Behind the pulses: Factors influencing stock prices

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Behind the pulses: Factors influencing stock prices

Various factors may influence the stock prices. A few of the most prominent factors are performance of the company, industry, the economy as a whole. The reason which forms the crust of changes in stock prices is the supply-demand factor.

The value of a stock tends to increase if there is an increase in demand for that particular company’s stock in the market. On the other hand, if the demand is less, the prices fall. Also, when the demand is low, if there is surplus supply of stocks available, the stock prices have a sharp decrease. But, if the demand is high and only a limited number of stocks are available, the stock prices increase.

Investors also choose to buy or sell a company’s stock based on company’s news and performance. Some company-specific factors that can affect the share price are news releases on earnings and profits, future estimated earnings, announcement of dividends, introduction of a new product, a product recall, securing a new large contract, employee layoffs, anticipated takeover or merger, a change of management, accounting errors or scandals, etc,. If a company’s earnings increases or is likely to increase, the price of its stock also increases. If a company is in news for wrong reasons, then the price of its stocks is likely to decrease owing to the possibility of huge loss.

Next comes the performance of the particular sector or industry. Often, the stock prices of the companies in the same industry tend to influence each other. Sometimes, the stock price of a company will benefit from a piece of bad news for its competitor if the companies are competing for the same market. Thus, performance of the competitors within the same industry might cause an increase or decrease in the stock prices.

                Investor sentiment or confidence can cause the market to go up or down, which can cause stock prices to rise or fall. The general direction that the stock market takes can affect the value of a stock:

bull market – a strong stock market where stock prices are rising and investor confidence is growing. It’s often tied to economic recovery or an economic boom, as well as investor optimism. This could result in more buying of stocks.

bear market – a weak market where stock prices are falling and investor confidence is fading. It often happens when an economy is in recession and unemployment is high, with rising prices. Investors tend to sell off their stocks to avoid huge losses.

                Apart from these, economic factors such as interest rates, performance of the economy as a whole, inflation, economic and political shocks, the value of the country’ currency all have their part of impact on the stock prices. High interest rates tend to decrease stock price. If it looks like the economy is going to expand, stock prices may rise. Investors may buy more stocks thinking they will see future profits and higher stock prices. If the economic outlook is uncertain, investors may reduce their buying or start selling. Changes around the world can affect both the economy and stock prices. For example, a rise in energy costs can lead to lower sales, lower profits and lower stock prices. An act of terrorism can also lead to a downturn in economic activity and a fall in stock prices. If a new government comes into power, it may decide to make new policies. Sometimes these changes can be seen as good for business, and sometimes not. They may lead to changes in inflation and interest rates, which in turn may affect stock prices. If the value of the nation’s currency is high, it might not attract foreign customers thus reducing the profit from domestic foreign market. These are a few factors that influence stock prices.

 

 

 

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As tech usage increases, hotels have to go out-of-their way to survive!

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                               As tech usage increases, hotels have to go out-of-their way to survive!

The digital age, i.e. the rise of online travel agents, hotel booking agencies, customer help portals and the mobile applications of similar service agencies and portals have increased tremendously in a very short span of time. Websites like makemytrip.com, yatra.com, etc., are a great success and their mobile apps have numerous users too. In the first quarter of 2013, the hotels.com iPhone and iPad app topped the most popular travel app in both the UK and US. These digital-age babies have blended with a majority of peoples lives’. These websites or apps, provide its users comparative results based on price, comfort, service and other user preferences. Before these booking agencies portals came into existence, web-based booking was usually done through a particular hotel/ airlines website, the one to which the customer was loyal to. But with the rise of these booking agencies, the choices available to the travellers are plenty. And so did the demands of travellers rise, thus putting immense pressure on the hoteliers. These booking agencies and review sites acted as a medium between the hoteliers and the customers, but to the favour of customers. This reduced the customers’ loyalty towards a hotel. The hotels have to bridge this gap created from its customers by these booking agencies in order to survive the digital growth in the sector.

For this, the reason for the success of such booking agencies has to be analysed. When one observes the pattern of usage of these agencies, it is understood the effort and time the customers have to put in to book a hotel is largely reduced by these apps and websites. Apart from making their work easier, these agencies also provide various choices of comfort to the customers in just a click of a button. They provide last minute bookings too, thus giving the customers the opportunity to ‘plan on the go’. This cuts down the stress of reservations and pre-bookings.

The mobile apps of these agencies help the customers to book tickets/ hotels from wherever they are even while travelling. PhocusWright has estimated that online travel agencies made up about 64% of gross mobile hotel bookings in 2012, compared with 36% for hotels’ own mobile sites.

One trend which is very popular now is that of the customers expecting free internet connections from the hoteliers. In this digital era, this trend cannot be blamed because internet forms an integral part of our day to day activities. This has choked the hoteliers with some of them surviving the trend by giving –in to the ‘need’:

    A recent InterContinental Hotel Group (IHG) survey showed that 43% of adults would choose not to stay in a hotel that charged for the internet, with travellers from China placing the most importance on connectivity, with nearly 47% listing it as the most important thing to them when staying in a hotel for business. After IHG offered free wi-fi for its loyalty programme members, Accor and others made this freely available to all customers. (Source: www.pwc.com)

Hoteliers can’t fight the trend but grow with it by providing its customers a feel-good experience. This is because, with the customer ratings and the variety of choices available on these booking agencies platforms’ to the customers, their loyalty towards a hotel can be maintained only by winning the hearts of the customers. Only a great customer service would increase their preference for the hotel. So the hoteliers have to ensure they provide the customers a great and unique experience because at the end of the day, the customers decide their fate.

Besides offering great customer services, hoteliers have to expand themselves more digitally, by using social media for marketing and connecting to their prospective and present customers. Social media is being widely used by majority of the worldly population and using it as a business tool would be the best and most economic way to connect to the customers. Also, it is a semi-professional way of interaction which would help bridge the distance between the hoteliers and customers largely. Thus social media is a vital tool to integrate with the growing digital age. Moreover, 60% or so of social media time is spent not on desktop computers but on smartphones and tablets.

Therefore, devising ways of servicing and connecting with customers while enhancing their ease of access to same would ensure great results, if effectively used.

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With statistical inputs from: www.pwc.com; http://www.socialmediatoday.com

TRENDS- Wellness tourism: the wellness in and for India

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TRENDS-

Wellness tourism: the wellness in and for India

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       The SRI (Stanford Research Institute, an American non-profit research institute) International Study released at the 2013 Global Wellness Tourism Congress shows that the Wellness Tourism segment is already a near-half-trillion-dollar (USD 439 billion) market. It will surge to USD 678.5 billion by 2017, and that is nearly 50 per cent more growth than global tourism overall. Wellness Tourism also represents 14 per cent of the total global tourism revenue (USD 3.2 trillion), and will reach 16 per cent of total tourism revenue in four years.

   More people find the unhealthy travel less attractive and personally unsustainable, and are seeking to have healthier experiences in both leisure and business travel. This is expected to increase the growth pace of wellness tourism. Health and wellness tourism in India witnessed substantial growth of 21% in 2012. This growth was driven by all the categories of medical tourism, hotel/resort spas, destination spas and other spas. The growth in medical tourism was observed due to the depreciation of the local currency in 2012, which resulted in cheaper procedures for foreigners. Furthermore, with the increase of annual disposable income and consumer expenditure at 12% and 13% respectively, consumers were more willing to spend on luxury treatments. As a result spas, including destination spas situated in neighbourhoods and for which consumers did not have to have to be a guest in a hotel/resort, performed strongly in 2012.

Even before the Beatles went on their famous pilgrimage to Rishikesh with Maharishi Mahesh Yogi in 1969, India has been a popular travel destination for American tourists seeking serenity and spiritual growth. But in recent years, wellness travel to India has exploded. Spa experiences, healthy eating, opportunities for personal growth, yoga and meditation, fitness, stress reduction and holistic health are among the experiences sought by wellness travellers. A growing number of wellness retreats and spas are cropping up across India, from Dharamsala to Mysore, to accommodate the growing demand for holistic health-based travel. Also, the high stress in these rapidly-growing, industrialising countries like China, India and Brazil will make more people from these nations seek travel that offers true rejuvenation and health. Thus this could result in an increase of domestic wellness tourism in our country as well. Wellness Tourism in general, and for India specifically, is being fed by a rising, global consumer travel trend of more people seeking authentic, indigenous experiences, and looking to explore new cultures. India is perceived worldwide as one of the true spiritual homes of the modern wellness movement and has an ancient, rich history of Ayurveda, yoga and meditation. The SRI Study projects India to be number one globally for growth in Wellness Tourism over the next five years, clocking over 20 per cent gains annually through 2017.

“Over 20 million Americans and more than a quarter of a billion people worldwide now practise yoga. That is more than the populations of the UK, France, Germany and Italy put together. More people will now travel for the whole Ayurvedic ‘package’—pulse and dosha analysis by a qualified practitioner; Panchakarma, the multi-week detox; and dietary recommendations and coaching. Furthermore, the expectations of international wellness travellers to India have never been so well-met. There are many Indian properties and offerings—from the five-star to the much more affordable. When it comes to attracting wellness tourists to India, handled right, the results will multiply. And the new easier, more rational visa process for foreigners to visit India is really going to help”, says Susie Ellis, CEO and Chairman, Global Spa and Wellness Summit.

Many Indian spas are working towards striking the balance between authentic indigenous treatments that excite the international traveller, and more modern, ‘international’ styles of spas and products to lure the domestic tourists. Wellness and fitness markets will inevitably grow in India, and one factor that will fuel it is that over the last two decades the Indian population has adopted more western lifestyles, like fast food, smoking and sedentary desk jobs, all leading to an obesity and chronic disease (especially heart disease) crisis.

The marketing of spa and wellness in India is ahead of most countries. The visionary campaigns of ‘God’s Own Country’ to promote Kerala, or the ‘Incredible India’ campaign have heavily revolved around showcasing India’s wellness traditions. The potential of wellness systems, developed through centuries of wisdom of this ancient civilization would be fully tapped. This is being done by positioning India as a centre of Ayurveda, Yoga, Sidha, Naturopathy, etc. together with the spiritual philosophy that has been integral to the Indian way of life. Ministry of Tourism has drafted guideline for wellness tourism. These guidelines address issues regarding making available quality publicity material, training and capacity building for the service providers, participation in international & domestic Wellness related events, etc. Mushrooming of wellness centres in the country has given rise to the concern for quality service. The initiative of accreditation of wellness centres by National Board for Accreditation of Hospitals & Healthcare Services (NABH) propelled by the Ministry of Tourism, apart from helping in establishing quality services will also help the tourists to make a wise and well-served choice.