Analysis of hotel industry
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Introduction to Hospitality
Hospitality means the relationship between visitor of hotel and hotel management. It relates to providing effective services to guests by the hotel management which in turn builds positive image of hotel in the minds of customers. In order to serve customers in a better way and to sustain tough competition in the hospitality industry, it is important for hotels to study contemporary hospitality. In the present research report, description on hospitality industry in UK will be provided. The report will also highlight the prevailing trends, problems and new developments within hospitality industry (Akbaba, 2006.). Thereafter, assessment will be provided related to the staffing requirement in different hospitality industries. However, there are various sectors which are the part of hospitality industry such as restaurants, clubs, hotels, party venues like night clubs and casinos etc. Thereafter, report will also highlight the staffing need of hospitality industry. Furthermore, for the precise study, the hotel sector within hospitality industry is selected. Thereafter, the current image of hotel sector will be explained in this report that will further help the prospective investors to invest in the hotel sectors.
1.1 Analysis of structure of hospitality industry
The hospitality industry is one of the giant sectors which is growing at a fast pace. However, the structure of hospitality industry of UK is wide and involves different firms ranging from organization owned by individual to global firms that are involving large number of individuals.
The scope of hospitality industry means the number of hotels that provide services and benefits to large number of people in UK. There are various commercial segments like, restaurants and fast food joints, hotels, clubs or pubs, theme parks and theme restaurants etc. Thereafter, various welfare organizations are also the part of hospitality industry like hospitals, old age homes and educational institutes. The population of UK is mostly dependent on the hospitality industry (Uriely, 2009). The recent study shows that with the increasing number of restaurants and fast food joints along with the improved hospitality services, dining out is common thing in UK.
The economic contribution of hospitality industry is approx £500 billion. According to the recent study, growth rate of more than 8% has been witnessed in the hospitality industry. The industry also provides employment opportunities to more than 2 million people. Therefore, it is ranked as the third largest employment generating industry in UK. Therefore, hospitality industry is one of the largest and diversified sectors.
Furthermore, the most important reason behind the diversification of hospitality industry is recent developments. Other reasons include inventions in this industry, current and expected trends, improvement in the level of services and increasing number of educational institutes that teach individuals the way to provide effective hospitality services (Tsai, Pan and Lee, 2011). These days, entertainment activities are taken as the crucial part of hospitality industry. There is growing trend of theme park and theme restaurants which are appreciated and liked by all generations.
Along with this, hotels these days provide fringe benefits like gym, spa, sauna bath, swimming pools and free WiFi which attract the young individuals. In addition to this aspect, hotels provide halls for business meetings and conferences which attract the corporate clients. Furthermore, the events like wedding, birthdays and other parties are organized by the hotel for their potential customers. Other major factors that lead to diversity in hotel industry are categorization of grading system and ownership management (Alves, 2006). There are various types of ownership styles like public and private enterprises, partnership organizations and sole ownership. Thereafter, nowadays, the potential guest can grade the performance of hotel by giving stars from level 1 - 5 on the basis of quality of services provided by them. Other customers can check these ratings and would decide that whether they should visit the particular hotel or not.
1.2 Description on organizational structure of various hospitality firms
Organizational structure represents the relationship between different employees that are working in the hotel and various units or divisions within such hotel (Pallet, 2003). It further helps in defining the division of work and responsibilities and thus, assists in defining the roles of various individuals within particular hotel. However, various organizations follow different organizational structures the description of which is as follows:
Tall organizational structure: It means the structure in which there are many hierarchical levels. In this structure, the number of managers is more than other structure and every manager has little span of control. This type of structure is mostly found in accommodation sector or hotels. To operate effectively, the hotels require large number of staff involving managers, workers and other employees like chefs and waiters. For instance, big hotels of UK like Marriott and Hilton follow tall organizational structure.
Flat organizational structure: In this structure, there is minimum level of organizational or hierarchical levels. Thereafter, the middle level management is mostly eliminated in such type of structure. Therefore, the decision making power is concentrated in the hands of top level executives (Schmidgall, 2006). Furthermore, the pubs and clubs follow the flat organizational structure as they are generally owned and operated by single or few individual. Therefore, the owner can itself be the manager of club or pubs and control the major activities.
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1.3 Role of organizations and professional bodies in hospitality industry
Hospitality industry is the fastest growing sector at present which provides large range of opportunities at different levels. With this aspect, the responsibilities of various organizations within hospitality industry have increased. Also, the concern among prospective individuals regarding their health has enhanced (Scope of hospitality industry. 2015). Therefore, it has become important for various organizations specially the food joints, restaurants and hotels to take care of the health of its potential customers. Therefore, there are many professional bodies that control and regulate various functions of hospitality related organizations. The professional bodies are the firms that assist various organizations within hospitality industry to attain core competencies within industry by developing innovative skills. The description of various professional bodies that are working in the hospitality industry is as follows:
British institute of Inn keeping (BII): It refers to the professional body that regulates the licensed trade associations. It involves more than 13000 members who also involve employees, managers, occupants and license holders (Baum, 2009). It also assists in developing the abilities of members in hospitality industry. Main objective of BII is to promote the business of clubs, bars and pubs. In addition to this, it assists in growing the business of such nightclubs by enhancing the skills and abilities of individuals intending to start a new pub or club. It provides guidance to individuals who want to enhance their career opportunities in the licensed trade (Role of British Hospitality Association. 2015). For this aspect, BII with the help of their training and development programs improve the skills of managers and other professionals in amending their existing skills. It also provides important advice on business matters and suggests the best investment and saving options. In order to make learning easy for members, it provides online training. Apart from this, there are various corporate benefits like BII issues business magazine where it promotes the business of member corporations (Derr, 2006).
1.4 The description about the staffing requirement of hospitality industry
The hospitality sector is among leading service sector which contributes major portion in economic development of UK. However, the hospitality industry involves various service industry like, food, accommodation, leisure, travel and tourism. Further, the hospitality industry is vast and involves the contribution of several individuals to provide effective services. Also, the various sectors within hospitality industry like, big hotels, franchisees and theme parks or restaurants involve various units in its organization structure like, human resource, maintenance department, marketing and operational units which serve directly to customers like, waiters, chefs, housekeepers, guards, bar tenders etc (Pallet, 2003).
Hospitality industry can be bifurcated into segments which involve leisure activities such as, night clubs, pubs, bars, and stay facility. The accommodation facility is provided by private hotels, public apartments, resorts, hotels, motels and hotels. Thereafter, class of clubs and bars involve restaurants, fast foods, and nightclubs. The hospitality industry also includes tourism support commercial activities such as airline cabin staff and travel agents (Gill, 2002).
Therefore, to ensure the smooth functioning and perform various operations within the aforementioned segments large range of individuals are required. However, the individuals must be customer oriented and possess skills essential to provide quality hospitality services. While employing staff for hospitality industry the human resource management must ensure that prospective candidate must possess good communication skill, presentation skills, interpersonal skills etc. In order to fulfill the staffing requirement, the organization related to hospitality industry can take the help of hospitality recruitment agency (Schmidgall, 2006). These agency possess huge database of competent candidate who are qualified to provide services to hospitality industry. The organization can select the suitable candidate for suitable job with the help of recruitment agency. Thereafter, the organization in hospitality industry can take help of campus interviews to fulfill its staffing recruitment. The campus interviews can be conducted in leading management colleges, hotel management institutions etc.
Furthermore, the various positions for which the hospitality industry need competent candidate are such as, personnel to manage food and services. The restaurants, fast food joints and franchise need staff who can satisfy customer by providing good quality food and service (Williams and Uysal, 2003). For this aspect, these organization can provide on the job training so staff perform different functions in an effective manner. Thereafter, hotels need employees who can handle various operations within hotel. They require staff in various areas like, marketing, human resource management, house keeping, maintenance and security etc. The selection of suitable candidate will help organization in providing comfortable stay and good experience to guest. Likewise, it is also required for accommodation sectors like, hotels, motels, resorts etc. to hire best housekeeping staff who can keep accommodation healthy and clean (Kang, Lee and Huh, 2010). Thereafter, the pubs, clubs and theme restaurants require food service staff, bartenders to prepare delicious food and serve drinks or beverages as per the order of guest. Furthermore, other service areas like travel and transportation require personnel who can convince clients to plan a trip, agents who can give proper advice on travel plans and fulfill the requirement of clients in a better manner.
1.5 Description about roles, responsibilities and qualification requirement of hospitality staff
The hospitality industry is very wide and to perform different functions in various areas it require contribution of several individuals. However, there are various roles and responsibilities of hospitality staff which they must fulfill properly in order to serve customers properly. The roles and responsibilities are allocated to staff on the basis of key units of such hospitality organization (Akbaba, 2006). However, these units are categorized in two ways: front desk jobs and back office job. The front office manager have different roles and responsibilities within hospitality organization which he is required to fulfill duly.
- The front desk manager is responsible for developing menus, providing dining services, welcoming guests, picking orders, giving suggestions and collecting payment.
- They provide check in and check out related information to customers. They ensure guests don't face any problem while arriving or leaving the hotel premises.
- They also help guest in reserving their seats prior to their visit in restaurants to provide them convenience (Jauhari, 2006).
- They are responsible for providing direct services to guest and thus fulfill their requirements. They have main role in hospitality industry as they directly communicate to customers (Wagen and Goonetilleke, 2007).
- The main responsibility of front desk manager is to receiving phone calls of customers, answering their queries, solving their problems, booking accommodation for guest etc.
- The front desk manager effectively communicate to guest and help in retaining the customers and become repetitive guest for them.
- Front desk manager is responsible for identifying the needs and preferences of customers. Further, they use this information for modifying menus, allocating price for different dishes, providing food as per customized needs of customers and maintaining taste and serving healthy food to guest (Uriely, 2009).
- Front desk manager ensures that the health standards of hospitality organization are maintained (Smriti, 2014). They are responsible for maintaining hygiene and ensuring proper cleanliness within the organization. For this aspect, they overlook the work of hospitality staff also and instructions to them as required.
- The front desk manager is also responsible for doing promotion of hospitality organization. Therefore, he explains the promotional offers, packages and additional benefits that can be availed by customers.
- The front desk manager provide training and development to front desk personnel to retain them within the company. It also play important role in staffing and selection of front office employees (Williams and Uysal, 2003).
- The front desk manager evaluate the performance of front office personnel and making decision about their salary, incentives etc.
- The front desk manager handle the cash and verify the cash . He also maintain the credit policies.
- The front desk manager maintain the record of frequent guests, VIP guests and their needs and preferences. Thereafter, it give suggestions to management so that they can take steps to meet the needs of such guests (Victorinon and et. al., 2005).
- The front desk manager that front office accounts, registers are properly maintained. Thereafter, report is generated and analyzed properly.
- The main responsibility of front desk manager is to check the implementation of hotel policies and rules.
- The front office manager reviews the feedback and log book on a routine basis.
Furthermore, to fulfill these aforementioned responsibility in better manner it is important for front desk manager to possess required qualification. Therefore, he must have degree in hospitality management (Jauhari, 2006). Minimum 3 years college degree and should be competent to speak, read and write properly. The manager should have knowledge about different languages to communicate to different customers of other country. Further, front desk manager should have experience in front desk supervisory.
1.6 The description about the current image of hospitality industry
As per the current scenario, the hospitality industry is growing at a fast pace and there have been enormous changes in hospitality sector. The trend of theme parks and theme restaurants is increasing. The youths prefer theme based restaurants and park more interesting and like visiting them repetitively (Sanders, 2010). The number of restaurants, food joints have increased and people more prefer dinning out than dinning in. Thereafter, the house hold disposable income in UK has increased and individuals prefer spending money more on recreational activities like visiting pubs, night clubs and disc. There are rapid number of new hotels, motels, resorts, inn etc starting in every corner of UK. However, the guest prefer accommodation which are highly rated and provide hygienic surroundings to their guest. Likewise, the guest in restaurants prefer healthy food and beverages and like organic food more.
There has been noticed the increasing consciousness among people regarding their health and hygiene. The customer can give grading to the services provided by hospitality organization. This further help prospective customers to decide whether they should spend on the services of particular hotel or not. Thereafter, for marketing the services hospitality establishment rely more on online marketing and marketing on social networking sites. The customers prefer making online reservations on particular hotel website to save time and ensure ease. Due to globalisation big hotel can open chain of hotels in various parts of country (Victorinon and et. al., 2005). For instance, Marriott is serving in over 80 countries and fulling needs and preferences of its target customers. Thereafter, development of advanced technology is also a part of current trend where, hospitality organizations tend to use latest gadgets and maintenance equipment to stay in competition with other rivals.
Furthermore, the hotels these days not only provide mere accommodation to its guest but provide fringe benefits. The customers like hotels and resorts which have gym, swimming pools, spa, sauna, gaming zones etc. Thereafter, these days people take help of travel agencies to plan their trip. The individuals have started incurring more expenditures on relaxing trips and holidays. For this aspect, the concept of affordable budget airlines travel facilities, and budget hotels has started (Zaina, 2012). This further stimulate people to travel around the world. Therefore, the excess of spending by people in the hospitality segments is causing more growth and development in hospitality industry. Furthermore, the emerging concept of destination weddings and other celebrations is contributing to development of luxurious hotels in different part of world. Thereafter, the existing big hotels are expanding their business through merger and acquisition Therefore, it has been noticed that the latest trends are causing positive impact on the organizations within hospitality industry.
2.1 An analysis on operational, managerial and legislative issue
The rising operational, managerial and legislative issues are causing hindrance in the growth and progress of hospitality industry. To ensure the development of industry and smooth functioning of organizations within hospitality industry to overcome these issues. The analysis of various operational, managerial and legislative issues is as follows:
Operational issues: These are the issues that restricts the organization to perform smoothly its operations. With the expanding areas in hospitality industry it is becoming more difficult for the hotel management to manage different operations simultaneously. The major operational issues faced by hospitality organization are, maintaining the standard process of executing operations (Smriti, 2014). The hotels also face issues in sustaining the cut throat competition from rivals because of rapid changing trends and technology. The other issues are, managing human resources, retaining best employees and loyal customers, fulling the needs and expectations of customers and employees. Thereafter, increasing social and cultural issues also cause difficulty in managing various operations.
Furthermore, the hotel segment mostly face operational issues which impact their performance in market. The major issue that hotel face is, fulfilling the employee expectations and retaining the competent candidates within hotel. The employees are key assets that help in ensuring the proper functioning on the establishment. Therefore, to minimize employee related operational issues, it is important for management of hotel to ensure satisfaction of employees (Hudman and Hawkins. 2006).
In addition to this aspect, another issue faced by hotels is regarding implementation of standardized functional procedure. It further help in handling different operational task effectively. It also enhance the pace and quality of services (Pallet, 2003). For instance, nowadays reservations of accommodation in hotel can be done through online. Therefore, it is important for organizations to manage their operational issues.
Managerial issues: There are various issues faced by the management of hospitality organization that affect their working practices. Some of the issues faced by management are, identifying the important players in hospitality industry and finding innovative ways to overcome competition from them (Gill, 2002). Thereafter, the organization can follow the procedures adopted by rivals and plan innovative business strategies. The other issues involve, managing marketing activities which is very important to attract potential customers.
The another issue faced by managers is regarding management of financial and non financial assets. The management should ensure it have enough funds to manage various operations (Derr, 2006). To fulfill the capital requirement establishment can take help of bank and other financial institutions. In addition to this aspect, it should also assure it have sufficient human inventory that will assist the establishment in executing specific operations. For this aspect, it is required for managers to focus on staffing and recruitment process.
The managerial issues also relate to organizing training and development programs and identifying the needs of staff. The management also face problems in maintaining customer database which further help in fulfilling the needs and preference of prospective customers. The other areas where major issues are faced by managers is managing and implementing the new trends within hospitality industry (Baum, 2009). However, many a times the implementation of latest trend requires some crucial changes which are often resisted by staff. For instance, use of digital technology to replace human beings like, use of digital care takers and replacing waiters. In this respect, one can place order using mobile applications etc. On the contrary, it will impact the job of waiters as the management may cut down it workforce.
Legislative issue: These represents legal issues faced by the organizations within hospitality industry that impact their performance (Hogan, 2012). The government of UK generate various guidelines for the functioning of hospitality industry. Therefore, it is important for hospitality organization to strictly adhere the rules and regulations framed by UK government. However, these regulation have strong impact on the functioning of different enterprises within hospitality industry such as, the bars, nightclubs are required to obtain government license (Alves, 2006). Any change in government policy also cause adverse impact on the functioning of pubs, discs etc. for instance, if government impose restriction that nightclubs, pubs etc cannot operate after 1 pm will affect the profitability of such establishments.
Thereafter, there are some legal issues faced by accommodation sectors like maintaining the health and hygiene standards specified by government. For this aspect, the hotel management is required to have up to date information on safety standards and communicate the same to employees. This involve too much time and effort of organizational members. In addition to this aspect, the emerging concept of going green is also one of the issue faced by hospitality industry (Sharpley and Sundaram, 2005). Thereafter, as per this aspect accommodation segments are required to use environment friendly processes to execute various operations. Therefore, the establishments are required to invest significant amount of money on various processes that are more environment friendly.
Further, emerging trend of globalization has evolved more rules and regulations for hospitality industry. The hotels are required to take permission from government before starting new chain of hotel in new country. Thereafter, it has also aroused new issues regarding managing the diversified culture of various nations where hotel intend to start its operations. The cultural issues should be strictly managed in order to maintain the decorum of brand. For instance, eye contact or hand shake with females is not appreciated in some Gulf and Asian countries while, in Europe and other western country it is not a issue (Uriely, 2009). Therefore, it is required for management to give proper training to its employees regarding how to introduce themselves to different guest from various parts of globe. This will further help the hospitality industry in growing at global level and sustaining competition in different host countries.
2.2 Justification on predicted future trends in hospitality industry
In order to maintain competitive edge over rivals it is important for various organizations within hospitality industry to implement latest trends. This will further help in ensuring overall growth of such enterprises. However, some of the future trends are predicted which will impact the performance various organizations in hospitality industry (Chanoux, 2012). Therefore, it is required for managers of hospitality organization to consider such future trends for effective operations in future. The description and justification of future trends is as follows:
Innovative and powerful technology: It is predicted that in future people will use mobile applications to place order in restaurants, book accommodation in hotel etc. The management of hotel will also take help of smart phone applications to communicate with employees (Tsai, Pan and Lee, 2011). The HR can also use smart phone and give training to employees by using visual chats, sharing videos that enhance the learning of staff members. In order to attract the youths of hospitality segment, it is required to focus more innovative and powerful technology. The organization can use research and development to find attractive technology.
Targeting the needs of millennials: The term millennial refers to customers falling in the age group of 18-34 years. It has been predicted that in coming 10 years millennials will correspond to 50 % of prospective travelers to the UK. Therefore, it is important for hospitality organizations to reach the target millennial (Schmidgall, 2006). For this aspect, the enterprise can take help of social networking sites as, most of the millennial spend significant amount of time on such sites. The accommodation sector can influence them by providing cheap accommodation, various benefits like free WiFi, gym, spa, easy check in facility. Thereafter, organization can define their business strategies after studying various traits of target segment. Furthermore, the happy and satisfied millennials will further encourage the business of hospitality organization on social networking sites by giving rating etc.
Increased health consciousness: It has been predicted that organization will emphasis more on well being of its prospective client. For this aspect, more consideration will be given on developing fitness centers, gyms and swimming pool within hotels. Thereafter, in future it is predicted that there will be more demand of organic food than junk food. Furthermore, to ensure the sound health of its prospective customers it is important for hotels to have yoga space and other exercise facility for its guest (Williams and Uysal, 2003). The accommodation sector, should also have vitamin infused bathing facility.
Implication of sustainability rule: It is becoming important for organizations in hospitality industry to follow environment friendly practices. As per future prediction it will be required for various organizations to use eco friendly processes. In addition to this aspect, hospitality organizations can use energy resources which are renewable. The hotels can use rain water harvesting to manage the water scarcity (Wagen and Goonetilleke, 2007). Thereafter, most of the accommodation sectors are planning to implement high tech systems that will consume less electricity and facilitate automatic switching of electricity when customer exit from their rooms.
Online promotion: With the rapid use of online mediums and social networking sites the concept of self promotion is increasing among hotels (Rauch, 2013). It is also more effective, impelling and less costly method. The satisfied customer also help in promoting the business of hospitality organization. The social networking site like Facebook give check in facility to individual by which one can let other people know about its current location. This generate awareness among public about the location of hotel or restaurants etc. The hospitality organization also use images of happy clients, their reviews and ratings regarding hotel or restaurants to promote their business (Weidenfeld, 2006).
2.3 The impact and analysis of predicted trends and developments
There has been positive impact of predicted trends on hospitality industry. The current trends are very much helpful for the overall progress of hospitality industry. The predicted trends will help the various organizations within hospitality industry to prepare in advance for future. This will also lead to better understanding of future needs and preferences of target customers. Thereafter, by considering the forecasted trends various hotels can prepare business strategies for future which will also help the enterprise in aligning the strategies with latest trends ( Getz and Petersen, 2005). This will further help the establishment in attaining competitive advantage over its rival.
With the help of latest technology the hospitality organization can attract more and more customers. The corporate clients also want hotels which are equipped with upgraded technology so they can conduct their business meetings. Therefore, the implication of powerful technology will enhance the profitability of hotel. Thereafter, by catering the needs and preference of millennials the respective organizations of accommodation and tourism sector can increase their customer base (Jauhari, 2006).
Furthermore, the improved emphasis on health and well being of target customers will improve the image of respective hotel or restaurants in the eyes of customers as well as government. This will build the positive image of hotel or restaurant in market. Thereafter, by using eco friendly methods company can improve its economic viability, reduce the unnecessary cost (Kang, Lee and Huh, 2010). However, even customers like those hospitality organizations which are environment friendly. Therefore, this will also help in targeting more customers and building positive image of organization among them.
The self promotion on online websites and social networking site will cut down the excess expenditures on advertisement on television and other media. Further, the concept of destination promotion is new and more effective (Victorinon and et. al., 2005). This will help the organization within hospitality industry to spread awareness among public about various facilities provided by them. Thereafter, the enterprise can pull more customer and increase its business.
After summarizing the above report, it has been concluded that contemporary hospitality provides great contribution to the development of economy. With the help of contemporary hospitality various organizations within hospitality industry can improve their quality of services. The analysis of structure of hospitality organization help in various individuals and business organization in making investment decision. It has been identified that various organization within hospitality industry follow different structure. Thereafter, professional bodies like British hospitality association and British institute of Inn keeping define role for various organizations within hospitality industry. Furthermore, the predicted future trends help organization in preparing for future and prepare suitable business strategies considering those trends.
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