The Contemporary Hospitality Industry
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Globalization has changed the business structures and life styles of people extremely. The expanded business operations and upgraded lifestyles of people have enhanced the disposable income which has developed the tourism and hospitality industry highly. It has enhanced the scope of employment within sector (Crick and Spencer, 2011). Hospitality industry deals with the relationship between guests and host. It includes the source of entertainment in the form of tours, food or special relaxation services. Current study will explore the dynamic characteristics of hospitality with focusing on current issues, future trends and development within industry.
The analysis of range of skills and information will help in creating an effective understanding of the process and operations of same. The report focuses on understanding the scope, scale and diversity of hospitality industry in UK and focuses on analysing the impact of same on the overall growth prospects (Chen and Choi, 2008). The various impacts on the growth and development of companies create high job opportunities within overall economy. The study will evaluate UK hospitality industry efficiently and would enhance the knowledge and understanding for same. Being a manager of Verve People recruitment management agency, I will study the overall industrial operations in UK to analyze the business operations and demand of employees within firms. This will help me in understanding the skills and attributes that these organizations seek in potential employees. This report is outlined in order to seek the nature and scope of hospitality industry.
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Hospitality industry in United Kingdom (UK) consists of varied and broad industry that ranges from worldwide corporation to single- person companies. According to Pearson Schools and Colleges, there are ample of different jobs in the hospitality industry (Pearson Schools and Colleges, “The UK hospitality industry”). During 2007-2010, the hospitality industry encountered tough time in their businesses due to the rise and fall in demand due to the global financial crisis. The employment level in this also decreased during this period. Apart from financial crisis, competition for resource and demand has also affected the industry to a great. However, the industry gained back its confidence slowly after 2010 with the rise in demand in the hospitality market in the UK. The hospitality industry in collaboration with the UK government has concentrated in maximizing its contribution towards the economic development of the country. This particular industry generates about 8% of total employment in the country and is regarded as the fifth largest industry in UK. Hospitality industry through proactive partnership with other industries have looked forward to address the main national objectives such as reduction in budget deficit, creation of new jobs for the upcoming generation, control long term employment and manage communal activities across Britain (British Hospitality Association).
The hospitality industry in the UK represents about 40,000 businesses where more than 2.4 million employees are employed across the country (British Hospitality Association, “Creating Jobs in Britain – A Hospitality Economy Proposition”). British Hospitality Association has launched different programs for encouraging pragmatic opportunity by partnering with industry and government. This programs aims at achieving shared goals for the growth of economy of the country. The industry contributes about £ 3.4 billion gross tax revenue to the British economy (British Hospitality Association, “Creating Jobs in Britain – A Hospitality Economy Proposition”). Hospitality industry in the UK generates about £90 billion revenue and contributes an estimated amount of £46 billion in the economy. Apart from generating 2.44 million jobs across the UK, the hospitality economy also generates additional 1.2 million jobs with the help of multiplier effects. It is observed that over 7, 00, 00 multiplier jobs are developed through supply chain purchases with the help of 2/3rd of the food and beverage, business and agricultural sectors.
The hospitality industry does not only comprise restaurants and hotel; in fact it takes into account 12 different sectors:
Hotel sector is regarded as the largest sector within the hospitality industry, which provides wide range of services to the customers from one bedded guest rooms to luxury beds. This sector is sub-divided into the following:
Motels or lodges: This establishment are developed near the highways and major roads of the country. Lodges are also convenient for the tourists and businessmen and thus, it is established near airports so that the customer reaches with much ease. The customers also get to stay in low priced rooms and thus accommodation is within budget. There are motels in the UK among which Medlar House is preferred for low priced stay whereas The Manor Hotel is ideal for the businessmen who come for business trips more often (Yahoo!7, “Accommodation”). They provide accommodation and food services like hotels. The quality of services depends on the facilities and demand which are present within market (Barron, 2008).
Guest houses: It offers few rooms to the guests, who get the accommodation at a low cost. The guests are served by limited range of catering services (only breakfast) . These provide premium services in terms of quality and cleanliness. The limited accommodation factors helps in delivering the customized and effective services to guests as per the industry norms. It focuses on meeting the overall needs and requirements of consumers.
Pubs, bars and nightclubs:With the change in lifestyle of the population in the UK, the demand for pubs, bars and nightclubs have increased. However, the pubs and bars have suffered from prolonged effect of strict enforcement pertaining to smoking ban and drink-driving laws. For this reason, for years the pubs and bars felt the need to diversify its range of products so as to attract customers (Yoo, Lee and Bai, 2011). The diversification is sports, wine, cocktail bars and family friendly pubs. The speciality of the sports bar is the large-screen television, where live sports are watched by the sport lovers with their friends and colleagues (British Hospitality Association). Cocktail bars have sophisticated decoration and a wide range of cocktail menu. Wine bars are continental coffee bars as it offers a wide range of drinks and attract clientele such as single women and many more. Family friendly pubs have a playground where children can play and their parents can enjoy food and drinks inside the pubs. There are many famous hangout pubs, bars and nightclubs for the celebrities, which increases. This sector has high profit margin. There is no labour cost for preparing drinks. When wine is bought in supermarket it costs £3 but when the same is bought in the bar or pub it costs about £10.
Restaurants: Restaurant sector in the UK offers wide range of food and services to the customers. The restaurant sector can be sub-divided into takeaways, popular catering, fast-food outlets, fine dining and mainstream catering. The takeaways provide quick services to the customers where as the fast food outlets do the same but in a specialised environment. Fine dining provides high quality of skilled services. Popular catering focuses on delivering food, coffee and snacks (found in retail shops). The services and quality is one of the major factors that adds on to the popularity and growth of an organization. Dining quality and services are rated on the basis of Michelin stars which help in developing an effective brand image of these organizations in the worldwide market (Davidson, McPhail and Barry, 2011). A restaurant focuses on developing a complete dining experience for the guests. It delivers parking services, dining services, soothing ambiance and complete course of meals. The cost of operations depends on menu and staff of the unit.
Organisation structure is defined as the hierarchical arrangement of communications, lines of authority, duties and rights of a company. Organizational structure of a company highlights the power, roles and responsibilities of the individual that are assigned and coordinated to them. It also identifies the flow of information between different levels of management in a company. The structure is dependent on strategies and objectives of the company. In a hospitality industry, the hotels, restaurants, bars, pubs and nightclubs are either owned by single owner or partners. There are several chains of restaurants that have served the restaurant industry for quite a long time. Thus, the ownership depends on the size of the hotels or restaurants or any other hospitality services. In hospitality industry, the power or authority is generally decentralized as the works are divided into a number of individuals working for an entity. For example, in a hotel, the managers assign different role to their subordinates, as a result, the responsibilities is delegated, which helps it to operate successfully.
The organisation structure for different companies is different: flat or tall. Tall organisational structure is found in hotels, which are very large in size and have different levels of management from managers to workers. For example, Hilton Hotels has developed tall structure which has divided its operations efficiently. The roles and responsibility relationship helps in the effective management of work. However, the flat structure does not have such levels of management. For example, if flat organisational structure is considered then the owner can be the manager and the chef. The management structure of such a restaurant is divided into two parts such as back and front house. The front house operations include departments such as beverage and food, conference, accommodation and banqueting. The back house operations include food preparation areas, finance and areas that are not seen by guests (Pathfinder International, “Organisational Structure”). McDonald has developed a flat organizational structure to enhance the freedom of employees while working and developing effective measures for managing the work.
There are different types of ownership structure in the accommodation sector. Among them two are famous such as franchise and ownership. Sole ownership refers to the opening of hotels or restaurants by the owner without any financial help except loans. Hilton hotel has adopted this practice in order to manage its business operations in different parts of the world. The main benefit of this ownership structure is that they have sole right on profit and the main disadvantage is that the owner has to bear the loss of the business. Hotels can also be franchised where the franchise can be the part of a renowned chain of hotels. McDonald's provide its franchise all over the world where the part of this renowned food chain has established its business operations efficiently. The main advantage of this type of ownership is that the franchises do not have to spend on marketing and promotional activities. The above mentioned ownership styles are popular in hotel industry. They offer wide range of standard services so as to lure the customers back again.
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The role played by the different hospitality related organisations and professional bodies are elaborated below.
British Hospitality Association (BHA): BHA is referred as the leading member organisation in the tourism and hospitality industry. The main role of BHA is to promote interests of brands, operators and owners across different hospitality sectors such as restaurants, hotels, serviced apartments and food service clubs. It helps the hospitality sectors to shape their future in the competitive market and contribute to the economic growth as well (British Hospitality Association, “About”). These organizations play a crucial role of determining the proper functioning of industry. It helps in developing standardization through forceful, coherent and co-ordinated way of working. Lack of these institutes may have resulted in creating a huge gap between industry norms and services offered. These institutes also help in maintaining the interest of independent restaurants by supporting them (He and Keung Lai, 2011).
Institute of Hospitality: It is a “professional body for individual managers and aspiring managers working and studying in hospitality, leisure and tourism industry” (Institute of Hospitality, “Welcome to Institute of Hospitality”). The institute helps the professional members to build their career in the hospitality sector and make them efficient for the competitive world. This organization helps in creating high scope of employment opportunities within country and developing the industry as well. It helps in developing professionals to fight out the tough competition within sector and creates effective career in hospitality. Lack of these services may have resulted in making UK incapable and incompetent in hospitality industry. Institute of hospitality has helped in developing the economy of UK by enhancing the scope of employment within sector (Law and van der Veen, 2008).
British Institute of Innkeeping: The institute helps individuals to develop skills for a particular industry. The main goal of the institute is to help the workers in pubs and bars to start their own business in that industry (Hospitality Guild, “British Institute of Innkeeping”). This institute has helped in developing the skills and attributes of prospective aspirants within sector. This has helped the industry in gaining skilled and talented force of employees and thus, in developing the operations of industry within this competitive market. Services such as e-learning, mentoring and Pub and Bar qualification has helped in raising the standards of services within industry and has flourished the employability skills of people as well. These institutes prepare people for developing their own career for enhancing the financial growth prospects within market.
Every business unit has unique demand for staff and skills and professionalism. Hospitality industry consists of a wide range of services that are offered to guests. These services seek effective standards and professionalism. Organizations deals with such individuals to reach at the ultimate goal of profit maximization and revenue generation (Mak, 2011). The requirements of these staff vary on the basis of scope, scale and structure of enterprise. The major staff requirements within hospitality industry are explained below by analysing the business operations of a hotel and event organization (Lundberg, Gudmundson and Andersson, 2009). The staff requirement for the same is elaborated hence forth:
Policy formers: These are the people who develop policies and execute them within organization in order to attain an effective growth within economy. They are knowledgeable, creative and innovative who analyzes the present market situations and evaluates the internal environment of business to seek possible threats and opportunities. This role is played by the marketing department within Hilton hotel. However, a small local event based company may delegate such tasks to owners and co-owners to develop effective policies and to implement them in the organization to gain effective growth within market (Crotts, Mason and Davis, 2009).
Planning staff: These employees are the one who plan daily activities within company and develop small and effective plans to develop smooth functioning for the organization. For example, Hilton hotel delegates such task to the departmental heads of various departments. For example, kitchen service is planned and managed by the head chef on daily basis. Similarly, an event company will delegate such task to the project manager of team who leads and delegates various roles and responsibilities to the team members.
Managers: These are the employees of organization who evaluated overall business operations and followed the needs of consumers as well. Managers within hospitality industry have to deal with immediate needs of consumers and quality services of the organization. They play a role of problem solver and manage overall functions of company (Watson, 2008). Hilton hotel employs well trained and skilled managers who have effective experience in this field of operations. Innovative, analytical and problem solving skills are highly demanded as the managers have to deal with human behaviour which is very difficult to judge. For an event, unit manager manages the overall business operations and develops effective measures to meet the clients' requirements.
Supervisors: They manage employees to ensure the effective working and proper resource availability. These employees rarely deal with consumers and mainly deal with the operational work of enterprises. Hilton hotel appoints supervisors for every department for example kitchen department, accommodation, housekeeping, front office etc. They handle the tasks of training and development of individuals and groups for the best experience of guests and maximum productivity of industry. Event organization on contrary focuses on analysing the needs and requirements of every employee and seeks quick and effective services on timely basis. They act as a mediator between services and sources.
Administrative staff: They are the most skilled and trained employees of company who deliver their premium services within business operations to manage the quality and satisfaction of employees. The professional exposure is limited to their performance and activities. Hilton hotel recruits staff as chefs, housekeeping, bar-tending, waitering, documentation etc. However, event unit recruit professionals for planning event, lighting and staging, decoration etc. Event manager develops a short term employment till the event is completed.
Roles and responsibilities within an industry vary from company to company on the basis of needs, requirements and skills. Every business unit operates efficiently within an economy to attain predetermined objectives to achieve growth and prosperity of business in this competitive market, company hires talented and skilled employees to perform the job in an efficient manner (Atwal and Williams, 2009). Various professional are having expertise in different jobs, this helps the business in attaining its objective efficiently. Organizations operate on a wide basis to attain the set objectives. Various roles, responsibilities and qualifications are demanded as per the industry norms (Measuredevents, “Hospitality Staffing, Event Staffing and Waiting Staff in London”; Jobofer.org, “Hospitality Staffing Solutions”). To analyze the same, following person specification will help in understanding specifically the factors that an organization considers while hiring employees. It also focuses on the roles and responsibilities played by individuals to attain the organizational objectives.
The hospitality industry is encountering operational and managerial issue in the contemporary world of management. The operating issues includes problems relating to food and safety, employees expectations, socio-cultural issues, flexible working hours, operating, procedures, retention and e-commerce. The hospitality industry has the responsibility to ensure the customers or guests that they are providing right quality food which is safe to consume. Employee expectation and retention is an important issue in present hospitality industry as the employees are leaving jobs due to work pressure and low pay (Numphud, “Industry Insight: the Hospitality Industry – the Answer to Unemployment?”). Thus, the industry should ensure that this issue is mitigated. Managerial issue relates to the identification of the key players in industry, marketing considerations, education, international aspects, media issues and training providers.
Hospitality industry is gaining the gradual light in emerging environment of complexities. People nowadays are able to differentiate between the thin lines of difference between established sub industries within broad perceptive. At present, the industry is focusing on high growth prospects within market by developing high and effective standards of business operations in the current competitive market. Increasing competition has resulted in enhancing the quality of services (Ackerman, Darrell and Weitzner, 2012). Continuous improvement and effective policies and standards have facilitated the enterprises in developing effective businesses environment to attain high returns on investments. The industry is optimistic and expects high returns as per the developing trends till the year 2020.
With the increase in international travel worldwide, the travel and tourism industry have encountered huge growth. At the same time, the safety and security concern has also increased due to several terrorist activities. Thus, increased security measures are adopted by the UK government so as to ensure safe journey and stay of the guests (Numphud, “Industry Insight: The Hospitality Industry – The Answer to Unemployment?”). Contingency plans are also developed by the government so that they can take immediate actions after any terrorist attack or natural disaster. The hospitality industry gives an opportunity to understand different cultures and appreciate them by interacting with tourists. In UK, the hospitality industry has encountered huge growth as they appreciate each and every culture and make a very good relationship with the different races and religions. According to the report of People 1st State of the Nation 2013, hospitality industry should recruit 6, 60, 200 employees by 2020. It is observed that unemployment level in UK have risen to about 2.52 million and the industry have thousands of vacancies (Numphud, “Industry Insight: The Hospitality Industry – The Answer to Unemployment?”). This will help in growing the business through education and awareness.
The above data clearly indicates that the industry is efficiently growing and infusing effective measures for the growth and development. Well defined marketing measures and well researched investments have created huge prospects for the UK hospitality industry. The historical legends and valuable heritage of country is continuously attracting wide prospects for tourism as well. Government’s policies and investment has helped the industry to create a well-developed structure to create effective brand image in the international market. Hence, the overall position of industry is moving towards brighter and prosperous future.
Hospitality industry is the third largest growing sector within business economics. Currently, the industry has huge prospect for the growth and development to create an edge within global economy. Tourism has subsequently contributed in the development of segment. UK has positioned a well-developed measure in the world market as a leading tourist destination at the global level. Thus, global business operations have efficiently helped the segment to enhance its networks and growth prospects within market. Technology enhancement is also one of the leading factors that has widely enhanced the growth and development of hospitality industry (Bartenwerffer and Boksberger, 2003). The potential future trends and development in this industry are elaborated henceforth.
Technological advancements: Technology plays a leading role in developing and enhancing business operations across the world. Increasing demand for hospitality services has enhanced the technology advancement within businesses to increase employee efficiency and to develop consumer engagement within industry. Traditional technological measures such as pagers and other communication measures have been taken over by Intranet, internet and email services within organization (Wen, 2009). Moreover, internet has helped the industry in developing and implementing creative and innovative ideas for the growth and development within the industry. This effectively helped various business units in providing fast and quality services to its consumers.
Global networking: Internet and social sites has helped in increasing the knowledge and in developing effective measures of popularising the products and services. Global networking has helped the industry in seeking effective measure to develop the business operations and to reduce the cost of operations. Services such as global supply chain management, outsourcing employees, international employees and culture diversity etc. has benefited the business operations and has helped companies in strengthening its position in the global market. Moreover, global networking trends has enhanced internal business operations and provided opportunities of creating valuable services for both employees and business units. Moreover, this has helped the businesses in creating high market demand by offering unique and differential services within market. It has also helped the business in developing cost effectiveness and thus, in creating growth measures for developing business operations.
Employee retaining practices: Employees are the major organizational resources for company. They help business in providing effective and quality services within market. Employees are the resources which analyze the need of consumers and develop efficient measures to meet the same. Cost of employee replacements is considerably high and it may lead to losses within industry. Effective working environment, proper sources of motivation, career development opportunities, continuous learning opportunities and managing international human resources are some common and effective strategies that have helped the business unit in gaining high efficiency in business (Vance and et.al., 2011). Thus, currently, businesses are focusing on developing high and effective measures to gain high consumer loyalty and to retain the staff for managing cost and equality of company. Moreover, employees develop organizational culture for business which is integral and a unique part of business. It is difficult for competitors to replicate the organizational culture and to implement them in their own organization. Thus, this helps company in gaining a competitive edge within market.
Management and operational trends: The changing environment has emerged the resource requirements and allocation practices in lime light. Collection of information, techno-grants and government support has increased the scope for the management of hospitality organizations. The operational practices are achieving quality benchmarks and it will be generalized in the near future. The organizations are focusing on creating its own competitive image within market to set a benchmark in the economy. Management and operational activities have been enhanced and developed to grow rising concern within sector (Beritelli, Strobl and Peters, 2013). Contracting services, franchising and individual entrepreneurs has gained huge success within markets. Business units currently focus on managing its business operations in such a way that they gain effective success by developing quality, speed and acceptability within market. Food chains such as McDonald’s have been adopting these measures to gain worldwide popularity and sales.
Increasing trends of tourism and hospitality has enhanced the number of tourists that are visiting UK. It focuses on providing effective accommodation and lodging facilities. Developing unique and effective infrastructure is helping the industry in creating wide popularity and edge within market. The major impact that has been faced by hospitality industry of UK is:
Lifestyle: The changing trends and demand within market have directly impacted the lifestyles of people in UK. Hospitality services are the basic needs and requirements of people. Enhanced bar facilities, better and quality food options as well as development of menu and refined ambiance and infrastructure will help the industry in developing lifestyles and standard of living in the country widely.
Infrastructure: The increasing demand for tourism and developing trends for services and accommodation will demand effective advancements in the infrastructure as well. The industry will prefer eco-lodging facilities for supporting green environment in UK. Mega-hotels will be needed to be established in order to offer multi-purpose facilities to the guests such as shops, casino, theatres and theme parks (Economic and Social Research Council, “UK hotel industry alive with innovation”). The mega hotels should also incorporate the banquet halls that can accommodate thousand guests.
Food and supply services: Food is the basic requirement for living. The current trends within market have proven that food is not merely the source of living but it is one of the major ingredients for leisure and entertainments as well. Development of healthy and innovative menu will help companies in enhancing the demand of products and services within competitive market.
Technology: The coming years and trends will demand enhanced and better services within industry to enhance the innovative practices and creative services for consumers. Many countries have developed effective means of creative practices such as unique dining hall experience, creative source of entertainment and efficient measures of transportation (Tourism: Investing in energy and resource efficiency, 2011). These will demand high investment in terms of technological advancements for the industry to create a close competition with highly advanced countries.
Legal: The need for legal and government funding will help in developing an effective and competitive structure for the industry. Moreover, policies related to employment opportunities, funding and setting quality standards will help the industry in creating high development and competitiveness within industry. Moreover, prohibiting smoking and proper waste management will lead a healthy environment to the people of country. The stakeholders will pass on corporate social responsibilities and similar activity to focus on social welfare.
Above report developed a clear and effective analysis of hospitality industry and trends and development that it has been facing in order to create high measures for the growth in global market. The scope, scale and structure define the present status of industry however the trend’s prediction and impact of development helped in analysing the future impact of these on industry. Hence, on the basis of above report, it can be concluded that in UK, there are few boutique hotels and thus, efforts are required to build more such hotels. The security system of hotels and restaurants should be more efficient so that the guests would not have to face dangerous situation (Jamieson, “UK Riots: Affects on the UK Hospitality Industry”).
One of the most important issues that are encountered by the UK hospitality industry is the increasing rate of employee turnover. Thus, the sector should focus on increasing the salaries of employees so that they can retain the efficient employees (Graduate Prospects Ltd, “Hospitality industry: An expert view”). Moreover, emphasis should be given on the technological and internet development so as to enhance the quality of services. The physical and virtual social networks should be implemented for the distribution channels.
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