Negative Economic Factors on Hotel Glorious Case Study

Negative Economic Factors on Hotel Glorious - Case Study Example The effects of economic recession on businesses are in most cases negative. Consumers tend to reduce the level of expenditure. This directly impacts on the demand for the product or services of the firm. To counter this trend, the firm might decide to lower prices as a strategy to attract more customers. The result is the reduction of profit margins or sometimes the firm can record a loss. In a recession, most employees are forced to take pay cuts or sometimes lose their employment. The impact of this is that most people will find an alternative or additional work to bridge the deficit. In an attempt to do this more time is spent generating the income with less time to engage in leisure (Tribe 2007, pp 67). The only expenditures that will not be greatly affected are those that deal directly with the basic needs. Due to this fact, the leisure industry is likely to be negatively affected by the recession. The possibility of growth in the wake of a recession is very minimal. This is occ asioned by the sustained decline in demand. In the case of the Glorious hotel, economic recession would provide an oblique future in the development. The possible reaction of this hotel to a global recession would be minimal as compared to the large reputable hotels in the leisure business. First, the hotel is run by the family. This implies that the motivation of the labor force to achieve the objective of profitability will not be affected to a greater percentage. The hotel can see the significant reduction in productivity at lower employees but the general level of service remains constant due to family management.