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Table of Contents


The hospitality business in New Zealand is mainly focused on the tourism sector. Almost 65% of the countries depend upon the tourism business. Government is continuously focusing on improving the tourism sector and attract tourists. The hospitality business involves hotels, airways, trains and travel tourism. The Pestel analysis of New Zealand’s Hospitality business provides external influences on business organisation and tourists. The government supports the organisation by allowing them to carry out their business freely. The countries taxation is high which decreases the company’s profit. New Zealand has a stable GDP and inflation growth rate which provides a good business environment.

Task 1-

PESTEL Analysis

The PESTEL Analysis of the hospitality business in New Zealand assists the hospitality organisation to understand the external influences affecting their sales and productivity. The hospitality business involves tourism, hotels, flights and trains. New Zealand hospitality business is continuously growing and helping the country to improve its GDP. Hospitality business has provided employment at a huge scale. Pestel Analysis is the study of political, economic, legal, social, technological and environmental factors in which the organisation are operating their business. Every organisation has to carry out the analysis in order to understand the business environment (Benckendorff and Shu, 2019). The wildlife of New Zealand is affected due to tourism as most of the tourist visit zoos and forest. Soil erosion is also a tourism problem occurred due to tourism and the government must implement some policies to overcome the environmental degradation issues.

Section A

Political Factors

As suggested by Chowdhury et al. (2018), the political system is the key factor for any organisation before establishing.  The government laws, political system and economic stability are involved in the political factor. These factors provide economic strength and support to the business organisations. New Zealand has a very stable government and it provides superior chances of success because of their rules and regulations (Bavik, 2016). The political party changes every three years and the new government implements its own rules and regulations with keeping the business organisation in mind. New Zealand has strict rules laws and rules for labours. The lending rate is higher in New Zealand when compared to other countries. The organisations have to pay more taxes which make the organisation profit lower. The taxes directly go to the government's treasury. The government provides trade and business freedom to the organisation which assist the organisation to carry out their business easily. (2019), statistical data of New Zealand, Viewed at 11march 2019, by:


In the recent years, New Zealand has been continuously attracting foreign tourists because of its stable political environment. The current government has implemented some political approaches that have made the country perfect for tourism. The countries fair trading policy has a great impact on the hotels and transportation sectors. The government supports establishing new organisations as organisation decreases unemployment and increases the GDP. The government has a law for employees that ensure the organisation is playing appropriate compensation to its staffs and employees (, 2019). (2019), statistical data of New Zealand, Viewed at 11march 2019, by:

Section B

Economical Factors

The economic factors describe the countries trade with other countries. New Zealand economy mainly depends upon trade with its neighbouring countries like South Korea, China, Australia, United States, Japan and European Unions.  The manufacturing sector of New Zealand is small when compared to other countries and the countries the main economic focus is on tourism and primary industries. The government has collaborated with the World Bank to improve its tourism sectors. New Zealand is considered the most business-friendly country in the world and every country wants to work with New Zealand (, 2019). (2019), statistical data of New Zealand, Viewed at 10march 2019, by:

Inflation rate: The inflation rate of New Zealand is very low which provides a good business environment for the organisations. The tourism sector attracts tourist to maintain its economic growth and maintain its inflation rate. The unemployment is also low which a positive opportunity for GDP and economy growth becomes. The GDP rate of New Zealand differs from 3.4 % to 4.1% and the GDP rate attract foreign organisation to establish their business in New Zealand. (2019), statistical data of New Zealand, Viewed at 9march 2019, by:

Increase in minimum pay: New Zealand government has implemented some laws for labours. The industries and business organisation are bound to pay a minimum amount of compensation to its employees. The minimum pay in New Zealand is $16.50 NZD. The hospitality sector provides huge employment which improves countries economy.

Currency of exchange: New Zealand Dollar has continuously stayed strong against the other countries currency. Every New Zealand Dollar (NZ$) is exchanged for 1.26 American Dollar (US$). The currency exchange supports hotels and other tourism sectors. New Zealand has the lowest unemployment rate. (2019), statistical data of New Zealand, Viewed at 9march 2019, by:

Taxes: The business organisations have to pay more taxes to the government which decreases the organisation profit. The tax is collected in the government's treasury. New Zealand government utilizes the taxation money in improving its tourism sector and building infrastructures. (2019), statistical data of New Zealand, Viewed at 9march 2019, by:

Section C

Social Factors

Culture: The tourism trend keeps on changing and it affects the New Zealand Hospitality Sector. The country is depended on its tourism sector and the government takes every measure to attract tourists. New Zealand is mainly an urban country with approximately 72% of the citizens living in urban areas (Du Plessis and Tachiwona, 2016). The country has a total population of about 4.5 million in the four major cities. Large population encourages business organisation and provides a better business environment. The organisation is likely to succeed in high population areas (2019). (2019), statistical data of New Zealand, Viewed at 9march 2019, by:

Customer: The large population provides support to the government and the country doesn't have totally depends on its tourism sector. Most of the New Zealand population are younger people. Almost 20 % of the country’s population is aged between 24-16 years. Younger bodies are more energetic and enthusiastic and they help the country to develop. The hospitality business sector focuses on the youngster's demands.

Behaviour and Diversity: The literacy rate of New Zealand is 100% and the life expectancy is nearly 81 which is a very good sign for a social and healthy life. The governments continually focus on the tourism sector and provide facilities for frequent tourists. The government is very strong and provide support to its citizens and business organisation (Hallak et al. 2018). The country has people's belonging to various cultures and ethics. People from all over the world visit New Zealand for tourism. People settle in New Zealand because of its vast diversity and behaviour. (2019), statistical data of New Zealand, Viewed at 8march 2019, by:

Section D

Technological Factors: New Zealand continuously adopts new technologies to support the business organisation and citizens. Modern Technologies assists the organisation to improve their productivity and growth. The country focuses on developing technologies for its tourism sector to improve the tourism experience. New Zealand mostly depends upon its tourism business and its economic growth is also depended on the tourism sector.

Applications: The government has developed its own applications to support tourism business, business organisations, and citizens, travelling business, health and social care organisation and education sector. Hospitality applications like tourism and travelling focus on improving the tourism experience. The applications inform about the hotel's availability and their prices. The travelling applications inform about the means of transport suitable to travel from one city to another city. Few applications inform tourists about tourism locations. All of the applications prove to increase the tourist experience (, 2019). (2019), statistical data of New Zealand, Viewed at 8march 2019, by:

Website: The New Zealand website performs as a promotion of its tourism sector. The government website performs similarly like applications and provides information about every sector. The government website allows people to pay their electric or phone bills. The online banking sector is also carried out through the website. (2019), statistical data of New Zealand, Viewed at 9march 2019, by:

Mobile: New Zealand has modern technologies in the communication field. The network organisation focuses on implementing new technologies to improve the customer's experience. The country supports in trading technologies with other countries improve their technology standard. Technology trading is mainly done with Japan and South Korea. (2019), statistical data of New Zealand, Viewed at 9march 2019, by:

Social Media: New Zealand has the highest literacy rate which makes the people more modern and broad-minded. People are connected with each other with the help of social media. New Zealand supports the use of social media, as well as the government, carries out the promotion through social media. (2019), statistical data of New Zealand, Viewed at 10march 2019, by:

Environmental Factors: The tourism sector of New Zealand is mainly affected by its environment. As other factors are controllable and the government takes every measure to control them. Natural disasters and climate change affect the tourism sector. The government have made policies to control the environment and take suitable against any organisation degrading the environment. (2019), statistical data of New Zealand, Viewed at 10march 2019, by:

Natural Disaster: Earthquake is the only natural disaster that occurs in New Zealand. New Zealand is surrounded by water from all sides so the ocean can also cause any type of natural disaster (Fabling et al. 2019). Tourist is scared to visit New Zealand during the monsoon season. In recent years, New Zealand has not faced any natural calamities which become a positive sign for the tourism business. (2019), statistical data of New Zealand, Viewed at 10march 2019, by:

Climate Change: The climate of New Zealand plays a key role in attracting tourists. New Zealand is a cold country and the climate is mostly constant. New Zealand government utilises the climate as their opportunity to attract tourists. Thus the government provides insurance to the tourists against the natural calamities. (2019), statistical data of New Zealand, Viewed at 11march 2019, by:

Legal Factors:The legal factors involve the regulation and laws enacted in New Zealand. The government laws create a great impact on the organisations and people (Jogaratnam, 2017). The policies are made in accordance to support the organisation and provide a better business environment. Business environment attract foreign organisation to establish their companies in New Zealand. New Zealand invites foreign companies to start their business but the profit margin is low because of high taxation. The government provides support to the business organisation to carry out the operation without any fear and restrictions. (2019), statistical data of New Zealand, Viewed at 11march 2019, by:

Task 2

Primary Research Technique

The quantitative approach is influenced by the positivistic paradigm in hospitality business performance. The quantitative research method is based upon the scientific calculation and the monitoring is done with the help of numbers. A survey is one of the most successful quantitative approaches and research is carried out on a number of participants. The survey helps to collect data and information that could assist New Zealand government to know their drawbacks and opportunities. A survey has been carried out on 51 participants and their answers are viewed as their perception and attitudes towards the New Zealand policies and growth. The quantitative survey has three questions that have been answered by 51 participants.

Q1. Do you agree political factors influence on hospitality business?










According to the survey, 38 participants agree that the political factors influence the hospitality business in New Zealand and 13 participants don't agree. The business environment depends upon the political factors and every company looks on these factors before establishing their company (Yan, 2018). The political factors involve government laws and regulation and how flexible is the governing body. New Zealand government is supportive and there are some policies that provide freedom to the organisation to carry that business freely (Köseoglu et al. 2016).  New Zealand government focuses on investing foreign organisations to start their businesses in New Zealand’s cities. New companies will provide employment and improve economic growth.

Q2. Do you agree New Zealand taxation affects business performance?










According to the survey, 43 participants agree that New Zealand taxation affects the business and the rest of the participants don’t agree. Taxation in New Zealand is quite high compared to other countries (Madera et al. 2017). Companies have to pay more taxes which decrease the profit margin. Thus companies reduce the employee's compensation, with low compensation employees gets de-motivated and their productivity decreases. Employee’s productivity is directly proportional to the organisation productivity.

Q3. Do you agree inflation rate has a positive impact on the hospitality business?










According to the research, 31 participants agree that the inflation rate has a positive impact on the hospitality business and 20 participants think the inflation rate doesn’t have any impact on the hospitality business (Williamson et al. 2017). New Zealand has a constant inflation rate which provides a very good business environment. The business organisation gets attracted to the countries with a stable inflation rate. Lower inflation rate provides greater economy for the country. The GDP growth rate increases with a decrease in the inflation rate.

Secondary Research Technique-

As the positivist paradigm has limitations, researchers also use the qualitative approach to analyse the hospitality business performance in New Zealand (Tibay et al. 2018). Interpretive methodologies and diverse subjective are mainly considered as the qualitative approach. Tourism is a public phenomenon that implants people's experience that is shaped by cultural factors and social diversity. Ethnography is an important approach in this research. Ethnography assists to understand human behaviour and how an individual explains its view. Ethnography research mainly involves human observations in the day to day life. Ethnography doesn't involve any technical method to analyse and measure for the research (Singh and Attanayake, 2017). Researchers need to be reflective while using ethnography approach so that the researchers can interrogate the truth and produce an authentic report. The finding and knowledge of the research carried out by ethnography is genuine and real.

Tipping is a complex phenomenon and tipping is influenced by the values and customs. Tipping has consequences as well as significance for managing hospitality and tourism service. Some valuable questions are linked with the relationship between productivity, service quality and tipping. The tipping practice varies significantly across cities and countries. New Zealand hasn’t accepted the practice of tipping (Teahan, 2018). However, tipping has been started getting accepted in the country according to the analysis report. The managers are responsible for delivering the service and they have to look out and stop the practice of tipping.


Recommendations are:

  • The business organisation of New Zealand needs to introduce employee’s performance strategies. The organisation service is delivered by the employees to the service users. As per New Zealand's taxation, the organisation profit margin is low and the companies aren't able to provide suitable compensation to the employees. The employee’s productivity depends upon their compensation and the organisation productivity depends upon the employees. Thus employee’s performance has to be monitored to encourage organisation growth.
  • New Zealand must lower its taxation. Many foreign companies aren't starting any business because of the high tax rate. The lower tax rate will attract new companies that will provide employment and assist the country’s economy.
  • New Zealand government must focus more on producing products rather than completely focusing on the tourism sector.
  • The government must increase its import and export rate.


The study concludes that the hospitality business performance is highly influenced by the political, economic, environmental, social and technological factors. The Pestel analysis of the hospitality concludes the benefits and drawback of the New Zealand government. New Zealand government mainly focuses on the tourism sector as the tourism business is nearly 65% of the country’s economy. The research techniques used in the research, analyses people's perception of government policies and law.  New Zealand government invites foreign companies to start their business. New Zealand has stable inflation and GPD growth rate which is very positive for the business environment.

Reference List-

  • (2019), statistical data of New Zealand, Viewed at 11march 2019, by:
  • (2019), statistical data of New Zealand, Viewed at 10march 2019, by:
  • (2019), statistical data of New Zealand, Viewed at 9march 2019, by:
  • (2019), statistical data of New Zealand, Viewed at 8march 2019, by:
  • Bavik, A., (2016). Identification of organizational culture in the hospitality industry. In Tourism and hospitality management. 6(2). pp. 197-210. Emerald Group Publishing Limited.
  • Benckendorff, P. and Shu, M.L., (2019). Research impact benchmarks for tourism, hospitality and events scholars in Australia and New Zealand. Journal of Hospitality and Tourism Management, 3(8), pp.184-190.
  • Chowdhury, M., Prayag, G., Orchiston, C. and Spector, S., (2018). Postdisaster Social Capital, Adaptive Resilience and Business Performance of Tourism Organizations in Christchurch, New Zealand. Journal of Travel Research, 6(1).pp.43-119.
  • Du Plessis, A. and Tachiwona, G., (2016). The balanced scorecard in a New Zealand organisation: empirical evidence of change in their performance culture.
  • Fabling, R., Grimes, A. and Timar, L., (2019). 2. Natural selection: firm performance following a catastrophic earthquake. Resilience and Urban Disasters: Surviving Cities, 6(3). pp.30-99.
  • Hallak, R., Assaker, G., O’Connor, P. and Lee, C., (2018). Firm performance in the upscale restaurant sector: The effects of resilience, creative self-efficacy, innovation and industry experience. Journal of Retailing and Consumer Services, 40(3), pp.229-240.
  • Jogaratnam, G., (2017). How organizational culture influences market orientation and business performance in the restaurant industry. Journal of Hospitality and Tourism Management, 3(1), pp.211-219.
  • Köseoglu, M.A., Sehitoglu, Y., Ross, G. and Parnell, J.A., (2016). The evolution of business ethics research in the realm of tourism and hospitality: A bibliometric analysis. International Journal of Contemporary Hospitality Management, 28(8), pp.1598-1621.
  • Madera, J.M., Dawson, M., Guchait, P. and Belarmino, A.M., (2017). Strategic human resources management research in hospitality and tourism: A review of current literature and suggestions for the future. International Journal of Contemporary Hospitality Management, 29(1), pp.48-67.
  • Singh, G. and Attanayake, L., (2017). Impact of corporate social responsibility on financial performance of New Zealand companies.
  • Teahan, B., 2018. Licensing Trusts in New Zealand. Policy Quarterly, 14(1). pp. 659-789.
  • Tibay, V., Miller, J., Chang-Richards, A.Y., Egbelakin, T., Seville, E. and Wilkinson, S., (2018). Business resilience: A study of Auckland hospitality sector. Procedia engineering, 21(2), pp.1217-1224.
  • Williamson, D., Rasmussen, E. and Ravenswood, K., (2017). Power in the darkness: Taking a historical and critical employment relations approach in hospitality. Journal of Hospitality and Tourism Management, 33(6), pp.134-141.
  • Yan, R., (2018). An investigation of how job satisfaction mediates the impact of emotional intelligence on organisational citizenship behaviour in the New Zealand hospitality industry (Doctoral dissertation, Auckland University of Technology).

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