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MOD006063 Hospitality Management
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MOD006063 Hospitality Management
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Course Code: MOD006063
University: Anglia Ruskin University
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Country: United Kingdom
Assignment
Venues started life in 1992 when its entrepreneurial founder Sally Wilton, frustrated by the poor quality of training venues decided she could do better – as with so many success stories, life started very simply with a small hard working team inspired to make a difference.
Their first venue, Avonmouth House, was opened in South London and was an instant hit – awards poured in and new venues were opened across London. By 2006 the business had 6 venues, sales of £9m and an impressive client base of public and private organisations.
All entrepreneurs get itchy feet and in June 2006 Sally handed over to Alastair Stewart who, backed by Dunedin Capital Partners, arrived to lead the next stage of the company’s expansion. Millions have been invested in new venues and upgrading and expanding the existing venues, with recent openings focusing more on larger conferences and events with adjacent exhibition space.
They have scooped their fair share of awards over the years, one of their favourites being the PPA awards where the judge’s remarked “…an incredible and varied portfolio of venues expertly tailored to client’s needs, the very professional etc.venues team is an events manager’s dream. This is an innovative business model that is reflected in venues that are really moving with the times. An outstanding winner.” With the strong backing of new investors Growth Capital Partners, they were recently named by the London Stock Exchange as one of the 1000 Companies to Inspire Britain and by Eventbrite’s Pulse Report as the UK’s favourite venue host.They continue to grow hosting 770,000 delegates over the last year with annual sales now over £50m. Their largest venue etc.venues County Hallhas opened across two floors and offers 65,000 sq. ft. of event space, but they are not just opening new venues in London with their first venue in Manchester now open to rave reviews.They are a fast growing challenger brand that loves great customer service, contemporary design, edgy communication and outwitting their larger rivals. However, what they are still really proud of is to have continued their founding principles to do Hospitality and Venue Management Summer 2018 Coursework Brief the simple things well, to put service first, to be green where they can and to be that little bit better than everyone else.
Assignment tasks
As a recently appointed business development manager for etc venues, you are required to prepare a word report regarding the growth options for the business. The report should also outline various future trends and development within the hospitality market.
The report should include the following:
1.An overview of the various sectors within the hospitality industry.2.Opportunities for internationalisation. 3.Management issues within hospitality. 4.HRM and operations. 5.CSR and sustainability issues. 6.Future trends and development within the hospitality market.
Answer:
Introduction
Business structures, as well as peoples’ lifestyles, have been extremely changed due to globalization. As a result, the expanded business operations and peoples’ upgraded lifestyles have increased the disposable income. This has helped in developing the hospitality industry. Additionally, it has also enhanced employability among the different sectors. The hospitality sector is concerned with the relationship between guests and the hosts. This is inclusive of entertainment which takes the form of tours, special relaxation services or even food. The current study aims at exploring the growth options for the hospitality industry. Nonetheless, the report also outlines various future trends and development within the industry.
Effective understanding of the industry’s operations and Human Resource Management, CSR and sustainability issues, future trends, and the opportunities for internationalization will be aided by analyzing a range of skills and information. Specifically, this report aims at understanding the scale, scope, and diversity of the hospitality industry in the UK, as well as analyzing the impact of the sector on the overall growth prospects. These impacts on the growth and the development of the industry increase the number of job opportunities within the overall economy. This report will evaluate the UK hospitality sector thus enhancing knowledge and understanding of the same. Being the newly appointed business development manager for the etc venues, studying the overall industrial operations in the UK will help in analyzing the HRM and operations within the sector, the trends and the opportunities for internationalization among other factors. This report thus seeks the growth options and future trends of the hospitality industry.
Sectors in the Hospitality Industry
This industry is considered to be a bustling sector that consists of myriad categories. However, the unifying factor that is shared by all the segments within the industry is customer service. The different segments within the industry ensure that the needs of the travelers are met in a holistic manner. The industry is made up of an array of sub-industries which include:
First is the lodging-accommodation sector. This sector consists of luxurious hotels, lavish resorts, and campgrounds. The accommodation sector is a broad sector of the industry and ranges from bed and breakfast enterprises and hotels, inclusive of other facilities that offer lodging services (da Silva, Ferreira and da Cruz, 2014, pp.87). In providing accommodation services, customer service is indispensable. Additionally, world-class amenities, efficiency, and integrated comfort are also essential to this sector. The three types of hotel and accommodation services include lodging, suites, and resorts.
Second is the food and beverages sector. Within the hospitality industry, this sector reign supreme, and it ranges from a bistro to a high-end restaurant. Further, the sector is divided into niches. The primary categories of the foodservice sector are quick-service establishments, catering business, and full-service restaurants (Falk, 2016, pp.230). This sector has been greatly enhanced by the demand for food by people when they are on the go. Also, when people visit different countries, they desire to taste local cuisines. Thus, the food and beverages services are essential to the hospitality industry.
The third sector is the travel and tourism sector. Many do view tourism and hospitality to be synonymous and not as a separate sector within hospitality. However, travel and tourism are primary sectors in the hospitality industry, having many crucial players across the world. These players include cruise ships, trains, crew members, and airlines (Harrington, Chathoth, Ottenbacher and Altinay, 2014, pp.803). The primary task of these players is to move people from one destination to the other. Most of the other sectors within the hospitality industry mainly depend on the travel and tourism sector. Deficiency in the profound levels of traveling and tourism in a particular region would result in decreased growth in the hospitality industry in that region.
Fourth is the entertainment sector. Again, the sector is crucial to the industry since it entails hospitality’s most important thing which is the buyers and hospitality services’ recipients. This sector thrives to entertain the buyers. These days, entertainment is a significant part to the people who are traveling (Jones, Hillier and Comfort, 2016, pp.50). A traveling experience that lacks fun and entertainment means that an individual is not capable of enjoying their time up to the fullest. Activities that elevate experience in the entertainment sector are marinas, cruise, sports and gaming, bars, and nightclubs.
The last sector is the timeshare. This is an emerging yet important sector which entails the vacation possession of a particular place. In the scheme, individuals or groups own the rights to a place for specified period in a year (Köseoglu, Topaloglu, Parnell and Lester, 2013, pp.85). Timeshare helps individuals to enjoy facilities either by purchasing part of a facility or even getting into a membership plan.
Opportunities for Internationalization
The hospitality industry by its very nature is considered international. Its demand and the firms that operate within it are international. Analyses of the demand sources indicate that part of hospitality services’ demand is derived from international tourists and the international ventures. As reported by Dunning and Kundu (1995) in their work, the hospitality industry is increasingly becoming internationalized. According to them, there were certain factors that were perceived by parent firms based on the three categories of ownership, location, and the internationalization benefits (Law, Leung, Au and Lee, 2013, pp.16). These factors include: per capita output growth and demand’s high-income elasticity for specific consumer services in the industrialized nations, producer services’ increasing role in the value-added processes, new intermediate markets emergence for services, and the liberalization of markets for many services such as financial and insurance services.
According to Scoviak (2008), changes in demographics are opening up opportunities for franchising in the hospitality industry. For instance, etc Ventures have the opportunity to internationalize its hospitality operations such as the hotel sector in Canada and Mexico, which are considered to be prime markets for franchise sales. Particularly, the company may internationalize into Mexico where a growing middle class is in search for hotels that are branded and having the authentic Mexican flavor (Li, Gray, John and Buhalis, 2013, pp.543). Further, Scoviak in his report also notes that investors have received advice that this is the best time to go international, specifically in Europe and the United States’ growth rates are expected to be flattening. This further offers a great opportunity of internationalization for the etc Ventures.
According to the recent industry reports, India’s economy is booming at a rate of between 7.5% and 8.0% over 2007 and had a growth rate of around 7.5% in 2015 to 2017 as illustrated in the appendices 1 and 2. The report indicates that most multinational firms were moving to India to have a share of the action. This further creates an opportunity for etc Ventures to internationalize to other countries such as India. This report further indicates that should a person desire to book for accommodation either in India or China, they have to book earlier to make sure that the reservation is made and be ready to pay more dollars for accommodation in India (Mariani, Buhalis, Longhi and Vitouladiti, 2014, pp.272). Nonetheless, the enhanced investments in China and India have resulted in the construction of the required infrastructure. The infrastructure includes airports, highway systems, and convention centers to help in accommodating the doubling of tourism. Reports indicate that India needs 100,000 additional hotel rooms. All these present opportunities that can be utilized by etc Ventures to internationalize its operations.
Management Issues within Hospitality
Whatever decisions are made by an organization, effective HRM and efficient personnel activities’ implementation are the primary factors that determine enhanced organizational performance. The HRM policies including the practices are essential in the hospitality industry since they facilitate efficient implementation of the management practices. There are five main business challenges that are faced by the hospitality firms (Martínez, Pérez and Del Bosque, 2014, pp.54). These include technology, globalization, intellectual capital, profitability through growth, and change. As a result, the above challenges provide the HR with the opportunity of playing the leadership role in developing new capabilities to meet these challenges. These challenges present the HR with the responsibility of delivering organizational excellence.
First, there are management issues regarding training. This HRM function’s primary area that ensures effective management and use of human labor. In the hospitality industry, staffs are important but expensive. To sustain economic as well as effective performance, it is necessary to optimize employees’ contribution to the organization’s aims and goals. Training helps in supplying staffs that are technically and socially competent, and who are capable to take up managerial roles (Martínez, Pérez and Rodríguez, 2013, pp.371). This calls for the continued need of developing the employees, which is covered through training. In the current competitive environment, the hospitality industry is experiencing skill development processes that are new in different ways. This is because the customers are concerned with the quality of services being offered. In 2008 the UK government offered a £112m fund to be used for hospitality training. This shows that training is important and an issue in the hospitality industry.
The other issues related to the hospitality industry is customer care. A point to note is that good customer care is dependent on good staff care. Surveys indicate that employees feel happiest at their workplace when they feel that they are valued and important, when knowledgeable of what is happening and when they are involved in daily operations. Due to the increasing customer expectations on quality, customer care becomes of concern (Okumus, 2013, pp.72). This is presenting the industry with a double-edged sword whereby they are also faced with the challenge of finding qualified labor and keeping it. Hence, the HRM in the hospitality industry seeks to get better results by training their existing staffs. As recession looms, service becomes the primary factor for the industry. According to research conducted by Square Meal Restaurant & Bars Resort in the UK in 2009, more than 9,500 diners were surveyed and the results indicated that service was a major concern.
HRM and Operations
Like any other venture and industry, the hospitability industry as well realizes that the staffs are the most essential assets within any organization. Particularly, in the hotel sector, having a workforce that is good, hardworking, and qualified can act as a distinguishing factor between a good and a bad hotel (Perez and del Bosque, 2014, pp.177). The human resource managers are capable of covering almost every aspect within the hotel sector; thus making HRM an integral and essential part of management within the hospitality industry. The HRM is mandated with hiring new staffs who can to a large extent affect the hotel’s performance. Hence, the managers are entitled to hire the best and qualified staffs that are present in the market, by adhering to the necessary hiring process. In the process, every potential candidate is critically evaluated and only the most qualified candidates are hired.
Additionally, the HR manager has the mandate of ensuring that there are most appropriate people to perform a particular task. For instance, in the hotel industry, this is important since most of the employees tend to participate in the daily operations, thinking that there is nothing else to be done. However, the industry requires a staff that is proactive and which can make decisions immediately when the need arises and thus satisfy the customers’ query in time (Rok and Mulej, 2014, pp.351). The HR manager is more strategic regarding handling issues related to the HRM in the hospitality industry. In a critical aspect, in the hospitality industry, the management should be in a position to handle guests coming from across the globe and having different cultures and attributes. Thus, this makes the HR department to possess broader operations in the industry.
Additionally, in the global market regarding the hospitality industry, the Human Resource manager also has the duty of being more strategic when it comes to rewarding and motivating the staff in different ways. For instance, the hotel sector as such as the etc Ventures is in a position to avail the required training for the employees, making it possible for these employees to rise in their career (Ryan, 2015, pp.349). Having the necessary HRM department in the hospitability industry provides the staff with a gateway to accessing the required guidance relating to any of the issues regarding performance or the industry’s daily operation. Nonetheless, this provides a sense of security to the staffs considering that they have a person that can look after them anytime that they commit a mistake.
CSR and Sustainability Issues
The hospitality industry in the UK is a multimillion dollar industry serving millions of individuals from all over the world. According to Price water house Coopers (2006), the hospitality industry forecasts that by the year 2020, the UK will have received 1580million customers. As a result, the UK’s hospitability industry has to put pressure as well as pay attention to sustainability (Sirakaya-Turk, Baloglu and Mercado, 2014, pp.117). As a result, the governments, tourists, and the non-governmental firms have begun changing their perception. These entities have shown their concern about the responsibility that this industry has with respect to enhancing their future outlook. As a result, sectors such as the hotel owners have been forced to express their concern towards nature and society aimed at satisfying the tourists and attract investors (Sydnor, Day and Adler, 2014, pp.52). Due to the ever increasing operational costs in the hospitality industries, one of the crucial issues that the UK’s hospitality industry faces is sustainability. This has resulted in enhanced awareness by the industry towards adopting CSR. A report published by Grant Thornton in 2007, it identified that 94% of the total 350 FTSE firms in the UK published their CSR articles annually. Of the total organizations, 88% have exclusive programs that exhibit CSR.
Within the hospitability industry, CSR is concerned with offering sustainability. As a result, most of the hotels have begun adopting the CSR initiative, aimed at complying with the government regulation while at the same time attracting customers. For instance, some of the initiatives that are adopted by the UK’s hospitality industry with the intention of exhibiting CSR include: first, TUI-TUI is among the leading tour operators globally (Yoo and Bai, 2013, pp.173). They have come up with an efficient system that the hotels in the United Kingdom should adopt if they are to attain sustainability. Second, the International Hotel Environmental Initiative (IHEI) is an established scheme that has been established to manage the environment, which should be adopted by all the UK’s hotels. Currently, an approximate of 11000 hotels have joined the scheme. Further, the standards of environmental practices of the UK’s hospitability industry have been improved by the advice and the publication that was made by the International Hotel Environmental Initiative.
There are several CSR and sustainability issues that are related to the industry. This industry has got several sectors that are run by different individuals. Most of these people in the sectors do not look at this industry as being sustainable. As a result, they reap their short-term profits and later leave the damage to the society hence spoiling the industry’s image to the society. It is important that these firms become responsible for the environment if their intention is to sustain the hospitability industry by conserving resources (Boley and Uysal, 2013, pp.232). In this regard, these companies should be capable of taking care of pollution and the toxic wastes that result from their operations. It is evident that organizations that are adhering to the CSR are thriving in the market since the society is interested in supporting organizations that are continuously doing good things to the society.
Second is the issue of overriding of firms within the hospitality industry which are enhanced by Corporate Social Responsibility. The organization’s name that is portrayed to the public has proven to be an essential asset that is valuable. The brand value is the other thing which has proven for firms to be important (Chawla, 2015, June, pp.140). Considering the aspect of brand and name, CSR has come in place to ensure that organizations make good names for themselves and assists in making the customers to gain trust to a particular firm in the hospitality industry. Also, Corporate Social Responsibility has ensured that the specific firm enhances loyalty from its staff and the shareholders. Most of the hospitality organizations express CSR by contributing to causes that positively improve the society.
Third, the hospitality industry should be able to consider equality when it comes to gender, thus avoiding discrimination within the organization’s setting. As a result, the staff in the industry should be highly trained to make sure that they are able to serve customers well. Corporate Social Responsibility assists by taking care of some of the staff who are directly exposed to discrimination (Kim, Vogt and Knutson, 2015, pp.195). These people include the immigrants as well as the physically incapacitated individuals. This industry deserves individuals who are passionate about working in the hospitality industry. This assists the industry in hiring staff for the fact that despite that the salary is good, the staff has the passion of working for organizations that have the community’s interest by being in a position to assist lower the poverty levels experienced in some countries.
Future Trends and Development within the Hospitability Market
Hospitality industry is estimated to be the third largest growing industry within business economics. This industry has got huge growth and development prospects to help in creating an edge in the global economy. The industry’s development has largely been contributed by the tourism sector. At the global level, the UK has established a well-developed in the global market as the leading tourist destination. Hence, international business operations have effectively aided the segment in enhancing its networks together with growth prospects within the market. The likely future trends and developments within the market are as discussed.
Technological advancements: it is evident that technology plays an essential role in developing businesses across the globe. Hospitality services’ high demand has resulted in technological advancements within ventures to enhance employee efficiency as well as developing consumer engagements within the sector (Schuckert, Liu and Law, 2015, pp.611). The internet, email services, and intranet have taken over traditional technological measures which include pagers among other communication measures within companies. Nonetheless, the internet has assisted the industry to develop and implement creative and innovative ideas that are aimed to boost the industry’s growth and development. Hence, this translates to effectiveness in providing fast and quality services to the customers.
Management and operational trends: due to the changing environment, there has been the emergence of resource requirements and allocation practices. Management’s scope within the hospitality industry has been increased through techno-grants, the collection of information, and government support (Kandampully, Zhang and Bilgihan, 2015, pp.400). The industry is focused on developing a competitive image in the market aimed at setting a benchmark within the economy. Within the market, huge access has been gained by contracting services, individual and franchising entrepreneurs. Currently, the business units aim at managing its business activities in a manner that will help in gaining effective success through the development of quality, speed, and accessibility in the market. For instance, these measures have been adopted by the McDonald’s to help gain global popularity and sales.
Employee retaining practices: the primary resources of any organization are the employees. They assist the business by offering quality and effective services in the market. Additionally, they analyze consumers’ needs and come up with effective measures for meeting the same (Brooker and Joppe, 2013, pp.4). Employee replacement costs are high and may result in losses within the industry. Some of the effective strategies that have assisted business units to gain enhanced efficiency in the business include appropriate motivation sources, continuous learning opportunities, good working environment, opportunities to develop the career, and managing global HR. Thus, the hospitality industry is currently coming up with high and effective measures that will assist in gaining increased customer loyalty and retain employees which will help in managing cost and company’s equality. Additionally, the staff develops the business organizational culture that is considered to be an integral and a unique part of every business. It becomes difficult for competitors to replicate a company’s culture and thus implement them in their own firms. This is helpful to all industries as it assists in gaining a competitive edge in the market.
Conclusion
The aim of the study has been to provide an overview of the hospitality industry, the available opportunities for internationalization, management issues within the industry, CSR and sustainability, HRM operations as well as the trends for development. The world is constantly in motion, full of changes, issues, and opportunities. Within the hospitality industry consumers are changing, the technology is evolving, and markets are also changing. This is the reason as to why the hospitality industry is focusing on becoming more customer-focused, with the aim of developing and improving its performance and encouraging motivation. The current and existing trends drive the industry to success by offering solutions, preparing the sector to face any arising challenges and being an essential prosperity element to assist it to increase its performance
Bibliography
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Brooker, E. and Joppe, M., 2013. Trends in camping and outdoor hospitality—An international review. Journal of Outdoor Recreation and Tourism, 3, pp.1-6.
Chawla, G., 2015, June. Sustainability in hospitality education: A content analysis of the curriculum of British universities. In European conference on research methodology for business and management studies (pp. 136-144).
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Sydnor, S., Day, J. and Adler, H., 2014. Creating Competitive Advantage and Building Capital through Corporate Social Responsibility: An Exploratory Study of Hospitality Industry Practices. Management and Organizational Studies, 1(1), p.52.
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