More information is available on the Orient Grand Hotel used in Chapter $1.$ The recent downturn in the economic environment has resulted in policy changes such that banks, financial services firms, and automobile firms, which all form an integral part of the hotel's target markets, have cut travel$-$related expenses for executives. No longer can executives of these firms travel first class on their business visits; they must now use only economy class travel. Moreover, they are now required to cut hotel stay$-$related expenses, so they have to stay in three$-$ and four$-$star hotels and not pay more than US$$350$ per night. These restrictions have had a major impact on hotels like the Orient Grand, which hotel owner Sara Aoki and her executives must resolve.

The region has also seen the effect of recent global political and economic factors on businesses at large. This has negatively impacted business travel to and from the region. That being stated, leisure travel to Tokyo has seen a significant growth Tokyo has continued to grow as a hub for culture, heritage, shopping, and entertainment. Moreover, it has turned around significantly as a travel destination over the past decade. Tokyo is also one of the emerging smart cities of the world.

The above trends need to be considered by Sara and her team, who have defined the Orient Grand largely as a business hotel. It is important that Sara and her team consider the emerging trends as they seek a solution to address the impact of the external environment on the business.

$1.$ Assess the impact of the environment on the Orient Grand Hotel. Make assumptions where necessary.

$2.$ How do customer$-$related factors affect the hotel as well as its competitors?

Make assumptions where necessary.

$3.$ How does the external environment affect the hotel's formulation of strategies?