The Contemporary Hospitality Industry: Types of Business, Contribution to Economy, and Operational and Functional Departments

This report discusses the types of business operating within the hospitality industry, their products and services, and their contribution to the local, national, and international economy. It also outlines the range of operational and functional departments within the hospitality industry, with insights into the Rosewood Hotel, London. Course code and college/university not mentioned.

THE
CONTEMPORARY
HOSPITALITY
INDUSTRY

Table of Contents
INTRODUCTION....................................................................................................................3
TASK.........................................................................................................................................3
Types of business within hospitality industry and their products and services.....................3
Contribution of hospitality industry to local, national and international economy................5
Range of operational and functional department within hospitality industry........................7
Define a range of different operational roles within the hospitality industry........................9
Skills which are required for roles within hospitality industry and current skills shortage. 11
CONCLUSION.......................................................................................................................12
REFERENCES.......................................................................................................................13

INTRODUCTION
Hospitality industry is the industry which comprises of business and services that are
related to leisure and customer satisfaction. The industry focuses on offering services to their
customers which includes provision of services to tourists and consumers. There are variety
of sectors which operate within the hospitality industry, some of these sectors involves-
accommodation, food and drinks and travel and tourism (Hospitality industry guide, 2021).
Hospitality industry is the industry which offers food and accommodation services though
different mediums such as hotels, resorts, amusement centers and many others. Rosewood
Hotel, London is a 5-star hotel which is a blend of sophistication and heritage. Rosewood
Hotel is a luxury hotel which was designed by H. Percy Monckton in 1912 which was the
transformation of offices to luxury hotel in London (About Us). This report will discuss the
type of business operating within hospitality industry and their diversified range of products
and services offered by the company. The project will outline the contribution of hospitality
industry for local, national and international economy and will also highlight a range if
operational and functional departments which are functioning within the hospitality industry.
The project will also outline the range of operational roles within the hospitality industry and
skills which are required for roles within the hospitality industry.
TASK
Types of business within hospitality industry and their products and services
The business operating within hospitality industry which offers services to their
customers through which they can deliver quality customer experience and meet their
demands. Hospitality industry focuses on meeting customer satisfaction through offering
them leisure services and other services such as- lodging, event planning, travel,
accommodation and many other services (Segments of hospitality industry, 2017). Hospitality
industry has been rapidly growing and companies operating within the industry offers variety
of products and services. Hospitality industry covers variety of goods and services that can be
helpful in meeting customer demands.
The type of business in hospitality industry are classified into five categories, which
are- food and beverages industry, lodging industry, recreation industry, travel and tourism

industry and events industry (What is hospitality industry, 2021). All these types of business
fall under hospitality industry which offers diversified range of products and services.
Source: Created by self
The type of business within hospitality industries are discussed underneath:
Food and beverage business: Food and beverage industry is one of the rapidly
growing industry which offers valuable profit to the overall hospitality industry. the food and
beverage industry offer services through which they can focus on delivering quality customer
and meet customer demands. The business offering food and beverage services in hospitality
industry offer their services at on and off premise locations such as- hotels, restaurant and at
other locations. The business operating in food and beverage business follows a planned and
systematic procedure where they prepare, present and deliver the food to their customers
through which they can meet their demand and level of satisfaction (Ann and Blum, 2020).
The function of food and beverage business is not just limited to deliver food whereas, it also
focuses on. Purchasing the raw material, planning menu, managing daily operations,
following effective strategies and maintain quality and performance standards. The types of
business offering food and beverage services are- restaurants, cafeterias, food manufacturing
operations, catering business, food transportation services and others.
Accommodation/Lodging business: Accommodation and lodging are those services
where business office room building a provide shelter for a person to stay. The type of
Types of
busienss in
hospitality
indutry
Food And
Beverages
Industry
Lodging
Industry
Recreation
Industry
Travel And
Tourism
Industry
Events
Industry

products and services offered by lodging business are hotels, motels and other service where
customer can stay. In case of Rosewoods hotel, the hotel offers accommodation and lodging
services to their customers through which they can offer them quality customer experience.
Recreation business: Recreation entertainment business are those business which
offers people and experience to relax and enjoy and refresh their mind and body. This type of
business operating in the hospitality industry are also called as entertainment business. The
type of recreation business operating within the hospitality industry all amusement parks
museums participatory sports movie theatre and many others (Chon and Zoltan, 2019). The
products and services offered by recreation and entertainment industry are- variety of cultural
entertainment and recreational interest, trekking, bird watching, movies and other
entertaining activities.
Travel and tourism business: The travel and tourism industry offer a combination of
goods and services demanded by tourist during travel and stay at a destination. The services
offered in tourism industry are airline industry car rental services water transport railway
hotels and accommodations and many others. The products and services offered by travel and
tourism industry are- A combination of tangible and intangible elements such as natural
cultural and manmade resources facilities attraction services and activities around the specific
center of interest which represents the core of destination.
Events business: The event management company organize a special event which
can be related to ceremony celebration product launch product presentation workshop
company inauguration or conference. The event business operating within hospitality
industry offers a variety of services such as find event venue caterer entertainment music
transportation and other supplies which are required to organize a successful event.
Contribution of hospitality industry to local, national and international economy
Hospitality industry has been contributing to the economy which has been supporting
in effective economic development at local, national and international level. As per the
reports, the hospitality sector in 2019 has contributed to £59.3 billion in GVA to economy
which was 3% of the economic output for the economy of UK. Moreover, in September 2020
the employment opportunities in hospitality sector was 2.38 million which highlighted the
6.9% of employment within the economy of UK (Hospitality industry in UK, 2021). The
contribution of hospitality industry at different economic level is explained below:

Contribution of hospitality industry to local economy
There are around 10000 hotels in United Kingdom, according to research. The
hospitality industry contributes around £18 billion to the UK economy. The hotels in the
United Kingdom have contributed 18% of the total service industry in the United Kingdom,
including distribution. Since it comes to the indirect financial contribution of the hotel
business, it has contributed around 40% of revenue generation in the local region of the
United Kingdom, in addition to the direct financial contribution (Filimonau and Brown,
2018). According to the British Hospitality Association, the hospitality industry has the
potential to directly employ about 2.5 million people. Additionally, the hotel business has
contributed £ 46 billion to the local economy in the form of wages and profits. In numerous
local governments, the hospitality industry has been a source of employment. In the majority
of situations, hospitality companies have simply hired employees from the local workforce.
Contribution of hospitality industry to national economy
In the year 2015, it was estimated that Europe received roughly 479 million
international tourists. It has been considered the world's most popular tourist attraction. In
addition, the United Kingdom's domestic tourist receipts in 2015 totaled 337 million Euros.
The hospitality industry is perceived as a significant contributor to the European economy as
well as European tourism. The hotel industry has made a direct contribution to the European
economy, both in terms of revenue and job prospects. The hospitality industry is the third
largest socio-economic activity in the European economy, behind tourism and agriculture.
According to the findings of the study, the tourist industry of Europe accounts for one
out of every 10 non-financial businesses in Europe. The hotel industry accounts for over 80%
of the employment opportunities in the European Union's tourism workforce. There are about
1.9 million businesses in Europe, with 90 percent of them being micro businesses with fewer
than ten employees (Horng and et.al, 2018). The hotel industry is directly responsible for
about 11 million job possibilities, accounting for nearly 5% of total employment in the
European Union. On an annual basis, hotels, restaurants, and bars employed around 3% more
people in the first decade of the millennium than they did the previous decade. As a result, it
employs almost 2.5 million people through work opportunities.

Contribution of hospitality industry to international economy
The hospitality industry has created employment opportunities in both direct and
indirect ways across numerous worldwide countries. The direct impact is defined as the
creation and performance of jobs and related activities in the hospitality sector, whereas the
indirect impact is defined as the purchase of products and services from UK suppliers. Food,
beverages, agriculture, and different commercial services are among them. The hospitality
industry has made a significant contribution to foreign economies through employment,
taxation, exports, and investments (Miao, Humphrey and Qian, 2021). The hotel industry
provides temporary and seasonal employment opportunities, while taxation covers revenue
sources created by the respective government. The term "investments" refers to capital
expenditures, whereas "exports" refers to foreign or international exporters' accounts. The
contribution of the hospitality industry to foreign economies has also been through induced
consequences. According to the induced impacts, employees and related activities in the hotel
business, as well as its direct supply chain, spend a portion of their earnings on consumer
products and services. It eventually leads to an increase in economic activity in retail and
leisure outlets, as well as in numerous supply chains.
Range of operational and functional department within hospitality industry
Hospitality industry involves variety of operational and function departments within
their organizations. The operational department focuses on the production process from start
to the end whereas the functional department of business involves strategy marketing finance
human resource technology equipment (Operational and functional department within
hospitality industry, 2019). In context of the Rosewood Hotel, the diversified range of
operational and functional department operating within the hospitality industry are discussed
below:
Operational Department in hospitality industry
 Food and beverage department: This operational department of hospitality industry
focuses on offering quality services in order to satisfy customer needs and ensure high
quality food and beverage option are offered and served to customers. In case of

Rosewood Hotel, this department of hotel provides professional, hygienic and attentive
services through which they can retain higher number of their customers and create
positive impact on the value for money.
 Housekeeping department: This operational department of hospitality industry manages
the cleanliness, public area, back area of the place and the surrounding of the hotel (Role
of housekeeping, 2016). The housekeeping department of Rosewood Hotel ensures that
customers can get clean and desirable place and room through which they can meet their
demand and increase business profitability. This department is responsible to maintain
safety, sanitization, comfort and aesthetics for hotel guest.
 Front office department: This department of the hospitality industry represents the
business and is responsible for creating interaction and communication with customers.
Sales, receptions, advisory services, customer services are some of the types of front
office departments within a business operating within hospitality industry. The primary
function of this department is to manage reservations (Front office, 2021). In case of
Rosewood Hotel, Guest services, check-in, check-out, room assignment and inquiry are
some of the operations of front-office department.
Functional Department in hospitality industry
 Marketing department: The marketing department within the hospitality industry focuses
on developing programs to maximize revenues, increase occupancy and get insight of
better understanding of customer demands and preferences. The marketing department
within the hospitality industry performs various activities, such as- research, increases
awareness, promotes the products and services offered by the company and supports in
building strong customer relationship (Importance of marketing in hospitality industry,
2016). In case of Rosewood Hotel, this functional department within the hospitality
industry needs to work towards increasing brand awareness through creating attractive
advertisements and campaigns.
 Finance department: The finance department within the hospitality industry plays a
crucial role as this department track the cost of running the hotel and focuses on making
business profitable. This department analyses the variables which can be more profitable
and valuable for the company. The finance department is responsible for creating a
foundation of a successful business which helps the business in managing their finances
and in making business profitable and successful (Financial management in hospitality
industry, 2012). In case of Rosewood Hotel, the finance department of the hotel is

responsible for creating an annual budget, create detailed financial tracking model,
perform audits and create structure of all P&L.
 HR department: Human resource department within the hospitality industry plays an
essential role in the business and directs the administrative functions of the business. In
case of Rosewood Hotel, the human resource department performs their functions, which
are- recruitment, benefits and compensation and training and development (HR
management in hospitality industry, 2021). The human resource department builds a
pathway to success by recruiting talented personnel, through offering them required
training and development, effective planning, managing compensation and benefits and
through appraising and recognizing employee performance through which they can
motivate and retain greater number of employees which will support in better brand
image.
 Purchase department: The purchase/procurement department within the hospitality
industry supports in managing the finances and supports in strengthening financial
opposition of the company. This department ensures that business is following all ethical
standards and are maintaining integrity (Purchasing department, 2020). In case of
Rosewood Hotel, the purchase department of the hotel plans procurement policies and
procedures, understand network technology equipment’s. the purchase department of the
hotel monitors internal and external supply markets though which they can ensure quality
goods and services to keep smooth cash flow and business profitability.
Define a range of different operational roles within the hospitality industry
The hospitality industry has been rapidly growing is highly diversified where multiple
roles are required to be performed through which business can maintain their competitive
position within the hospitality industry.
There are ample of operational roles which need to be performed within the
hospitality industry which can define the roles from entry-level to managerial level
opportunities within the industry (Hospitality career, 2021). The operational roles within the
hospitality industry can be classified into 6 categories which are- finance, front office, HR,
food and beverage, sales and logistics.

Source: Organizational chart for hotel, 2021
In case of the Rosewood Hotel, some of the operational roles within the industry are
addressed underneath:
 Front desk agent- In case Rosewood Hotel, the front office agent or receptionist is
responsible for greeting guest, taking people calls, resolving client queries, ordering
office supplies, maintain organized reception area, updating records and files, maintaining
records and others.
 Concierge- The function of concierge is to interact with customers and is an executive
level job role within the hospitality industry. In case of Rosewood Hotel, as a concierge
the person will assist guests, patrons and will look after making dinner, managing
reservations, look after property and arrange transportation.
 HR Manager- In terms of Rosewood Hotel, the HR Manager of the hotel is responsible
for recruiting and training new candidates, manage employee data, monitor performance
standards, design workplace policies, maintain working culture, resolve conflicts and
ensure heath and safety standards for employees.
 Waiter- In context of Rosewood Hotel, a waiter is responsible to deliver food to their
guest without getting it cold (Hospitality roles, 2017). The functional role as a waiter also
requires them to interact with customers through which they can understand customer
demand and meet customers level of satisfaction.
 Housekeeping- In context of Rosewood Hotel, the housekeeping department is
responsible to clean the room mid-stay and after departure, making bed, replacing dirty

linens and towels, restocking notepads, toiletries, other amenities, offering room services,
remove garbage and other services.
Skills which are required for roles within hospitality industry and current skills shortage
Hospitality industry is quickly expanding and required different skills for different job
roles. There are wide variety of job role within hospitality sector, some of these includes: tour
operator, hotel manager, PR Manager and others. In order to become successful within the
dynamic hospitality industry, a person must strengthen the required skill set to perform the
assigned job roles and responsibilities. In terms of Rosewood Hotel, some of the skills which
are required within the hospitality industry are explained below:
 Customer service skills- In case of Rosewood Hotel, an excellent customer service skill
is imperative for this domain (Skills required for hospitality management, 2021). Such
skills help in delivering positive customer service experience through understanding and
beating customer demands.
 Multitasking skills- In terms of Rosewood Hotel, the candidate must be able to handle
multiple responsibilities and situations smoothly and simultaneously (Skills to succeed in
hospitality career, 2016). It is essential that a candidate must be able to manage things
and ensure that things are under control through multitasking which will help them in
handling fast pace working scenario and complex work responsibilities at the hotel.
 Communication skills- In context of Rosewood Hotel, communication skills are most
essential skills which will be helpful in understanding customer demands and preferences,
ensuring open communication in workplace of the hotel through which the hotel can
make progress and meet their desired organizational objectives.
 Problem solving skills- In context of Rosewood Hotel, it is essential that a candidate
must be able to find feasible solution to the problem (Essential soft skills for career in
hospitality industry, 2021). The problem-solving abilities to identifying the issue and
evaluating strategies which can be helpful in resolving the concerns can support the hotel
in improving their performance and brand image in the industry.
Current skills shortage
There are various reasons for the global skills shortage in the hotel business. Fewer
young people joining the workforce, low-paying jobs, anti-social working hours, political
unrest, an increase in restaurant vacancies, and misconceptions are just a few of the causes

contributing to the skills shortage (Current skill shortage in hospitality industry, 2019). The
political climate has a considerable influence on the skills gap. According to a survey, 1 in
every 10 restaurant, hotel, and other food workers planned to leave the UK due to Brexit
uncertainty.
CONCLUSION
From the above project report, it can be summarized that hospitality industry has been
facing incline in their market position through which they can support in effective economic
development. The hospitality industry is based on various companies which offers diversified
range of products and services. The hospitality industry focuses in meeting the customer
demands through offering services such as catering, food, technological and many other
services. There are variety of operational and functional roles which are performed by
business in order to enhance business efficiency and to enhance business growth and
profitability. In order to enhance the effectiveness and efficiency of business operating in
hospitality industry there are variety of strategies which can be helpful in enhancing the
company services. The activities within a hospitality industry is performed by operational and
function departments which supports in performing up to the required standards and in
meeting customer demand and level of satisfaction.

REFERENCES
Books and journals
Ann, S. and Blum, S. C., 2020. Motivating senior employees in the hospitality
industry. International Journal of Contemporary Hospitality Management.
Chon, K. K. S. and Zoltan, J., 2019. Role of servant leadership in contemporary
hospitality. International Journal of Contemporary Hospitality Management.
Filimonau, V. and Brown, L., 2018. ‘Last hospitality’as an overlooked dimension in
contemporary hospitality theory and practice. International Journal of Hospitality
Management. 74. pp.67-74.
Horng, J. S and et.al., 2018. Developing a sustainable service innovation framework for the
hospitality industry. International Journal of Contemporary Hospitality Management.
Miao, C., Humphrey, R. H. and Qian, S., 2021. Emotional intelligence and job performance
in the hospitality industry: a meta-analytic review. International Journal of
Contemporary Hospitality Management.
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