others, thus making structural unemployment occur.

y Seasonal unemployment:

In some markets, the demand for goods and services may expectedly fluctuate fiercely wit seasons ina year, incurring waves of demand for related labor force. As the season of Christmas comes, demand for postal services rise sharply so is postal workers because the workload is much bigger than that of any seasons in the year. After that, demand for postal workers, bringing about unemployment. So, unemployment caused by seasonal changes in labor supply and demand during the year is called seasonal unemployment.

y Cyclical unemployment:

Because of business cycles, many firms reduce the demand for inputs, including labor in recessional periods when production declines. Cyclical unemployment is used to refer to the fluctuation in unemployment that is incurred by business cycles, more specifically, the unemployment caused by economic recessions.

Conclusion:
Hotel industry is a major development and has always avoided. Hotel development not only depends on the organization of the hotels but also largely affected by external factors like the economic situation, unemployment and people s hospitality industry Depends on the economy and tourism of the country, if economic development, investments in limited categories of entertainment, many tourists, from which hotel was developed.

The unemployment rate is also affected, because when people have no jobs, suggesting the economy is not developed, the workforce shortage exists. Other hand, when economic underdevelopment, people did not wish to spend, making the hotel s revenue is being pulled down. Therefore, a successful hotel, not the right investment and help inside that the need to regularly monitor and update the changes outside, which is exactly the comment about current situation. As plans to suit each time to help track and hotel development advantages.