Managerial Challenges in Hospitality Sector

This document discusses the managerial challenges faced by the Family Cafe in London in the hospitality sector. It explores the causes and effects of these challenges, such as difficulty in recruitment and retention of skilled employees and absenteeism. The document also proposes actions to deal with these challenges, including conducting internal analysis and addressing compensation and benefits issues. The aim is to provide insights and solutions for the management of the Family Cafe to improve their operations and overcome these challenges.

Consultancy Project for
Hospitality Management

Table of Contents
INTRODUCTION...............................................................................................................1
LO 1...................................................................................................................................1
Managerial Challenges within Hospitality Sector...........................................................1
LO 2...................................................................................................................................5
Management Theory and Industry specific Managerial Problems and issues..............5
LO 3...................................................................................................................................8
Decisions and proposed actions to deal with Managerial Problems.............................8
LO4..................................................................................................................................12
Professional Competencies.........................................................................................12
LO5..................................................................................................................................15
Strategic Plan...............................................................................................................15
CONCLUSION...................................................................................................................1
REFERENCES..................................................................................................................2

INTRODUCTION
Hospitality management is basically a major function of the hospitality industry or
sector. To perfectly manage a hotel, the manger need all knowledge about hospitality
management. Many universities and colleges are providing specific courses also for
hospitality management and hotel management. People which have interest to make
career in the hospitality industry, then need to first complete their hospitality
management degree and diploma. From all top hotels to the small restaurant, these all
businesses are comes under the hospitality industry. Proper knowledge of the
hospitality management is very necessary for the hotels, travel and tourism, cafeterias,
restaurants businesses to perfectly run their business activities in the market.
Many of the successful hotels in the world are always giving lots of training
sessions to their employees to aware them about latest and modern techniques in the
hospitality industry. It includes administrative tasks, like; make hotel warm, familiar,
welcoming, safe, and caring for the customers. The hospitality management is too much
important in provide best of the best services to the customers. With the help this, many
hotel businesses currently built their big hotel empire in all over the world. These are
discusses the hospitality management of the Family Cafe, London. Currently this cafe
facing some managerial challenges in their daily operations.
LO 1
Managerial Challenges within Hospitality Sector
Challenges that are being faced by Family Cafe, London are difficulty in recruitment and
retention of skilled employees and absenteeism of employees (D’Annunzio-Green,
2018). This is the main problem of Family Cafe, London. This challenge and problem
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have been caused by various issues and direct effect of these managerial challenges is
visible from increasing operating cost and shortage of labour.
These problems were carefully analysed and causes behind these challenges were
identified to be,
Compensation and Benefits- Most important reason that encourage individual to work
and work for someone else is compensation and benefits that they get. This is why
these are required to be adequate. Family Cafe, London is facing problem of high
employee turnover as it is not able to provide adequate compensation and benefits.
This also reduce motivation of the employees that they are not being paid which is
worth their efforts.
Training- Training is another important cause for employee turnover. Employees when
lack training it becomes difficult for them to perform their work effectively. This also
create task and job ambiguity. This affect job satisfaction of employees and reduce their
motivation as they do not understand clearly what they are required to do. Training
equip employees with right kind of knowledge and skills for their work result in
increasing their efficiency. Inadequate training lead to increase in cost and decrease
efficiency of Family Cafe, London.
Image of the Industry- this is an important factor that attract qualified and skilled
employees to work in a organisation. Effective employees do not prefer to work in a
organisation whose image is not god or bad. There are various actors that affect image
of an organisation these factors are, culture of an organisation, compensation and
benefits of organisation, development of employees in an organisation (Lederer, Van
Niekerk and Okumus, 2017). All these factors affect image of an organisation and when
2

these factors are negative and not as good as they should be, restrain competent
employees and candidates to apply and work in a organisation. Effect of these factors is
that company faces difficulty in hiring competent employees who can add value to the
company. This also encourage and instigate current employees to leave the Family
Cafe, London.
Long Working Hours- This is another cause that creates challenge for manager at
Family Cafe, London. Long working hours affect work life balance of the employees and
create dissatisfaction from and also demotivate employees. This is a reason that
employees leave the organisation after a short time of joining, this increase employee
turnover and increase cost of the company as well. This problem when analysed
thoroughly suggest that cause behind this long working hours is lack of employees or
shortage of workers. It seems that both the problems causes behind each other.
Hard Work and Average Pay- This is a major reason and also an valid reason that
created challenges for managers. Employees work hard and then paid average is not
an ideal situation. Family Cafe, London definitely needs to pay their workers according
to their hard work so it does not build frustration and dissatisfaction from job for the
employees. In such cases this is very obvious that employees leave the organisation
(Martin-Rios and Ciobanu, 2019). This not just create dissatisfaction but also develop
feelings in employees that they are not being valued in the company and are treated as
resources rather than assets.
Organisational Culture- The tendency of organisation that includes inadequate
training, less pay and high employee turnover affect culture of an organisation. Though
culture is made up of values and beliefs and policies that management but employees
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are major factor that affect culture of an organisation. The manner in which employees
leave organisation creates instability in culture of organisation. This affect mindset of
those who are working their and image of the organisation. Organisation culture is an
important factor that affect performance of employees and their perception about the
organisation. Healthy and effective culture of the organisation attracts employees who
are competent and contribute in retention of current employees of the organisation.
These are the various causes along with their effect for managerial challenges.
Effects of the challenges can be separately identifies which are as follows-
High Employee Turnover- various challenges that have been caused by less pay, hard
work, long working hours and inadequate training. Effect of all these causes is that
employee turn over of the company have increased to a very high rate. All this causes
and their effect is managerial challenges at Family Cafe, London.
Reduced Motivation- A situation that employees are required to work hard for long
hours, and then they are not paid which is worth their efforts and hard work. This
situation clearly indicates that reduction in motivation of employees is not unnatural or
something unexpected.
Increased Competition- This is an outside force and what company can do about is to
prepare itself to compete with competitors. In case of Family Cafe, London. To compete
in market most important resource and factor is employees and human capital of the
company (Tan and et.al., 2016). Family Cafe, London which is facing issues like
recruitment of competent employees and their retention. This may decrease its capacity
to stand aside and stay ahead in competition. This challenge has been caused because
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Family Cafe London does not give adequate remuneration and benefits to its
employees and their motivation is also low.
Managerial challenges at Family Cafe, London have been caused by many issues and
their effect are challenges that management is facing.
LO 2
Management Theory and Industry specific Managerial Problems and issues
There are various problems that are being faced by management of the Family Cafe,
London. These problems are managerial problems that is why some management
theories are being analysed here which are-
Scientific Management Theory- Proposed by F.W. Tailor this theory focuses on
improving economic efficiency and labour productivity. Tailor considered that this is
possible to increase productivity of labour and utilizing their best potential by providing
them monetary rewards and adequate remuneration (Khandelwal and Shekhawat,
2018). Money is the only thing that motivate people at work. In context of Family Cafe,
London this seems to be right that employees and workers are frequently leaving
organisation as they are not being paid adequately. This is why Cafe need to pay
workers an adequate compensation and give then proper benefits so that they can
remain motivated and do not leave cafe frequently.
Administrative Management Theory- This theory of management stress efficiency of
management which comes to lower level employees. To guide management and
increase their efficiency Henry Fayol developed principle that management can adopt
for effective results. This principle suggests that work should be divided it reduces work
load and employees should be assigned task according to their specific knowledge and
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qualities. Management of Family Cafe, London should focus on this principle and
ensure that workers are not over burdened with work so that they finally leave the
organisation. In this concern management is also required to hire more employees and
reduce employee shortage and employees hired should be competent and then
properly motivated so that they do not leave the organisation.
Behavioural Management Theory- This theory focuses on human relations. This
theory suggests that workers can be more productive if they feel that they are important
to organisation. This is possible be effective human relations. In Cafe workers are not
motivated and they are made to feel like resources as they are being paid less and
need to work hard (Hee and et.al., 2018). This approach is based on utilization of
resources like land and machinery but does not work with humans specially in modern
time.
Employees at also demotivate at Family Cafe, London. This suggests that Maslow'
hierarchy theory in Management should also be considered and followed by the
management of cafe to motivate its employees. This is most suitable theory in context
of cafe problem.
Family Cafe London is facing major challenges that impact its performance and
management of the cafe is required to and supposed to deal with these challenges. So,
complex managerial problems and issues that are faced in hospitality industry are as
follows-
Competition- Increased competition is major and most complex problem faced by
management of a cafe and hospitality industry (Tang and et.al., 2018). Managers have
to ensure that existence of other firm in similar industry does not affect profits and
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revenue of cafe. To ensure this management is required to employ efficient manpower
so that they can deal with challenges that competition present in front of them. In Family
Cafe, London problems related with retention and recruitment of competent manpower
make the problem more complex.
Retention of Employees- Most complex problem that is being faced by management is
retention of employees. Employees' retention in Family Cafe, London is not more than 5
months. This retention is very less and this is continuously increasing turnover of
employees that is causing shortage of manpower and increasing operating expenses as
well (Partington, 2016). Employee turnover is being increased by various reason like
inadequate compensation, training and long working hours.
Motivation of Employees- Motivation of employees is another complex problem of
management. Motivation of employees is an important contributor of employees'
performance. This is also important reason employees retain themselves in company,
this makes it very important that employees stay in cafe. Without motivation employees
will neither perform, nor they will stay in company. This is why is important issue and
major concern for management that employees remain motivated.
Building and maintaining Positive Image- This is another major managerial problem
and management of company. They are required to build and maintain positive image of
the cafe and this is a major factor that affect when cafe intends to hire competent
employees. Competent employees are interested in working prestigious organisation
and that is why good image of the company is most important. This is also important to
increase customers and profit of the company (Fallström, Hermans and Lindholm,
7

2018). There are various things other than product and price policy of the company that
help in building image of cafe and these can also ruin the image of the company.
Customer Satisfaction- Management of the organisation have to ensure that
customers of their company are satisfied and for that they are responsible to train their
employees in such manner that they can contribute to customer satisfaction by
providing the best product and services. Cafe which is having problem of retention of
employees and hiring of competent employees and reason for that have been identified
as inadequate training. This inadequate training helps in increasing customer
satisfaction.
Compensation Management- This is also a complex problem that management have
to deal with. Compensation management is aimed at maintaining compensation level
that employees do not feel is less than what they are doing for company and companies
do not feel is higher than what employees are doing for the company (Mohammed,
2019). Management of Compensation at Family Cafe, London is not good and causing
dissatisfaction to employees regarding their compensation.
These all are complex and specific problems that management of the cafe have to deal
with and in cafe specific these are major issues and challenges for management. What
are decisions that have been taken in these regards are being discussed below in this
report along with outcomes of these decisions.
LO 3
Decisions and proposed actions to deal with Managerial Problems
To solve the problems related to employee retentions and recruitment of employees
decisions that have been taken are as follows-
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To Retain Employees- To retain employees which is one the major problem being
faced by management of Family Cafe, London. The initiatives taken for this is to
conduct internal analysis. This is an important step and this will allow identifying reason
and cause of employee turnover (Jennings, 2019). Internal analysis will contribute in
understand thoroughly impact of various reasons on employees which causes turnover
of employees. This will enable management to know what is the problem that requires
more attention than other. Actions taken for this is that employees will be invited for a
face to face interview to share their issues and open up about the problems that they
are facing in the organisation and that affect their motivation and encourage employees
to leave organisation. This action will help to understand from the point of view of the
employees and management will be able to take decision that are suitable for
employees rather than making decisions that are suitable and beneficial for organisation
but affect employees negatively. Solutions will be more relevant for employees and their
well being will be first and important element of the solutions designed for them and less
for organisational benefits. These initiatives and decisions seem to be very effective and
successful from the above but when these are tested on the basis of reality these seem
to be less effective. Reason behind this is that it is easy to say that employees will be
invited for a face to face interview to share their issues and open up about their
problems in organisation. But this is not an effective action in real life as it is very
difficult for employees to share their problems and issues directly to management.
Employees can do this when they are doing it without being noticed and known to
anyone but doing this when employees are being analysed and judged by management
is not as effective as it is supposed to be. Management can chose and employ
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strategies that they can identify and understand employees' issues and employees also
do not feel that their identity is being revealed (Dai and Mao, 2018). Because sharing
issues and problems to management is like telling them their faults and doing this
confidently is not easy and possible for most of the employees.
To Increase Employee Satisfaction- Initiatives taken for this is to look at
compensation and benefit plan and working hours too. From previous discussion it has
been found that employees are dissatisfied at Family Cafe, London because they are
not being paid adequately and their working hours are also long. Looking and analysing
compensation and benefit plan will allow management to see possibilities for
improvement. Looking at working hours will help management to see whether they can
reduce working hours of change pattern of working hours so that they do not frustrate
employee and dissatisfy employee from work (Burns, Warren and Roberts Ph, 2018).
Long working hours and inadequate pay is an important cause behind increasing
turnover of employees. This is an important initiative and action is also successful as in
real life right kind of compensation plan and adequate working hours are important
reason that contribute in employees' job satisfaction. There are various types of
compensation that company can consider and that should have an element that
motivate workers to work and work effectively. Benefits are also an important for
employees' that keep them satisfied and employees' motivation increases when
companies give them various type of benefits. Compensation plan of the employees
must have monetary rewards that are linked with performance of the employees. These
rewards play an important role in motivating employees and also improves their
performance so that they can get the rewards (Bernard, 2018). One important
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consideration is that rewards and compensation which is provided to employees
company should definitely need to be fair.
For improving Skills of Employees- Initiative that has been taken for this is that
employees will be provided training of 2 weeks for dealing with day to day activities and
for customer service. This is required for keeping employees up to date with the latest
changes in business and maintaining their motivation. Employees' will also be provided
training just after they join the organisation so that they can have complete idea of
organisations' working and their role in organisation. This action is being taken so that
employees' absenteeism can be reduced, and they become loyal to the organisation.
This initiative suggest that this will bring positive and desired results, training will also
improve their efficiency and employees will be able to provide better services to
customers and this will also increase their job satisfaction, and they will work willingly in
the organisation (Jaworski and et.al., 2018). Real life impact of this action is also same
as what is being desired and aimed by management. Important consideration for this is
that management should not only rely on the training and should evaluate results and
impacts of the training after it has been completed and employees are working with new
knowledge and skills. Timely evaluation and feedback will allow management to give
suggestions and guidance where they feel employees are not good as they should be
this allows for analysing gap between 'what is' and 'what should be'. This is an important
aspect of employees' work life this also allows employees to develop themselves and
self development of employees motivate them. For Family Cafe, London this will
improve their image and customer satisfaction giving them overall benefit in the form of
profit and other benefits associated with competent employees and their effective
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performance. Most important benefit is to compete with competitors and be able to stay
ahead from competitors.
LO4
Professional Competencies
Professional competencies are generally those skills which develop and employ
by the management of the any business to gain effective results form their operations or
activities. There are mentioned some major professional competencies for the Family
cafe to more develop their decision-making and strategic planning.
Communication Skills: This is one of the main competencies which cafe is highly
needed in their business environment to solve their current issues regarding employees
(Martin and Lee, 2016). In which the management of the cafe need to improve their
communication skills to perfectly interact with employees. With the help of these skills
the manager is able to deep understand their staff. The cafe need to provide some
training sessions to their employees also to improve their communication aspect. This
step is necessary, because the management and employees both are face each other
in cafe's operations. So, both need high communication skills to know and understand
each other, and also for reduce many errors within cafe. In this case if once all people in
the cafe get proper communication skills, then the management is easily able to
effective decisions-making and strategic planning.
Team Building: This competency is also playing a great role in the development of
management strategic planning and decision-making. Team building skill is generally
needed in the manager and the team leader. Those are the top authority to give orders
to their employees or team members. In which the manger at cafe need to improve their
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team building skill to properly manage their employees (Montejo, 2018). With the help of
this skill the manager can easily solve current issues regarding employees. For perfect
team building the manager need to meet, listen, support their employees, because this
step make employees feel valued by cafe. So, this competency also help in develop
decision-making and strategic planning of the cafe management.
Motivating People: The manager is currently highly needed this competency in their
cafe, because it is facing issue called retaining employees. In this situation the manager
need to develop motivating skill which make able to motivate their employees. With this
the manager can increase energy of their employees for work hard. It is necessary for
cafe to always retail skilled employees in their operations. In case if manager no have
this skill, then it needs to take decisions for provide some motivational seminars to their
employees where a motivational speaker can motivate them to always work in the cafe.
Motivating people competency help to run all cafe's activities properly, and once their
cafe success in creating systematic work zone. Then the management can easily make
productive strategic plan and also take effective decisions for the growth of cafe.
Problem Solving Skill: This competency make able to the manager to solve any type
of challenges and problems which cafe can face. Currently the manager is highly needs
to solve their shortage of human resource issue (Carnall, 2018). It needs to rise current
pay scale for employees to solve this issue. Employees are not retained in the cafe for
long time, the reason behind the Family cafe not giving them suitable and satisfied
payment or salary. In other hand if the management not want to rise their pay scale,
then it needs to use some people management strategies at their work place for make
13

loyal to their employees. Loyalty of employees is too necessary for higher growth of the
cafe, and also for gain huge competitive advantages in the market.
Self-Development: Self development is also a useful competency which help in self-
improvement and development. According to this, the cafe need to develop themselves,
like; develop brand value, work culture, decision-making, business strategies, etc. self-
development necessary because it too useful in build trust value of employees towards
family cafe, and then they forever retain in the operations of cafe. With self-development
competency the Family cafe is automatically able to develop their decision-making and
strategic planning functions (Troy and et.al., 2017). For perfectly develop themselves,
the manager need to gain all knowledge related to hospitality management. In this case
the manager also may probably need to employ some new business strategies at their
workplace.
Ethical Nature: The Family cafe need to develop an ethical environment and zone for
their all operations. With this type of environments the cafe can improve loyalty of their
employees. Suppose the cafe running their all activities in ethical term, then their
employees also knew about it. They feel their management too good in follow all terms
of the business, and then they high trust on the cafe. They never think about drop job of
family cafe. The manager always need to focus on their activities for running them in
ethical way. This competency can develop major aspects of cafe called; strategic
planning and decision-making.
Collaboration: With this competency the manager can easily able to collaborate with
their people or employees in the cafe for take effective decisions and for productive
strategic planning (Burton, 2018). Suppose the cafe want to take decisions for provide
14

specific training to their employees. In this situation it needs to discuss with their
employees also about training, take their opinions, etc. Then at the last stage take
decisions for training on the basis of employees opinions. In general way the
management need to collaborate with their staff or employees in the cafe for improve
and develop its decision-making and strategic planning aspects.
LO5
Strategic Plan
Executive Summary
The Family cafe is facing some challenges and issues in their business
operations. The major issue is their employees are not retaining in the cafe. Family cafe
facing too much shortage of human resource in their cafe's regular activities. Here is a
strategic plan for this cafe which will really impact its business environment in positive
term.
Background
The Family cafe is a restaurant located in the London, United Kingdom. It is
generally offering breakfast, lunch, dinner facility to the customers in their cafe (Desmidt
and Meyfroodt, 2018). It is not a big cafe, currently its running their activities related to
serving food in a small market segment in London. Customers are too satisfied with the
products and services of the Family cafe. They show their satisfaction level by giving
high rating to the cafe on the hotel and travelling sites.
Aim
 To retain skilful employees in the cafe.
 To progressively run their all cafe activities.
15

 To gain high market share in the hospitality industry of the United Kingdom.
 To gain positive results from each operation within cafe.
Objective
The main objective of the family cafe is to decrease employees' turnover, fulfil
shortage of employees, motivate existing employees, etc. The another objective is to
deal with current competitors in the market, because they are become challenging day
by day for the cafe.
PEST Analysis
PEST analysis is helpful in perfectly know and understand the external factors of
the Family cafe which truly impact to its business environment in both term; positively
and negatively.
1. Political Factors: The political factors highly influence the Family cafe, because
UK government impose many rules and regulations on their restaurant and cafe
industry to regular maintain well health of its people (Höglund and et.al., 2018).
In this case this cafe also need to employ each rule of the government in their
business environment, otherwise the cafe will face some penalty or fine issue in
their daily operations.
2. Economic Factors: Economic factors also impact to the cafe. The United
Kingdom is one of the richest countries in the world. Here is the income status of
the people also great. The cafe's and restaurant's products and services are too
affordable for the people here. In the economic factors, on the basis of fiscal
policy the government imposed some taxation on local business. In this case the
Family cafe also need to complete their tax formalities.
16

3. Social Factors: The social factors are very favourable and supportive for the
cafe. People of the United Kingdom are highly literate and crazy for buying
quality products at any cost (Frue, 2017). They understand the role of quality in
any type of products and services. In which these factors influence to the Family
cafe to offer quality products for services to the customers.
4. Technological Factors: These factors are also impacting to the Family cafe,
because here is great opportunities for the cafe to use some new technologies in
their daily operations. There are various latest technological gadgets and
equipment are available for the cafe. In this case if the management at cafe
implement this equipment in their workplace, then it able to improve their
performance in the market.
SWOT Analysis
SWOT analysis make able to the Family cafe to deep study about their internal
business environment.
 Strength: The Family cafe has different range of food products which really
attracts customers. Marketing strategies are also too good of the cafe at the
small stage. Their food serving quality is much effective. Customers are satisfied
with cafe's food delivering procedure.
 Weaknesses: The Family cafe is very poor at recruiting and retaining employees
in the cafe which has high skills. The management also not much active in
controlling employee turnover. The cafe highly facing issue called labour
shortage (Trade, 2017). To deal with these situations the top-level need to take
some effective steps to solve these issues.
17

 Opportunities: The major opportunities for the cafe are to hire skilful employees
in its operations by pay them satisfied salary. Another opportunity is use some
modern marketing strategies within business operations to gain high competitive
advantage in the market.
 Threats: Currently the Family cafe facing high competition in the market. It is big
threat for the cafe. Another threat is, the cafe need to pay high salary for skilled
employees. In which this step will decrease their savings aspect.
Control & Evaluation
The Family cafe need to systematically control their business environment to
always run it on a progressive path. According to the current conditions of the cafe, its
management highly need to control on their employee turnover. Without proper turnover
the cafe will face big business injuries in the future (Stark and et.al., 2018). It also needs
to stay focused and controlled on their employees behaviour, because the cafe is very
poor in properly handle their employees. It needs to employ some strategies in the
business environment to always retain skilled employees in the cafe.
On the basis of business strategies the cafe needs to influence their employees
to always work in the cafe's operations. The manager is responsible to listen their
employees needs. Then try to pay them on the basis of their skills and performance,
because money motivation is one of the highest motivations in employees. The cafe
also need set favourable working hours for them to effectively maintain their work
efficiency.
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CONCLUSION
On the basis of above discussion and analysis it can be concluded that Family
Cafe, London who management is dealing with various issues most important in them
are high turnover of employees, absenteeism of employees, shortage of employees and
increasing operating cost associated with that. From analysis, it was found that reasons
which encourage and instigate employees to leave the organisation and remain absent
at work are their inadequate and unsatisfactory compensation and benefits that they
should be availed. Working hours of the employees at cafe is also long and they are
required to work hard and paid less. Another important reason is that they are not give
any training so that they can work effectively. These reasons at Family Cafe, London
make it very obvious that employees chose to leave the organisation. This report have
included what are various challenges that are faced by management of hospitality
industry. The initiatives taken for dealing with these challenges and overcoming
problems have also been discussed in this report which suggest that employees should
be invited for a face to face interview so that they can share their issues and problems
with management and other initiative is to look compensation plan and working hours
and provide training to employees.

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