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PESTEL Analysis

The current macro-environmental factors affecting Marriott UK are included the following:

Political factors

This year, the UK Government announced its plans to join the World Tourism Organization (WTO) by 2005/06. The Government's policy is to encourage tourism to be world-class in every respect. This will be facilitated by modernizing infrastructure such as hotels, restaurants and transport links. (Is this the only factor?)

Economic factors

Hotel growth linked to the state of the economy - Although total revenues increased by 3% in 2003, the continued low room rates kept profitability levels down for many hotels. However, the strengthening demand has already led to an increase in room rates which will lead to rising profits once again.(where the figures come from?)

Fluctuating tourism numbers set to rise - The hotel industry plays an integral role within these markets providing accommodation for 45% of the inbound market and 26% of the domestic market, and is thus susceptible to these market fluctuations.

Consumer preferences - With low interest rates encouraging a high rate of spend rather than savings, high levels of disposable income have encouraged similar levels of growth within consumer expenditure. For instance, in terms of those facilities guests would be willing to pay a premium for a swimming pool, or for a fitness centre.

VAT - Tourism is internationally competitive and the UK is at a disadvantage on VAT. If VAT on accommodation in UK was reduced from current 17.5% to the Europe average rate 8%, the resultant tax take overall would not reduce, allowing for increased business that would result from such a 10% “discount”.

Socio-cultural factors

Demographics - Both female and male (which males/females?) are in full-time employment meaning people can have greater disposable income available