The effects of globalization on the hospitality industry

The effects of globalization on the hospitality industry

The term globalization refers to a trend towards a more integrated global economic system. It is a continuous process in business that crosses into the economic, political, legal, technological, and cultural spheres.

Focusing on the hospitality industry in particular, the impacts of globalization have had far reaching consequences, which have been both positive and negative.

Exposure to different cultures

The globalization of trade and the economy has had a direct impact on the price of travel. A larger pool of competition has led to more competitive pricing, and given rise to the low-cost carrier model within aviation.

The low-cost carrier model provides a no frills service for a reduced cost, meaning that more people can now fly around the world for a reasonable price. This has made it easier for travellers to experience new cultures, and has made it increasingly important for professionals in hospitality to understand, and cater to, different people.

Advancement of technology

If they want to attract the most tourists, hospitality organizations must work hard to keep up with advancing technology. It is important for hotels, tourist attractions, and restaurants to continually improve their products and services – with the most progressive gaining an edge over the competition.

Even something like a hotel room key has been revolutionized through technological advancement, with its next stage of evolution looking to transform it into data utilized on a guests’ cell phone.

Developing countries lose out

Globalization has created easier and more affordable ways to travel. This means that tourists can now choose from a wide range of destinations, leaving behind developing countries that may not have the infrastructure or technology needed to welcome a large amount of visitors.

To increase the levels of tourism it attracts, a country must have the money necessary to compete with more luxurious and tourist-friendly destinations.

Seasonal employment

For varying reasons, some countries, cities, and towns experience extreme highs and lows of tourist activity. This could be because of weather, price, or events specific to a certain time of year.

During these peak seasons, there are a lot of jobs available for locals in the hospitality industry, but as soon as it is over the jobs disappear. This leaves people with no income for a large part of the year, and creates unemployment and poverty issues for places that rely heavily on tourism.

Interested in learning more about the hospitality industry? Take a look at the hospitality courses on offer at TSoM.

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