The influence of the current microenvironment on event venues and hospitality organizations could be evaluated only through a clear impression of the components involved in the microenvironment. The microenvironment of an organization refers to the elements that are identified in the immediate area of operations of the company which are responsible for imposing profound influence on its performance as well as approaches for decision making.
As per Evans (2015), it is imperative to observe that the microenvironment does not exert a similar influence on all organizations in the industry owing to the differences in capacity, strategic orientation, size and capabilities (Evans, 2015). The microenvironment of an organization includes the competitors, customers, suppliers, workers and unions, public and marketing intermediaries. The following discussion would emphasize the impact of customers and stakeholders (sponsors) on event venues and hospitality organizations.
The prevailing trend in the world markets reflects on the transition from agriculture and production to customer service and businesses involved in this business are investing their optimum efforts in the improvement of service quality in order to appeal to customers. The importance of consumer service could be explicitly observed in hospitality organizations and event management.
As per Michelini, Iasevoli & Theodoraki (2017), event venues have become a constituent of a massively competitive environment where organizations have to ensure consistent reinvention and redevelopment of product and service offerings in order to maintain their relevance in the present business environment. (Michelini, Iasevoli & Theodoraki, 2017, p 332) For example, the redevelopment of service offerings in the case of hospitality organizations are being tailored to the concept of ‘more’ implying more luxury, more technology, more innovation and more service alternatives.
The most significant aspect of the customer component in the microenvironment of event venues and hospitality organizations which imposes considerable impact on the organizations is service quality. The understanding of service quality differs widely from individual to individual with respect to the situation as well as the perception of service quality in comparison to the expectations of service. A productive review of literature pertaining to business management would provide a legible impression of customer satisfaction and customer expectation as well as the disconfirmation theory thereby helping in anticipation of the way in which customers influence the decision making, operations and performance of event venues and hospitality organizations (Mahoney et al., 2015).
Customer satisfaction could be considered as an attitude or outcome derived from a comparison between the expectations of the customer prior to the purchase regarding the product and the subjective perception of the product’s offerings to the customer. Customer satisfaction could be termed as the feelings of disappointment or pleasure depicted by a person that arises from the comparison between the perceived performance of a product and the expectations of the user. Some authors have classified customer satisfaction as a collective outcome derived from perception, psychological reaction and evaluation of the consumption experience associated with a product or service offering (Mullins, 2001).
For example, if a user harbours a preconceived notion that the mobile phone of a specific manufacturer would cater to their needs and does not find that the purchased device is suitable for their needs then there would be a clear disparity between user expectations and the actual performance of the product thereby implying lack of customer satisfaction. Customers are able to form expectations regarding a product or service of an organization due to various factors which include previous interaction with various organizations, the psychological condition of customers at the time of service delivery, values and imagery of the concerned product, customer background and advertising (Rao & Sahu, 2013).
The characteristic trends among customers identified for event venues and hospitality organizations are catering to Millenials, increasing emphasis on health and wellbeing as well as increasing demands of international leisure travel. Therefore customers in the microenvironment could be assumed as prominent reasons for changes in approaches of service delivery. For example, the increasing number of bed and breakfast establishments in hospitality, as well as the introduction of professional lounges in large hotel groups such as Hilton for working professionals, is indicative of the changes in product and service offerings in accordance to customers (Shafiq et al., 2013).
The stakeholders associated with event venues and hospitality organizations include prominent references to the sponsors, suppliers, public, local government and authorities apart from customers. Sponsors are considered as major stakeholders in event venues and recently in the hospitality organizations for promoting different novel product and service offerings, especially for business travel customers (Michelini, Iasevoli & Theodoraki, 2017, p 332). Sponsorship is generally realized in the form of provision of resources that may include people, money or equipment by an organization for an event in order to establish a direct association with the event.
The preferences of Millenials that form a large share of the customer base in hospitality and recreation events are largely directed towards event venues and hospitality organizations that obtain sponsorships from other renowned brands. This improves the sponsorship outcomes for event venues and hospitality organizations such as sponsor awareness, purchase intentions, brand image as well as brand attitude. Event venues are classified on the grounds of different criteria such as marketplace, strategic, activity-based, service-based and physical features (Michelini, Iasevoli & Theodoraki, 2017, p 332). The three prominent aspects which have been identified as notable influences on the feasibility of an event venue due to the involvement of sponsors are the event experience, dimensions of event quality and the relationship between quality of event, loyalty and event satisfaction.
The macro-environment of an organization comprises factors that are not under the control of the organization and could be accounted as forces responsible for shaping the opportunities and threats posed for an organization. The dominance of customer service as the focus in the case of the event venues and hospitality organizations could be accounted as the most prominent factor responsible for increasing the vulnerability of the hospitality sector to macro-environment factors.
The factors in the macro-environment such as changing weather conditions, changes in governments and introduction of social and technological trends have the potential for impinging large scale influence on the performance of event venues and hospitality organizations (Wood, 2013). The consistently increasing prospects for employability in the hospitality industry as well as various changes due to emergent factors such as rising consumer demand, technological innovation, political instability and terrorism have been responsible for inducing considerable reforms in the operations of organizations in the domain of event management and hospitality. Application of PESTEL analysis for the industry would provide a clear impression of the impact of the macro-environment on event venues and hospitality organizations (Shafiq et al., 2013).
The political factors in the macro environment have a substantial and inherent impact on organizations in the hospitality industry. Event venues and changes in worldwide government regimes have a direct influence on the industry. For example, recent terrorist attacks in an auditorium hosting a rock concert in France can be considered as the influence of political turbulence. Furthermore, the example of Egypt can be taken which reflects on the instability in the nation’s tourism industry since 2011 that has been complicated further due to the Metrojet crash over the Sinai Peninsula (Wood, 2013). The performance of Europe and the Asia Pacific in the domain of hospitality could be largely attributed to the political stability identified there. Political factors are also reflective of the perception of military and security apparatus identified in the country that imposes considerably influence on the promotion of events or the hospitality industry.
Economic factors have also played a formidable part in the improvement of the event management and hospitality industry all over the world. The explicit factors which could be identified in this context include prominent references to the growth in the labour market alongside rising in consumer spending as well as disposable personal income and average hourly incomes.
These economic factors are indicative of the probabilities for the sustainability of the event management and hospitality industry in 2018. The prolific situation of demand would be liable for providing opportunities to associated organizations for reaping the benefits. The example of the recession and subsequent cuts made by customers of the hospitality industry in their travel expenses could be accounted as a promising explanation for the impact of economic factors in the macro-environment (Mahoney et al., 2015).
Social trends play a considerable role in shaping the dynamics of the tourism industry. One of the prominent trends that should be taken into account here is the changes in consumer preferences from lodging towards private accommodations in recent years. For example, Airbnb has provided a novel approach for travel accommodations thereby offering competition to the established hotel brands (Michelini, Iasevoli & Theodoraki, 2017, p 332). The majority of consumers range within the 18-34 years age group thereby implying the necessity to conform to their attitudes for eco-friendly practices in service delivery alongside demands for unique perks. These factors are responsible for changing imperatives of service delivery in case of events as well as in hospitality organizations.
The technological factors have been responsible for increasing the demand for event venues and hospitality organizations in the 21st century and have influenced various sectors in the operation of organizations in the hospitality sector such as marketing, booking of accommodation and transport facilities (Evans, 2015). The integration of information and communication technology in the services provided by organizations in the hospitality sector has been responsible for improving the service experience for customers. The technological advancements have been equally productive for organizations as well as customers with the increasing role of social media and mobile technology alongside the effectiveness of kiosks and digital check-ins.
Sustainability is one of the significant keywords for contemporary organizations thereby implying the shifting of the focus of operations in the event management and hospitality sector towards eco-friendly measures (Shafiq et al., 2013). The management of the ecological impact of the organizations as well as waste management associated with event venues could be assumed as prominent indicators for demanding changes in approaches of operation in the hospitality sector.
Legal concerns are prominently identified in the regulations intended for the hospitality sector and event management. Despite the variations in legal precedents on the basis of jurisdictions, it is essential to observe the common aspects that are addressed through the regulatory environment. The aspects include public security, labour, risk management, health and safety at the workplace and environmental protection (Wood, 2013).
The event industry has been burgeoning with the influence of changing social trends that have reflected profoundly on the potential of the industry to provide adequate contributions to the global economy. It is essential to note that alongside the progress, there are various challenges that must be encountered by the event industry in order to maintain its profitability. Some of the notable challenges are derived from the microenvironment as well as the macro environment with references to increasing competition, growing demand for unique venues and event experience in the industry as well as innovation, sustainability and stakeholder management. The following discussion intends to provide a resolution for different challenges encountered by the event industry in the context of sustainability (Shafiq et al., 2013).
The first issue that is identified for event sustainability is the health and safety of participants which attains the foremost priority for event professionals. However, the majority of event sustainability plans do not include any specific provisions for the security of participants without realizing that a slight deviation in the safety procedures could result in far more detrimental consequences for the event as well as participants.
The objective of sustainability, in this case, should be directed towards the provision of a safe environment for staff and participants in the event that should be characterized by promising emergency response initiatives formed as a result of the assessment of risk management and action. The best practices for ensuring sustainability in this context involve references to the risk management plans and on-site emergency plans (Mahoney et al., 2015).
The sustainability of events is also influenced due to marginalization of event participants as well as other factors such as the design of venue and experience, differences on the basis of race, culture or gender, access to technology and affordability. The objective of sustainability in this context should be directed towards the reduction of complaints pertaining to event access and inclusion which can be accomplished through the best practices of establishing codes of conduct, virtual and hybrid event strategies, scholarship or bursary initiatives and provision of onsite translation and accessibility services (Shafiq et al., 2013).
Carbon emissions and solid waste management are also accounted as prominent sustainability issues for the event industry which can be identified in the example of almost 850kg of emissions being released in a four-day national tradeshow for every in-person participant. Carbon emissions could be addressed through the practices of selecting venue destinations that favour the use of renewable energy alongside practising energy efficiency. It has been estimated that the average participant in a conference is likely to produce almost 0.64 kg of the landfill at event venues on a daily basis with food waste occupying a major share of the event waste stream.
The other non-degradable wastes generated from events that add up to the burden of waste management include adhesives, tenting, vinyl and polystyrene. The solid waste reduction could be accomplished by the event management through targeting the reduction of the onsite landfill through practices involving a reduction in the utilization of disposable event materials alongside the development of a zero-waste event plan (Mahoney et al., 2015). Pollution management is also another major sustainability issue posed for the event industry which can be catered through the practices of purchasing organic food, prevention of water pollution and utilizing environmentally certified cleaners.
Evans, N., 2015. Strategic management for tourism, hospitality and events. Routledge.
Michelini, L., Iasevoli, G. and Theodoraki, E., 2017. Event venue satisfaction and its impact on sponsorship outcomes. Event Management, 21(3), pp.319-331.
Mahoney, K.L., Esckilsen, L.A., Jeralds, A. and Camp, S., 2015. Public assembly venue management: Sports, entertainment, meeting, and convention venues. Brown Books Publishing Group.
Mullins, L.J., 2001. Hospitality management and organisational behaviour. Pearson Education.
Rao, P.S. and Sahu, P.C., 2013. Impact of service quality on customer satisfaction in the hotel industry. IOSR Journal of Humanities and Social Science, 18(5), pp.39-44.
Shafiq, Y., Shafique, I., Din, M.S. and Cheema, K.U.R., 2013. Impact of Service quality on customer satisfaction: a study of hotel industry of Faisalabad, Pakistan.
Wood, R.C. ed., 2013. Key concepts in hospitality management. Sage.Order Now