The Impact of Hospitality in Today’s Economy

by TTU-CR / May 11, 2018 11:54:00 AM

Statistics in the hospitality industry reveal that the hotel occupancy in America has been on an upward trend between years 2009 and 2017. Further, revenue grew annually to a peak $189.5 billion in 2015, all clear indicators of a growing industry. Moreover, the hospitality industry will sustain a 5-7% growth in 2018, according to projections by the Wall Street Journal.

In this case, students of Texas Tech Costa Rica learn how much the hospitality sector contributes to the national GDP or rather, the economy of a country.

The impact of hospitality in today´s economy can be divided into four categories: Fiscal, direct, indirect and induced impact.

Fiscal Impact

Here, the impact arises from the federal, state and local taxes collected from the development and operations of restaurants.

These types of taxes encompass everything from sales taxes from the generated revenues, payroll taxes from full-time hotel employees, hotel management included, to property taxes.

Direct Impact

It involves the projected hotel revenues when consumers use the resources provided in a hotel including food, spa, and rooms.

Direct impact also includes the salaries paid to the hotel employees. The accommodations and food services subsectors of the hospitality industries support close to 3.4 million US jobs.

Indirect Impact

Contractors and suppliers of goods and services such as food & beverages, room amenities, housekeeping supplies and telecommunication vendors to restaurants also stand to benefit indirectly.

Induced Impact

When hotel employees, contractors, and suppliers spend their earnings on other consumer goods in the market, there's a significant impact on the economy.

Technology in Hospitality

Smartphone use is at all times high. Individuals can access everything from the palm of their hands from foods points to vacation points. Through smartphone apps, people can receive notifications in real-time regarding nightlife spots and can make reservations wherever they are.

Social media has helped hotels create an online presence and become brands. Hotels can share what they have on offer, connect their customers on a human level and even collect feedback.

What’s more, technology in the hospitality industry has enhanced targeting. Through text messages and notifications, hotels can inform the guests regarding various activities such as meeting rooms and the changes made in real-time.

The Future of the Hospitality Industry

With the advancement in technology, we’ll experience remarkable developments in the industry. The travel industry and the hospitalityindustries go hand in hand and have a promising future.

Artificial Intelligence (AI)

Travel and hospitality websites are learning to return more personalized results for travelers and those seeking accommodation spots, with more interactive content.

Internet of Things (IoT)

Sensors, devices, and machines (smart tech) will be connected to the airlines and the hotel rooms to boost the consumers’ experience.

Automation

It’s estimated that by 2020, there’ll be more than 10 million driverless cars. It’s highly likely the hospitality will adopt the idea to help in the transportation of tourists seeking hotel accommodation.

Besides, blockchain and voice technology will also disrupt the tourism, travel and hospitality industry a great deal.

In Conclusion

Without a doubt, the hospitality industry has significant impacts, directly or indirectly, on the economy of any country. From the taxes paid to the federal, local and state governments to the millions of jobs created, the industry contributes a bunch. Further, thanks to the advancement in technology, the hospitality sector’s growth will be unstoppable.

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Topics: RHIM