Current and Future Trends in a Sector of the Hospitality Industry - Research Paper Example

 Evaluating Top Two Issues in the Context of the Current and Future Trends in Relation to a Sector of the Hospitality Industry CHAPTER 1 INTRODUCTION 1.1 Issues in Hospitality Industry The international society of hospitality consultants (ISHC) have discussed over 100 issues to find out the top ten issues of the hospitality industry. Ultimately, the following Top Ten Issues were identified as ones that can be expected to potentially have the greatest impact on the industry in 2007. Growing shortage of skilled and qualified employees along with escalation of construction and renovation cost were two of the major issues discussed in ISHC. Followed by were the difficulty to keep up with the rapidly changing technology, Changing demographic and their impact on travel trends, considering the future of Hotel profits with balancing escalating expenses with the need to increase rates, Mitigating consumer confusion over brand proliferation and investor concerns over cross brand impact, Keeping up with rapidly changing playing field, And their impact on the travel industry, the changing travel patterns, issues in capital availability are the other aspects in the top ten issues (Hotel Line Special Report 2006). As the time changes, even the hospitality industry has changed a lot for the better. While many of the issues have been effectively dealt with, a number of new asking issues have come to the scenario. A person lacking in a skill is likely to be less productive than someone who possesses such a skill (Frogner 2002). The problem of creating and maintaining a loyal and skillful work load is always a challenge for all the business owners around the world. 1.2 The Issues an Over all view It has been anticipated that all the aspects of construction and renovation cost will continue to keep on increasing. ‘It was mainly because steel prices experienced a 48.8-percent increase in 2004, which was preceded by significant increases in scrap iron and steel prices in 2002 and 2003. Steel prices held steady in 2005 but jumped again in 2006 through 2009. They are expected to increase again in 2010 and beyond as demand for steel from construction projects in China and India increases. Scrap iron and steel prices have increased approximately 20 percent in the past twelve months’ (Hotel Line Special Report 2006). Hospitality management systems have evolved into sophisticated, well integrated, multi- discipline tools capable of helping properties of all types and sizes attract more guests, generate more revenue and reach much-improved levels of efficiency. But still, in the certain areas of the world the main technological factors of the hospitality industry completely have to depend on outsourcing facilities which at times turns out to be more complex operations. This phenomenon is mainly because ‘of the complexity of the hotel environment, which historically has required many different systems to interact with each other, a lack of awareness of how much efficiency could be improved through the use of modern integrated systems, a historic preference for investing funds in furnishing, fixtures and equipment rather than in the systems themselves or in regular training for their users, and the difficulty of providing comprehensive, expert technical support at the individual property level for the multiple systems used there’(Hotel Line Special Report 2006). More over for the smooth running of the tourism industry it is important nowadays to train the staff to safe handling of cleaning chemicals, including instruction that hot surfaces should be allowed to cool sufficiently before applying oven cleaner. This would prevent producing harmful fumes. There should be adequate ventilation while the cleaning is underway. Personal protective clothing should be provided when using the substance, eg appropriate gloves, face visor, fume mask, apron, as per manufacturer’s recommendations (HSE information sheet 2003). CHAPTER 2 2.1 Labor and Skills Shortage A skill can be defined as an ability to perform a productive task at a certain level of competence (Shah and Burke 2005). Knowing this, one is often faced with the question that ‘why can’t we find good people? Demography, wage levels, failure to adequately address worker satisfaction and a reputation for long hours and low pay are all cited as contributing factors to this difficulty of finding enough skilled professionals. By now, Creative hospitality professionals have begun to develop innovative strategies for capturing and keeping high quality workers ‘(Hotel Line Special Report 2006) based on the theory that although skills are often associated with the acquisition through education and training, skills can also be obtained using informal learning mechanism and on the job experience (Bosworth, Dutton and Lewis 1992). The hospitality industry in fact is looking out for general skills which are required by a large number of organizations (Becker 1962). At the same time the basic skills one learns in the school before going into work is necessary for the further development of skills (National Skill Task Force UK 2000). Though the hotel line special report (2006) seems to be exaggerating when they said that ‘Population growth rates have been slowing in Europe, the U.S. and elsewhere for decades so the number of workers leaving the workforce now exceeds those that are entering. The aging workforce moving into retirement is creating a huge void that can only be expected to grow larger going forward’. It is a serious side of the fact that has been going on for quiet some time now. What ever might be the reason for the shortage of skilled labor, but the actuality is that when customers are waiting for firms to source skilled labors to provide product or services both customers and business owners become aggravated (Richardson 2007). A continued lack of training and skilled labor across the industry is leaving many operators up a creek without a paddle. While it's a subset of the general training concerns we have on regional basis across various industries, it's still a significant issue that needs to be addressed. This includes preventing outfitters from being able to build up proper staffing levels with sufficiently experienced and knowledgeable workers (Stewart 2009). The notion of sustainable tourism has been promoted as a means of maximizing tourism’s settlement while minimizing some of the downbeat impacts connected with tourism development. Education is crucial in responding to the broader issues within tourism development that affect the wider society (Lewis, 2006). 2.2 Tourism and hospitality Education and Training There are very few industries which could make such an impact on the global community as tourism industry. The WORLD Tourism Organization’s (WTO) Tourism 2020 Vision forecasts that the number of international arrivals worldwide will increase to almost 1.6 billion, and receipts from tourism (excluding transport) are projected to reach US $2 trillion by 2020 (WTO, 2001). The WTO’s expectations were proved to be on the right track with statistics that said the number of international arrivals shows an evolution from a mere 25 million international arrivals in 1950 to a record 842 million in 2006 generating an estimated worldwide receipts of US$736 billion (WTO, 2007a; 2007b). Tourism development as far as a region is concerned requires the establishment of education training programs to improve public understanding and enhance business, vocational and professional skills (Jamieson 2003). Training the locale skill is crucial as ‘tourism management needs to involve local communities’ (Zimmermann 2006). Though there had been a claim earlier that ‘the profile of tourism education has been elevated as a result of the increased recognition in government circles of the economic importance of tourism’ (Cooper, Shepherd, and Westlake 1996) in fact the training and teaching of tourism and hospitality industry has not been able to keep the pace up with the development and technology of the tourism and hospitality industry. Labor shortages in the foodservice sector are at a crisis point and there is a severe lack of trained workers in the cooking field and other foodservice occupations. With an ultimate goal of easing the labor crunch through increasing credential completion, the industry needs to gather input from the global community of hospitality and tourism business entrepreneurs on the developmental program standards and delivery models to ensure the programs are designed to meet the needs of employers and industry at large. 2.3 Increased Involvement of IT: A Greater Need of Skills and Talent It has been reported that the online booking in the hospitality industry (including hotel/motel, airlines, travel packages, etc.) is escalating at a very express speed in recent times, particularly at the lower rate end. (Deegan & Horan, 2003). The percentage of increase in the total annual booking is around 400% every year on a regular basis. As of now, it is the business travelers who make bookings mostly. Then, there are those people who do have a little bit more vacation trips than the average public. Whoever might be the customers the industry needs its own skilled workforce and promotional facilities to provide and accommodate. Realizing the demands of the fast development in the industry ‘now every hotel/motel chain has developed its own website in which bargain hunters can book their hotel rooms online – other than through an Internet travel agency. The hotel industry is certainly full aware of this trend and fully willing to contribute its share in this effort. In fact, the industry has realized that during those early forays into cyberspace, the industry didn’t view e-booking strategically (many hotels simply considered online room bookings at the time as a way to pick up additional business by selling distressed inventory through those online travel agencies), and handed over too much control of inventory and pricing to those third party online travel agencies, and now the industry is in the unenviable position of trying to take back the reins after early shopping patterns have been established. While the pressure to sell their inventory rooms online will be continuing, the industry has developed its new online strategy striving to get a better grip on this emerging marketing channel’ (Yang, Flynn and Anderson 2004).the involvement of labor who has nothing directly to do in the hospitality industry is immense in the above mentioned undertakings of the hospitality industry to day. In all businesses key people need to have training to be aware of their duties and role. The staff must be provided with appropriate information, instruction and training relevant to the hazards they are exposed to and their level of knowledge and skill. This is especially so for: managers and supervisors who have a key role in the running of the process, staff that have to do hazardous work which is new to them, changes to the workplace that could increase the risk of injury, inexperienced and new employees’ health and safety affaires. This can be just considered as the basic training an employee must get other than the specific skills in customer support and service as far as the hospitality industry is concerned. CHAPTER 3 3.1 Restrictions on International Travel Some time earlier, the trend gave many people a feel of ease that international travels have become more available and less expensive. Recently, one is forced to think that in spite of the technological advancements and developments in the transportation facility, the international travel has become tougher in many aspects. In certain cases, it is a matter of acquiring special permission in the form of visas and work permits, but for the majority of us, we could present nominal identification at the border before being welcomed into whatever country we were visiting. However, the events of September 11, 2001 and a number of subsequent terrorism acts had begun a process and a change in cross-border policies, particularly, started in North America, and spread almost all over the world that has had a significant negative impact on the hotel industry (Hotel Line Special Report 2006). The international travel is negatively affected by various factors in recent years. Spread of contagious disease and terrorism has been tow of the main factors that drove the tourism and hospitality industry at large. Below mentioned are some of the most recent issues that affected the travel and tourism industry. 3.2 Swine Flu’s Impact on the Travel Industry Many leading health organizations around the world have announced travel restrictions to many of the affected countries. All non-essential travel to these countries has been advised against and several tour operators to these countries have temporarily been suspended. ‘The tourism industry around the world has been badly hit by swine flu, and not only is airlines and hotels suffering from cancelled trips but many other businesses associated with tourism are also affected, and many public areas and attractions have been completely closed such as theatres, cinemas, museums and art galleries. Business travel is also a big earner for flight companies, hotels and associated businesses, and this has also been badly affected by the outbreak of swine flu. The USA has a tourism industry worth over 770 billion dollars a year, and its close proximity to Mexico has made many tour operators, hotel owners and members of the travel industry very nervous. This is bad news for the US travel industry, which was already suffering from falling profits due to the global recession. USA tour operators will be waiting to see how the swine flu outbreaks pans out, and there are fears that not only will the international visitors be scared away from US resorts, but also domestic travel will slow down and as this accounts for over 90% of the airline industry total revenue this could be a huge blow for the US travel economy’ (Journey etc 2009). These developments clearly underscore the importance of having a comprehensive public information campaign/contingency plan "at the ready" to deal with the expected consequences of the spread of the virus should it appear your destination is likely to be affected (H1N1 and Travel 2009). 3.3 Terrorism’s Impact on Hospitality Industry Air travel remains a large and growing industry. It facilitates economic growth, world trade, international investment and tourism and is therefore central to the globalization taking place in many other industries. The economic importance of tourism is undeniable. ‘For many countries in the developing world, tourism is a critical source of revenue generation and therefore a major component of economic development, a relationship that rewards states when positive conditions such as a strong global economy exist. But the opposite happens when negative conditions such as terrorism exist’ (Essner 2003). Though the assertion that terrorism impacts tourism seems clear, in an information-free society, tourists might travel to destinations regardless of whether a terrorism threat exists or not Via different forms, terrorism generates attention, which, when relayed back to tourists, has an impact on travel plans. Taken as a collective, these decisions affect tourism levels. More than last fifty years the hospitality industry has faced with the realities of terrorism impacting it regularly. ‘On October 1, 1992 when gunmen opened fire on a Nile cruise boat carrying 100 German tourists. Though three Egyptians were hurt and nobody was killed, al- Gama’a al-Islamiya had claimed its first victim weeks later on October 21 when the terrorist group killed a 28 year-old British tourist and wounded two others. Egyptian President Hosni Mubarak responded by issuing special decrees allowing the state to arrest and try civilians in military court a policy that enraged the terrorist group and lead to more attacks. For nearly four years until April 1996, al-Gama’a al- Islamiya “ambushed and attacked buses, Nile cruise boats and passenger trains carrying foreign tourists.”12 Through early 1996, there were at least 30 attacks of this sort, resulting in twelve deaths and several injured. Then again On April 18, 1996 four members of al-Gama’a al-Islamiya opened fire on a group of 150 Greek tourists waiting for a bus at the Europa Hotel in Cairo, killing eighteen people’ (Amnesty International 1998). It remains only one of the many several incidents which literally shattered the countries rapidly growing tourism industry. The U.S. department of State defines terrorism as ―premeditated, politically motivated violence perpetrated against noncombatant targets by sub-national groups or clandestine agents, usually intended to influence an audience. Terrorism affects tourism mostly because they target the tourists for many reasons such as Firstly, tourists are easy to attack. Terrorism requires a great amount of precision, which in turn requires predictability and tourist activities are always scheduled well in advance. Secondly, tourists make better targets than the locals. Because terrorists often reside within the country where the attacks take place and the public is well aware of their presence. Thirdly and perhaps most importantly, the targeting of tourists, particularly international tourists, can generate a great deal of attention, causing tourists to avoid travel to that part of the world. Tourism is indeed an elastic industry in which the consumer may consider several options, which is precisely what the terrorists wish to achieve (Essner 2003). CONCLUSION A close watch on tourism and hospitality industry is crucial in today’s circumstances at large. The issues of tourism industry very closely observed, discussed and dealt with as it is a ‘monopolistically competitive industry. It has many relatively small enterprises producing slightly differentiated products and services. Barriers to entry and exit are relatively low. For these reasons, the tourism industry provides tremendous opportunity for relatively small businesses to thrive and is a leading generator of jobs. Tourism generates jobs directly through hotels, restaurants, nightclubs, taxis, and souvenir sales. Indirectly, jobs are generated through the supply of goods and services required by tourism-related suppliers. For many countries in the developing world, tourism is a critical source of revenue generation and major component of economic development’ (Ramya 2007). References Amnesty International (1998) Egypt-Human right abuse by armed groups; Amnesty International. September 1998 p. 3 Bosworth D. Dutton P. and Lewis J. 1992 Skill shortage; causes and consequences Avebury, Aldershot. Cooper, C., Shepherd, R., & Westlake, J. (1996). Educating the Educators in Tourism: A Manual of Tourism and Hospitality Education. Madrid Spain: World Tourism Organization (WTO). Deegan, M. and Horan, T. (2003), Smith Travel Research, PhoCusWright Inc., Pricewaterhouse Coopers Graphic, Chicago Tribute. Essner J. (2003) Terrorism’s Impact on Tourism: What the Industry May Learn from Egypt’s Struggle with al-Gama’a al-Islamiya. IPS 688 – Security and Development Frogner M. 2002 skill shortages labor market trend. Vol. 111 pp. 17-27. H1N1 and Travel (2009) Will Travel Industry Catch Swine Flu? Oct. 26 2009 http://www.eturbonews.com/12443/will-travel-industry-catch-swine-flu Retrieved on November 28, 2009 HSE Information Sheet 2002 Safe use of cleaning chemical in the hospitality industry. HSE Priced Publications. Jamieson, W. (2003). Poverty Alleviation through Sustainable Tourism Development. New York: United Nations. Journey etc (2009) Swine Flu Travel Advice and Restrictions. http://www.journeyetc.com/travel-news/swine-flus-impact-on-the-travel-industry/ Retrieved on 28 November 2009. Lewis, A. (2006). Stakeholder Informed Tourism Education: Voices from the Caribbean. Journal of Hospitality, Leisure, Sport & Tourism Education, 5(2), 14-24. National skill task force 2000. Skills for all: research report from the national skill task force. Department of education and employment. Ramya (2007) Changing Dynamics of Terorism and Its Impacts on Tourism: Department of History, CJC Richardson S. What is a skill shortage? NCVER Adelaide. Shah C. and Burke G. 2005 Skill shortages Concept, measurement and policy response. Australian bulletin of labor Vol 31 pp. 44-71 Stewart, Nick 2009 Lack of skilled labor, training harming tourism industry: provincial report targets global excellence by 2020: Northern Ontario Business www.tourismstudy.ca retrieved on November 28, 2009. WTO. (2001). Tourism 2020 Vision: Global Forecasts and Profiles of Market Segments. Madrid: World Tourism Organization. WTO. (2007a). Another Record Year for Tourism. UNWTO World Tourism Barometer., 5(1). WTO. (2007b). International Tourism Receipts Reach US$ 735 billion in 2006. UNWTO World Tourism Barometer., 5(2). Yang, Flynn and Anderson (2004) E-Business application in the hospitality industry; A case Study. Communications of the international information management association Volume 3, Issue 1. Zimmermann, W. (2006). Good Governance in Destination Management. In W. Jamieson (Ed.), Community Destination Management in Developing Economies (pp. 113-122). Binghamton: Haworth Press. Read More