Published by MBA Skool Team, Last Updated: February 07, 2022
PESTLE Analysis of Hyatt analyses the brand on its business tactics. Hyatt PESTLE Analysis examines the various external factors like political, economic, social, technological (PEST) which impacts its business along with legal & environmental factors. The PESTLE Analysis highlights the different extrinsic scenarios which impact the business of the brand.
PESTLE analysis is a framework which is imperative for companies such as Hyatt, as it helps to understand market dynamics & improve its business continuously. PESTLE analysis is also referred to as PESTEL analysis.
The political factors in the Hyatt PESTLE Analysis can be explained as follows:
Hyatt Hotels Corporation is a multinational hospitality company that operates in 70 countries. Every country has different policies, foreign trade policies, tax policies, labor laws etc. which have an impact on Hyatt’s profitability and operations. Diversification of policies within Hyatt Hotels in different countries is extremely important for long term stability. Change of governments may hamper with the operations as different governments have different approaches and they may prioritize different sectors. The laws related to ownership of property should be studied thoroughly as Hyatt Hotels have to invest in land and infrastructure as a part of their business in hospitality. The host government’s focus on the infrastructure sector is important to look at too. Further countries with charge a high tax may reduce the profitability.
Below are the economic factors in the PESTLE Analysis of Hyatt:
A country with good economic growth implies year on year implies a constant growth in demand which in turn makes it a good country to invest in.
The exchange rate policy of a country is also important to look at because investment in a country with a high forex risk like Venezuela may turn out to be a bad investment in the long run. Countries that experience high tourism and where the tourism sector contributes to a large portion of the GDP might be good for demand and profitability. A good amount of inflation implies an increase in the disposable income of the consumers, therefore. A country with a low purchasing power means that Hyatt Hotels might have to operate on low margins. Ease of doing business in a country plays an important role in the day-to-day business of Hyatt Hotels. The demand for services in an economy should also be looked at because Hyatt Hotels is a business in providing hospitality. Events like The Great Recession and the pandemic have an adverse effect on the global economy and people are forced to spend less out of their pockets. But also, after such unforeseen events, there always comes a time when the economy starts to see some growth and the market sees a constant growth in the recovery period.
Following are the social factors impacting Hyatt PESTLE Analysis:
Hyatt Hotels welcome people of various cultures, colors, ethnicities, genders, ages, abilities, perspectives, and ways of thinking, and we have over 130,000 colleagues in over 70 countries. Since 2018, Hyatt Hotels have focused on providing opportunities to the underprivileged communities and have invested millions of dollars as a part of their RiseHY program. The Hyatt Hotels foundations have contributed 1 million USD in support of the black communities in the U.S. Sustainable Hospitality Alliance, Hire Opportunity Coalition and Gras of Life are some of the programs by Hyatt to tackle unemployment and skill gaps. Hyatt Hotels also have various programs of volunteerism and charity to support communities all over the world. They are a strong supporter of protecting human rights and has taken significant measures for human welfare. Hyatt Hotels focuses on purchasing from minority-owned businesses to support their development and sustainability, especially after the Covid pandemic. Cultural differences across countries should be kept in mind while planning and executing management decisions.
The technological factors in the PESTLE Analysis of Hyatt are mentioned below:
In a fast-moving technological world, it is important for any business to adapt in order to sustain and also increase profitability and ease the consumer experience. Mobile payments and other Fintech services should be analyzed and adapted accordingly. Social media presence and social media marketing have become relevant more recently and more so after the pandemic. Online booking through various booking websites should be made available. Hyatt Hotels have several “Lab Hotels” around the world where they test out new strategies and technological advancements on real guests and consumers.
Understanding consumer needs is important, Hyatt's recent initiative called “Work from Hyatt” saw a significant increase in revenue during the pandemic.
Following are the legal factors in the Hyatt PESTLE Analysis:
Lawsuits can have a negative impact on a company and tarnish its image. They can also increase the costs of the company and reduce profitability significantly. In a settlement in Biometric Class Action Lawsuit Hyatt has agreed to pay a penalty sum. The lawsuit claimed that Hyatt had allegedly violated the Biometric Information Privacy Act (BIPA) as it did not obtain written consent from its employees to use their finger scans to clock in and out of work.
In the Hyatt PESTLE Analysis, the environmental elements affecting its business are as below:
Being environmentally conscious has become extremely important for a business to run in the long run. Consumers are becoming more and more palpable about their feelings towards factors like climate change and the protection of our planet as a whole.
The various factors that Hyatt should look at are recycling and waste management, use of technologies that are renewable like solar-powered energy, use of eco-friendly products and avoidance of resource depletion such as groundwater by using methods like rainwater harvesting instead. Hyatt has set up several environmental goals to achieve by 2030. Climate change and water conservation are two of these issues that can be addressed by expanding the usage of renewable energy and grey water; by 2030, compared to 2019, reduce trash created on properties and achieve a 50 per cent global reduction in food waste sent to landfill or incinerated per square meter; increase responsible sourcing of products and services linked to climate change, deforestation, human rights, waste, public health, resource scarcity, biodiversity, and animal welfare concerns; Prioritize the vitality of their global communities by protecting local natural resources and cultural history, assisting in the conservation of biodiversity and animal welfare, managing water concerns, reducing pollution, and advancing climate resilience.
To conclude, the above Hyatt PESTLE Analysis highlights the various elements which impact its business performance. This understanding helps to evaluate the criticality of external business factors for any brand.
This article has been researched & authored by the Content & Research Team. It has been reviewed & published by the MBA Skool Team. The content on MBA Skool has been created for educational & academic purpose only.
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