OVERVIEW OF MANAGEMENT PRACTICES-

MGT3010-E GROUP 4

• Roy Tanga
• Parth Gupta
• Raphael Gaitho
• Harriet Kangethe
• Edwin Munyiri
• William Maina
• Zion Mugisha
• Hannington Odiembo
 Question: Discuss 5 factors that are likely to have
highest impact on a business in the Hospitality sector.
Definition:
Hospitality industry entails all the efforts by businesses that are aimed at fostering
comfort, enjoyment, luxury and sense of well-being amongst individuals while they are
far away from home or their usual surroundings.
Settings of hospitality:
Hotels, restaurants, resorts, travel services and agencies, accommodation facilities etc.
Components of hospitality:
Accommodation, event management, tourism and travel services, cultural sensitivity,
cleanliness and maintenance, culinary services etc.
 The business environment
Definition:
Business environment refers to all the factors that influence the operations of a business
with more focus on those factors beyond the business’ control.
Business environment is divided into two namely: Internal and external environment.
Internal environment include factors like: management, resources, culture
External environment include factors like: economic environment, social & cultural
environment, technological environment, political & legal environment, environmental
and ecological environment etc.
 Business environmental factors that highly
impact businesses in hospitality
1. Economic factors:
This includes factors like interest rates, exchange rates, economic growth rate, interest rates etc.
Positive impact: During national booms when the economy is generally doing well, consumers
tend to have a high disposable income. As such, they can spend more on leisure activities far
away from their homes like in tourism and hotel. This would mean more business that generate
income in the hospitality sector.
Negative impact: Fluctuations in the exchange rates and performance of certain currency subject
to the dollar may affect the cost of running a business in the international hospitality space. For
example, KES vs DOLLAR; when the cost of buying a dollar goes high, costsof running any
business generally tend be so high thus a small realization of profits.
 2. Technological factors
This include factors like: innovations, adoption of AI and automation etc
Positive impact: Innovation of new tools and applications that can automate the process of booking
hotels and making payments bring about efficiency improvements which in turn means more
productivity within a short time thus more income.
Online platforms give instant feedback from customers which can help improve the businesses in
hospitality.
Recommendation systems put the businesses in the global realm by automated suggestions to clients.
Negative impact: Exposure of the businesses operations stored online to hacking, management of
data privacy may seem to add additional costs to business, setting up of websites for the business and
training of staff on how to handle some of the reservation machines may also imply additional costs.
 3. Social and cultural factors

This includes components like: societal values, demographic trends, lifestyle and attitudes.
Positive impact: Demographic shifts like majority of the population being aged and nearing retirement
may prompt more establishment of nursing homes for the aged and luxury facilities to pass the
retirement period.
Positive beliefs and attitudes towards certain practices like sports by a community would establishment
of more sports complex in the area thus more business in hospitality industry.
Negative impact: Some cultures do not encourage some practices which in turn influence dietary
patterns of some people. For example, establishing a pork point in an Islamic society would face
opposition as pig and its products are prohibited in a region.
A population which comprises of mainly females would prefer certain leisure events like opening
restaurants with open cooking competition; having a sports complex in such an area would not be viable.
 4. Political and legal factors
Under this section, the factors being considered are: government policies, political stability, legal frame works etc.
Positive impact: Change in the government policies like the relaxations on visa acquisition and rules related to
immigration may make a country attractive in the sense that entry is not so hard. In effect, more and more tourists can
visit thus more investment in the tourism sector hence a boom in hospitality.
Political stability can make a nation attractive as well thus a key destination for tourists and foreign investment. With
more foreign money flowing into the country, it would mean the hospitality sector would grow.
Negative impact: Political unrest and wars put a region’s safety at risk thus foreigners are scared to visit leading to
deteroriation of the traveling and tourism industry leading to closure of many businesses and staff downsizing.
Employment regulations like minimum wage, working hours restrictions may lead to conflict between employers and
employees when they fail to agree on some terms. In as much as these regulations tend to protect the employees, they
may hinder smooth relationships in the hospitality sector.
5. Environmental and ecological factors.
Under this section, components like sustainability, environmental regulations, climate,
water availability, land use planning are considered.
Positive impact: Increases awareness on matters sustainability on environmental issues has
led to demand for sustainable practices in hospitality sector e.g. eco-friendly
accommodation.
Extreme weather conditions like too much heat or cold may influence certain business set
ups in the hospitality sector. For example, the presence of sandy beaches and warm
weather along the Indian ocean coast of Mombasa has attracted may visitors both local and
international to that area. As a consequence, more hotels and accommodation facilities
have been established in the area thus a growth in the hospitality business.