Environmental Scanning of Hong Kong hospitality industry
Environmental Scanning
Political
This factor is normally affected by the strategy or agreement of government. In Hong Kong, not only the local government will affect the hospitality, also the China government. We analyze that there are two political issue which increasing the Hong Kong inbound tourism and business between foreigner to China. They are Closer Economic Partnership Arrangement (CPEA) and World Trade Agreement (WTO). China government opened the market to the world and accepted the transaction from foreign countries that the opportunity of business is increased. Therefore, there are more mainland business traveler came to Hong Kong for business. It benefits to our company as the market are growing to a larger scale. We can gain revenue in accommodating the development of market.
However, these issues also attract a lot of foreigner and mainland investors enter to the Hong Kong hospitality market. There are some potential competitors growing up that may be a threat of our company. Consequently, we need to analyze the market more frequently and be aware of new competitors. Otherwise, it may have a negative effect to our business.
Economic
Regarding the economic environment, we are most concerning the exchange rate of currency and inflation rate of Hong Kong. These factors have the vast impact to our business operation and decision making.
First, the exchange rate between Hong Kong dollars and RMB is increasing. With the development of China business, we had more opportunity to earn RMB in hotel. For the recent years, the hospitality industry accommodating the mainland market, so that a large amount of RMB inflow to Hong Kong. According to the exchange rate from Hong Kong dollar to RMB, 1 RMB equal to 1.2723 Hong Kong Dollars. The exchange rate is still increasing as the result of the development of China market. We can gain more revenue by the difference of exchange rate.
Nevertheless, under the linked exchange rate system, the exchange rate
Political
This factor is normally affected by the strategy or agreement of government. In Hong Kong, not only the local government will affect the hospitality, also the China government. We analyze that there are two political issue which increasing the Hong Kong inbound tourism and business between foreigner to China. They are Closer Economic Partnership Arrangement (CPEA) and World Trade Agreement (WTO). China government opened the market to the world and accepted the transaction from foreign countries that the opportunity of business is increased. Therefore, there are more mainland business traveler came to Hong Kong for business. It benefits to our company as the market are growing to a larger scale. We can gain revenue in accommodating the development of market.
However, these issues also attract a lot of foreigner and mainland investors enter to the Hong Kong hospitality market. There are some potential competitors growing up that may be a threat of our company. Consequently, we need to analyze the market more frequently and be aware of new competitors. Otherwise, it may have a negative effect to our business.
Economic
Regarding the economic environment, we are most concerning the exchange rate of currency and inflation rate of Hong Kong. These factors have the vast impact to our business operation and decision making.
First, the exchange rate between Hong Kong dollars and RMB is increasing. With the development of China business, we had more opportunity to earn RMB in hotel. For the recent years, the hospitality industry accommodating the mainland market, so that a large amount of RMB inflow to Hong Kong. According to the exchange rate from Hong Kong dollar to RMB, 1 RMB equal to 1.2723 Hong Kong Dollars. The exchange rate is still increasing as the result of the development of China market. We can gain more revenue by the difference of exchange rate.
Nevertheless, under the linked exchange rate system, the exchange rate
References: Exchange-rate.org http://www.exchange-rates.org/ Article of Inflation rate http://www.buzzle.com/articles/how-does-inflation-affect-the-economy.html Trading-Economy http://www.tradingeconomics.com/hong-kong/inflation-cpi Sheraton guests review http://www.starwoodhotels.com/sheraton/property/reviews/index.html?propertyID=482&language=en_US&localeCode=en_US Air Pollution Index http://www.epd-asg.gov.hk/english/24pollu_fsp/24pc_fsp.html