Contemporary Hospitality Industry: Types of Business, Operational Roles, and PESTEL Analysis

This document provides an overview of the contemporary hospitality industry, including the different types of businesses within the industry and the diverse products and services they offer. It also explores the range of operational and functional departments in a chosen hospitality business and their interrelationships. The document discusses the contribution of the hospitality industry to local, national, and international economies and analyzes the use of franchising and licensing agreements in the global development of the industry. Additionally, it examines the skills required for various operational roles in the industry and the current skills shortages. The document assesses the impact of skills gaps on hospitality businesses and provides valid solutions for addressing these gaps. Furthermore, it assesses the PESTEL factors that affect the development of organizations operating within the hospitality industry and conducts a SWOT analysis to inform the decision-making process.

Contemporary
Hospitality
Industry

Table of Contents
INTRODUCTION ..........................................................................................................................1
TASK 1............................................................................................................................................1
P1 Different types of business within hospitality industry and diverse products and services
they offer................................................................................................................................1
P2 Range of operational and functional departments.............................................................2
P3 Contribution of hospitality industry to local, national and international economies........2
Ml Review the interrelationships of operational and functional units within a chosen
hospitality business.................................................................................................................3
M2 Assess how the use of franchising and licensing agreements has influenced the global
development of the hospitality industry.................................................................................3
Dl Analyse how global growth, franchising and licensing developments have contributed to
the economic worth of the hospitality industry......................................................................3
TASK 2............................................................................................................................................4
P4 Range of different operational roles within hospitality industry.......................................4
P5 Examine skills required for roles within hospitality industry and current skills shortages4
M3 Review the skills gaps within the hospitality industry in relation to a range of different
operational roles.....................................................................................................................5
D2 Analyse the impact that skills gaps have on hospitality businesses and make valid
solutions for addressing these skills gaps...............................................................................5
TASK 3............................................................................................................................................5
P6 Assess PESTEL factors that affect the development of organisations operating within
hospitality industry.................................................................................................................5
P7 SWOT analysis for a hospitality business and review how this can inform decision-making
process....................................................................................................................................6
M4 Evaluate the impacts of external factors on the development of organisations operating
within the hospitality industry, using specific exam pies.......................................................7
TASK 4............................................................................................................................................7
P8 Appraise implications of current and potential trends in hospitality industry providing a
range of specific examples.....................................................................................................7

M5 The ability of a specific hospitality business to develop products and services to meet
current trends..........................................................................................................................8
D3 Critically evaluate how external factors impact on current and potential trends and
developments in the hospitality industry using specific examples to demonstrate how the
industry has developed in response........................................................................................8
CONCLUSION ...............................................................................................................................9
REFRENCES.................................................................................................................................10

INTRODUCTION
Hospitality industry is one of the leading industry which provide variety of services and
products through diverse sectors such as club, restaurant, event planning, theme park, lodging
and many more. It is consider as most profitable business which attract more and more customers
as well as investors. Organization taken for this assignment is Hilton Hotel which is founded by
Conrad Hilton in year 1919. Its headquarter is in McLean, Virginia, United State and they are
operating its business at worldwide level. Here discussed topics are current structure, scope and
size of respective industry as well as it will include anticipated and current skills which are
required for hospitality industry. Along with this it will also include internal and external factors
that will impact on respective industry as well as current issues occurred in industry. It will also
include potential as well as current trends which affect respective industry.
TASK 1
P1 Different types of business within hospitality industry and diverse products and services they
offer
Hospitality industry is one of growing industry now a day and it is determined as
profitable industry. Main objective of this department is to offer effective products and services
to customers in order to satisfy them properly. There are various diverse business which are
operating in respective industry as well as they offer variety products and services, some major
of them are explain below:- Bar and nightclub: In this business organization will provide products and services like
dance, drinks, loud music and many more. Food and beverages:In respect of this products as well as services provide are huge
range of food such as Italian, Mexican, traditional. Along with this they also provide
wide options of drinks like soft drink and so on.
 Accommodation: In this sector company provide accommodation facilities through
various options of rooms like luxury room, executive room and many more. Along with
this they also provide other products and facilities like food, breakfast, bed, swimming
pool and many more.
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P2 Range of operational and functional departments
In Hilton Hotel there are various operational and functional departments who conduct
their their work together for attaining goal and enhancing profitability. Explanation of there
departments are given below:-
Operational Department- The main role and responsibilities of respective department is to
control as well as design process in order to conduct business operation as well as function in
effective way. There are various operational department of Hilton Hotel some of them are
mentioned below:- Front Office- This department directly contact with customers or visitors at respective
hotel. Along with this they also attend telephone call, solve issues of customers, handle
cash and credits and many more.
 Housekeeping- This department will insure that room as well as all area of hotel must be
clean as well as hygiene. Along with this they also take care of all the facilities for the
customers or visitors.
Functional Department- It is a department which will take care of accounting, manufacturing,
marketing of products and hotel, human resource and many more. In Hilton hotel there are
various functional department, some of them are explain below:- Sales and marketing- This department will conduct activities in order to enhance sales
and marketing of respective hotel. For this they conduct various promotional as well as
advertising activities which attract customers.
There department are interrelated to each other in order to ensure that each and every
work conduct at Hilton hotel is done in appropriate way. This will help respective company in
attaining their target in appropriate manner.
P3 Contribution of hospitality industry to local, national and international economies
Hospitality industry is consider as fast growing industry which attract more customers
and investors. The respective industry contributes approx 10 % at the world GDP. This sector is
growing its business and making its presence at worldwide level i.e. local, national and
international. There are various sub sectors of hospitality industry which offer diverse range of
products and services, respective industry generate huge profit through restaurant and hotel
ventures. Through the record it can be analysis that more that 700 millions tourist or visitors visit
various places which generate huge profit (Significance of Hospitality and Tourism in a
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Country’s Economy, 2019). In United Kingdom approx 10 % employment is generated by
hospitality industry. This is possible through opening of various food chains restaurants such as
Burger King, Pizza Hut, McDonald’s, KFC and many more as well as these help in enhancement
in profitability ratio and market shares.
Ml Review the interrelationships of operational and functional units within a chosen hospitality
business
In an organization each and every organization plays an essential role which help them in
attaining target in effective manner. The departments are mainly divided into two manner i.e.
operation departments and functional department. These both department work together in order
to attain organisational goal and objective. Such as for the planning for any activities which is
going to conducted in respective hotel all departments come together in order to make activities
properly. Like finance department manager finance and budget of activities and house keeping as
well as front office help in managing activities. Through collaboration of both department
company able to conduct program in effective manner.
M2 Assess how the use of franchising and licensing agreements has influenced the global
development of the hospitality industry
Franchising and licensing help a firm in expanding their business at international market
in order to increase profitability ratio as well as market shares. Through this companies which
are operating in hospitality industry get opportunities to expand their business functions at world
wide market. In this method company mainly give right to another companies to sales their
products with their brand name. By this they also able to increase their brand popularity.
Dl Analyse how global growth, franchising and licensing developments have contributed to the
economic worth of the hospitality industry
Global growth, franchising and licensing help an organisation to provide contribution in
economic growth. This is possible because when a company expand its business at international
level they able to generate more profitability ratio as well as market shares which help in
improving economic growth. Along with this, by expansion of business company also able to
generate employment at local, national and international level. That will help in improving
standard of living and economic conduction of country.
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TASK 2
P4 Range of different operational roles within hospitality industry
In hospitality industry there are different role and responsibilities which is conducted by
functional departments. Through this staffs able to conduct their work in effective manner that
leads to enhancement in profitability ratio as well as market shares. Form which some major of
them are mentioned below:- Front line Manager: Role and responsibility of respective department is to interact with
customers and convince them to purchase their offering. Such as guest room, food and
beverage, resolve issues, attain visitors and many more. They also conduct coordination
with other staffs for respective work place in order to serve effective services and
products.
 Back Office management: Role played by respective department is to control as well as
maintain all the necessary resources at workplace so that all staffs of various departments
will conduct their work properly. Along with this they also effectively maintain data and
information for their staffs, visitors, shareholders and many more.
P5 Examine skills required for roles within hospitality industry and current skills shortages
An individual required various skills and capabilities when they want to work in
hospitality industry. Through these skills employees able to conduct their work in effective
manner that help in attaining their goal as well as target. Some major skills which are required to
work in Hilton hotel are explain below:- Customer handling skills: Through this skill staffs of Hilton Hotel able to serve their
clients or customers properly that convince them to purchase their services. Through this
employees also able to understand need as well as requirement of customers which help
in providing them appropriate services.
 Team working skills: Through this skill employees able to conduct their work properly
that leads to attainment of target. This will also help them in accomplishing their
activities which leads to attainment of goal as well as target.
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M3 Review the skills gaps within the hospitality industry in relation to a range of different
operational roles
In an organization there are various reasons due to which skills gap arise and sue to
which effectiveness of employees get decreased and this will hamper their profitability ratio and
market shares. There are various skills required to conduct particular work with this hospitality
industry but some time employees get lack behind of some skills this will arise skill gap. Such as
an organisation adopt new and highly technological machines but it is consider as waste because
their employees didn't know how to operate it. Due to this company's profitability ratio and
market shares will get affected because they not able to develop products in more effective
manner.
D2 Analyse the impact that skills gaps have on hospitality businesses and make valid solutions
for addressing these skills gaps
In an organisation when there is arise of skill gap then it will directly and indirectly
impact on their profitability ratio and market shares. Along with this due to skills gap employees
not able to conduct their work properly which impact on production quality. So in order to avoid
it an organization can adopt various strategies such as they train their employees. Through this
staffs able to know how to use particular things and conduct work effectively for accomplishing
work in effective way. Along with this in order to avoid skill gap company may develop team
due to which each and every member conduct their work as well as learn new things by
observing others.
TASK 3
P6 Assess PESTEL factors that affect the development of organisations operating within
hospitality industry
PESTEL Analysis: Political: Hospitality industry plays an essential role in enhancing economy of country
and standard of livings of living in it. The main motive of hotel industry is to attract
customers and expand business at international market. Along with this when there is any
change occur respective industry need to change their strategies and plans. Such as
tourism rate get decrease after attack on Taj and Oberoi Hotel (HOSPITALITY
INDUSTRY PESTEL ANALYSIS, 2019).
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 Economical: There are various factors included in this such as taxation rate, economic
growth, interest rate and many more. So in case of hospitality industry when any change
occur in these factors hotel management has to change their strategies and plans. Along
with this they also need to consider economical factors of other countries in order to run
business at international market. Social: This factor will directly impact on demand of products and services of a firm.
There are various type of peoples visit at hotel and it is necessary for a firm to develop
strategies accordingly in order to attract them in order to fulfil their requirement. Technological: This factor is used by hospitality industry in order to improve the quality
of their offering. Through innovative technology hotel also able to reduce work load of
staffs and conduct work in effective manner in order to attain goal. There are various
technology adopted by hotel industry such as Wi- Fi facilities, innovative products
offering technology and many more. Environmental: Change occur in environment as well as weather directly impact on hotel
industry. Some of major environment factor which affect business of hotel are storm,
heavy rain, flood and many more. During this company face major decline in their
profitability ratio as well as market shares.
 Legal: There are various legal factor which are consider by hotel industry in order to
conduct their business international and national level. By adopting effective legal factor
hotel able to maintain healthy and safe environment for employees as well as customers.
P7 SWOT analysis for a hospitality business and review how this can inform decision-making
process
Strength Weaknesses
 Brand Acknowledgement: The
company is well recognized in the
market. The presence of global
recognition have helped the company in
creating a positive image further leading
to overall growth.
 Solid provider's relationship: Hilton
 Over-dependence: Hilton's major
weakness is that the company
dependence on its US home market and
this situation makes the company
highly vulnerable to market.
 Not a developed network: Hilton does
have enough networks so as to connect
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manages the customer relationship very
well and it records the preferences of
each and every customer.
then with other five-stars inn in Europe
and North America (SWOT analysis of
Hilton Group, 2019).
Opportunities Threat
 Acquire neighbourhood inn: Hilton
can procure the local hotel groups and
increase there overall market share for
the company.
 Rivalry: Competition under hospitality
sector is very hence Hilton faces huge
competition in market.
 Increase pay-scale: Poor
Compensation to the employees leads
to dissatisfaction, therefore Hilton
increases pay-scale regularly.
M4 Evaluate the impacts of external factors on the development of organisations operating
within the hospitality industry, using specific exam pies
External factors refers to those elements which impact on working of a company from
outside and these are not controlled by an organizations. These external factors impact in
positive manner on the development of organization within hospitality industry. This is so
because through this company able to conduct their work in most effective manner that leads to
attainment of goal and objective. Along with this, through it company also able to conduct their
business at international level in proper manner. Such as if an organization wants to expand in
new country then through external analysis they able to evaluate market of respective place
which help in developing decision.
TASK 4
P8 Appraise implications of current and potential trends in hospitality industry providing a range
of specific examples
Hospitality industry adopt variety of latest trends which attract customers as well as help
employees in conducting their work easily. Some of the major current and potential trends which
are adopted by hotel are given below:- Robots: This is one of the most interesting and creative innovation which are adopted by
hotels. These help help them in attracting huge ratio of customers and accomplishing of
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work in more effective way. There are also some companies which install robots in order
to prepare food as well as serve food. Such as Henn-na Hotel at Japan which use robots
as their employees (10 Hotels That Have Robot Employees, 2019).
 Sustainability rules: Now a day there are various hotel which adopt eco friendly
practices at their hotel and they are majorly focus on renewable resources (The Latest
Technology Trends in the Hospitality Industry for 2019, 2019). For which they are
adopting solar panels as well as they also install updated system through which fan, air
conditioner and light automatically get of when service user leave respective place. Such
as Bardessono hotel which adopt 940 solar panel at their rooftop in order to generate
electricity (A Deeper Shade of Green: 10 Hotels Enhancing Sustainability in Creative
Ways, 2019).
M5 The ability of a specific hospitality business to develop products and services to meet current
trends
Hilton hotel is one of the leading as well as famous hotel which is effectively operating
its business at worldwide level. They also try to adopt changes in effective manner in order to
attract customers at huge ratio. Through this they also able to generate more and more
profitability ratio as well as market shares. The respective company have various capabilities
which help them in attaining their goal and adopting new trend such as they have very skilled
and knowledgable employees which adopt changes effectively without hampering their quality
of work. Along with this respective company also have high financial support and effective
research and development department. This will help them in adopting new technology in
appropriate way.
D3 Critically evaluate how external factors impact on current and potential trends and
developments in the hospitality industry using specific examples to demonstrate how the
industry has developed in response
Current and potential trends help an organization in improving their quality of work as
well as it also reduce workload. But these current and potential trends are affected by external
factors such as political, social, technological, economical and many more. These external factor
help an organisation in adopting these trends in effective manner that leads to attainment of goal
properly. Along with this due to this factor company also need to change their strategies and
policies in regular basis which affect working of employees. Such as if Hilton Hotel adopt new
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technology related to booking of room then they need to train their staffs so that they conduct
work properly but this is time taking process which somehow impact on their profitability ratio
and market shares.
CONCLUSION
From above discussed point it can be conclude as well as evaluate that hospitality
industry is one of the leading sector which help in enhancing economy at local, national and
international level. There are various type of business are conducted in respective industry which
offers variety of products as well as services for attracting customers at huge ratio. Along with
this there are various functional and operational department which are interrelated with each
other. There are also various role which are conducted in hospitality industry and there are also
several skills are required within respective sector. Moreover, respective company also conduct
analysis in order to identify its opportunities and it can be done through SWOT as well as
PESTEL method. There are also change is occur in trend of hospitality industry which help them
in attracting customers and gain high profitability.
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performance. Routledge.
Jasper, C.R. and Waldhart, P., 2013. Employer attitudes on hiring employees with disabilities in
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Journal of Contemporary Hospitality Management. 25(4). pp.577-594.
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directions with a special focus on the hospitality industry. International Journal of
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Law, R., Buhalis, D. and Cobanoglu, C., 2014. Progress on information and communication
technologies in hospitality and tourism. International Journal of Contemporary
Hospitality Management. 25(5). pp.727-750.
Legrand, W., Chen, J.S. and Sloan, P., 2013. Sustainability in the Hospitality Industry 2nd Ed:
Principles of Sustainable Operations. Routledge.
Vasquez, D., 2014. Employee retention for economic stabilization: A qualitative
phenomenological study in the hospitality sector. nternational Journal of Management,
Economics and Social Sciences. 3(1). pp.1-17.
Wang, C.J., 2014. Do ethical and sustainable practices matter? Effects of corporate citizenship
on business performance in the hospitality industry. International Journal of
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Wang, Y.F., 2013. Constructing career competency model of hospitality industry employees for
career success. International Journal of Contemporary Hospitality Management. 25(7).
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