Current Issues in the Accommodation Sector - Desklib

This article discusses the current issues in the accommodation sector, including the ever-changing needs of customers, lack of security policies, and ineffective marketing strategies. It also explores the impact of technological innovation and competition from companies like Airbnb. The article concludes with recommendations for the industry to adopt strategic planning and training to upgrade the skills and knowledge of employees.

Running head: HOTEL AND ACCOMODATION MANAGEMENT
Current issues in the accommodation sector
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HOTEL AND ACCOMODATION MANAGEMENT
Table of contents
Industry overview.......................................................................................................................2
Analysis of the identified issue..................................................................................................3
Conclusion..................................................................................................................................6
Recommendations......................................................................................................................6
References..................................................................................................................................7

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Industry overview
Accommodation sector includes hotels, motels and commercial accomodations like
backpackers, hostels among others. Other examples of the accommodation sector involves
beds and breakfasts, lodges, resorts. The accommodation sector of Australia have emerged
strong due to the increased demands of the rooms in case of the visitors. The data has
recorded high occupancies by the end of 2018. Mention can be made of the cities of Hobart,
Sydney, Melbourne, The Gold Coast and Cairns, which have produced 80%, which have
escalated the revenue per available room (RevPAR) (Australia.com 2018).
Figure 1: Revenue per available room of the Australian cities.
(Source: Australia.com 2018)
Mention can be made of Airbnb, which has revolutionized the accommodation sector.
As a matter of specification, the customers now do not have to depend on the property
owners for finding prospective accommodation facilities (Airbnb.com.au 2018).

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Analysis of the identified issue
One of the major issues in the accommodation sector is the ever changing needs of
the customers. Due to the advancement of technology, people are now tech savvy. This
adversely affects the business of the hotels and the service providers like Airbnb with the
absence of security policies and cookies. This absence contradicts the aspect of culture and
ethics, which the customers seek culture within the hotels. This situation aggravates the
complexities of the hotel staffs in order to understand the specific tastes and preferences of
the customers. In terms of the demands for rooms, the customers seek to incorporate value for
money (Nieves and Segarra 2015). Providing quality services to the customers enhances their
experience, which helps them in forming a particular perception regarding the
accommodation facilities. Negligence towards maintaining the quality of the rooms compels
the staffs to receive complaints from the customers. This includes dirty bed sheets, pillows,
which creates a negative image about the hotel in the minds of the customers (Razli, Jamal
and Zahari 2017). Upon uploading the details of the room preference, if they are not secured,
fraudulent cases occur in terms of leakages and cybercrimes, degrading the reputation of the
hotel.
The increasing competition makes it difficult for the hotel staffs to fulfil the needs,
demands and requirements of the clients and the customers. This degrades the reputation of
the hotels. Reference can be cited of the competition from Airbnb. The valuation of Airbnb
has been recorded as over $10 billion, which is higher than the revenue of the larger hotels
like Hyatt. In this competition, there are tendencies for threat of substitutes, which results in
customer turnover. Limited service properties in market share and tourism provides Airbnb
competitive advantage over the hotels. However, recently it has been seen that tourists prefer
the services of the hotels (Xie et al. 2014). This is in terms of Airbnb’s failure to provide the
much needed luxury and security to the customers. Moreover, increase in the number of apps

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have added vulnerability into the services of Airbnb (Smh.com.au 2018). Security within
these apps is a weakness for the hotels, compelling the staffs to lose customers.
Improper and ineffective marketing strategies is a related issue, aggravating the
complexities of the hotels staffs to provide luxurious accommodation. Many hotels have
failed to acquire effective and efficient technologies (Bbc.com 2018). Herein lays the
importance of incorporating security within the apps, which most of the Australian hotels fail
to adopt. This is one of the points, which adds vulnerability to the market position of most of
the hotels in the threshold of Australia. As compared to the hotels, other sectors of the
hospitality industry are technologically advanced, which results in the achievement of large
scale customer satisfaction. Incapability of incorporating technology within the operations
has declined the number of customers. Herein lays the inappropriate approach towards
exploring the flexible marketing strategies (Mason 2015).
Operational costs is one of the other issues, affecting the business of the
accommodation sector. Penalty rates, labor maintenance and GST obligations aggravate the
complexities of the hotel staffs to provide quality room service to the customers. Penalty
issues still prevail in the current scenario. 71% of the hotels have experienced penalties,
which have hampered the business. 46% of the hotels have encountered tax and GST
compliances, affecting the business of 48% of the hotels under accommodation sector
(Australia.com 2018). Some of the hotels have experienced the challenge of maintaining the
balance between operational costs and profit margin. This has adversely affected the
purchasing power of the customers belonging to the middle class yet intending to avail high
class accommodation facilities for their vacation. Absence of security in the operational costs
creates instabilities in the financial parameter. Market research would enhance the awareness
regarding the latest software cookies and policies, which would prove beneficial in
maintaining the privacy of the private and confidential information of the customers.

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Figure: Customer switch over into Airbnb
(Source: Airbnb.com.au 2018)
The above figure represents the customer switch over into Airbnb. Numerically, 42%
of the customers are the leisure users, who have turned into the Airbnb services in the last 12
months. Introduction of social media enabled the critics to estimate that 47% of the customers
would switch over to the services of Airbnb. Typical evidence of this lies in the apps, through
which the customers can make online bookings (Airbnb.com.au 2018). The figure depicts the
incapability of the hotel staffs to provide security within the apps. This has resulted in the
drastic decline in the number of customers, adversely affecting the productivity.

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Conclusion
Accomodation facilities caters to the needs of “shelter” for the customers during the
tenure of vacation. Quality issues decline the number of customers, giving competitive
advantage to the companies like Airbnb to achieve large scale customer satisfaction. Lack of
training is the main reason behind luring the customers. Incapability to cater to the specific
tastes and demands of the clients and the customers adds vulnerability into the market
position of the companies under accommodation section. Technological innovation possesses
the flexibility to alter the business of the hotels, resorts and the other companies dealing with
the accommodation facilities.
Recommendations
Accommodation sector needs to adopt strategic planning for systematizing the
business activities. Uploading the image of the newly furnished rooms on the social
networking sites would enable the staffs to gain an insight into the approach of the customers.
After gaining the approach of the customers, surveys and feedback process need to be
adopted for detecting the modifications, which needs to be made in the levied services.
Herein lays the appropriateness of evaluation, within which training is needed for upgrading
the preconceived skills, expertise and knowledge of the employees.

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References
References
Abc.net.au (2018). Meriton fined $ million for interfering with negative TripAdvisor reviews.
Available at: http://www.abc.net.au/news/2018-07-31/accc-trips-up-meriton-over-fake-
reviews/10055618 [Accessed on 13th August 2018]
Airbnb.com.au (2018), About us, Available at: https://www.airbnb.com.au/ [Accessed on 12th
August 2018]
Bbc.com (2018). Hotel, restaurants and tourism may face staff shortage. Available at:
https://www.bbc.com/news/business-39448424 [Accessed on 13th August 2018]
Bbc.com (2018). Lock out: The Australian hotel that was hacked four times. Available at:
https://www.bbc.com/news/business-42352326 [Accessed on 13th August 2018]
Cheer, J.M. and Lew, A.A. eds., 2017. Tourism, resilience and sustainability: Adapting to
social, political and economic change. Routledge.
Masiero, L., Nicolau, J.L. and Law, R., 2015. A demand-driven analysis of tourist
accommodation price: A quantile regression of room bookings. International Journal of
Hospitality Management, 50, pp.1-8.
Mason, P., 2015. Tourism impacts, planning and management. Routledge.
McCool, S.F. and Bosak, K. eds., 2016. Reframing sustainable tourism. Berlin: Springer.

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Molina-Azorín, J.F., Tarí, J.J., Pereira-Moliner, J., López-Gamero, M.D. and Pertusa-Ortega,
E.M., 2015. The effects of quality and environmental management on competitive advantage:
A mixed methods study in the hotel industry. Tourism Management, 50, pp.41-54.
Razli, I.A., Jamal, S.A. and Zahari, M.S.M., 2017. Perceived value in peer-to-peer (P2P)
accommodation: A case of Airbnb. Journal of Tourism, Hospitality & Culinary Arts, 9(2),
pp.213-224.
Smh.com.au (2018). Hotel sector preparing for a shake up. Available at:
https://www.smh.com.au/business/companies/hotel-sector-preparing-for-a-shakeup-
20171012-gyzo54.html
Xie, K.L., Zhang, Z. and Zhang, Z., 2014. The business value of online consumer reviews
and management response to hotel performance. International Journal of Hospitality
Management, 43, pp.1-12.