SWOT Analysis and Market Trends in Hospitality Industry

The assignment begins by conducting a SWOT analysis for The Ritz Hotel UK, identifying its strengths, weaknesses, opportunities, and threats. It also explores current and potential trends in the hospitality industry, including local experience, artificial intelligence, and personalization. The report concludes that these trends have a significant impact on the industry, contributing to revenue growth and customer satisfaction.

The Contemporary
Hospitality Industry

INTRODUCTION
Hospitality can be defined as a relationship among a guest and host and this has been
developed as an industry which includes hotels, restaurants, bars, clubs and many more. The
majority of government's revenue come from hospitality establishments in United Kingdom.
Furthermore, various services are provided by the entities operating in this sector and can be
divided into many categories. In this report, The Ritz Hotel has been chosen which is a five star
hotel located in Piccadilly, London, United Kingdom. The things are covered in this are kinds of
business along with diverse products and services, examination of range of operational and
functional departments, contribution of hospitality industry, assessment of use of licensing or
franchising, investigation of range of types of operational roles, review of skills gaps and
analysis of macro and micro environmental factors for assessing the potentials.
PART 1
1. Different types of business within hospitality industry and diverse products and services
Hospitality industry consists variety of business categories in hospitality industry as its
scope is broad. These have been elaborated as follows:
 Accommodation- This service is provided by majority of hotels which is bundled with
many other facilities to make the stay of people pleasant who travel from one place to
another. Some of the examples in this category are hotel resort, boutique hotel, breakfast
and many more. As per the data provide by World Tourism Organization as of 2017, 37.3
million people visited UK. These are the services which are intangible in nature.
 Food and beverage- It is one of the largest sectors within hospitality industry comprising
of huge range of services related to food and beverage to be provided to customers. These
include, fast food, fast casual, dining and similar activities. These are the services but
products are also involved.
 Travel and tourism- There are organisations within this industry providing the services
of travel and tourism by covering trains, cruise ships, and tour operators. This sector
generates huge number of employment. These are also the services which are intangible
in nature.
 Entertainment- Customers always look for additional things which are beyond the basic
services provided by entities. Theme parks, theatres, Disneyland, Madame Tussauds,
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British Museums are some of the examples included in this. These are intangible in
nature and fall in the category of services.
2. Examine range of operational and functional departments along with review of inter-
relationships of these
A hotel is formed by different operations and functional departments which are connected
with each other in order to achieve the goals. There are four major units responsible for carrying
the functions such as housekeeping department which is responsible for cleanliness and
maintaining hygiene in the whole premises. Food and beverage service department provides
food, management restaurants, bars etc. by maintaining high quality. Front office department is
the face of a hotel which entertain the guests, provide details, allot rooms, and many similar
activities. Security department has the responsibility to protect guests and staff staying in the
hotel from any incidents such as theft, accident etc.
On the other hand, functional departments purchase & stores which make purchase of
raw materials and other stocks required in the hotel. All its activities are looked by the manager
in charge. Sales and marketing undertake the activities of selling rooms, functions, conventions
etc. to the guests. Accounting is the branch which is responsible for managing the entries and
finance such as processing of payrolls, data, internal reports and financial statement. Human
resource department looks after hiring, termination, training, etc.
Every department is related to each other for example, front office is the plays the role to
communicate accounting department about the details of payment received from the guests.
Furthermore, if there is requirement to hire employees for any of the posts then HRD is
contacted. Similarly, housekeeping department has to clean the hotel before the sales and
marketing department make the sales. In this way, all the departments are inter-related to each
other for carrying the activities efficiently and effectively.
3. Discuss the contribution of Hospitality industry at local, national and international levels of
economies
Hospitality industry is one of the biggest industries which contribute to major revenue in
the economy. These affect the activities at local, national as well as international levels. The
importance of this has been explained below:
Employment and Gross Value Added (GVA)- The gross value added services deriving
from production of goods and services from hospitality industry has been double reaching to
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5.9% overall as of 2017. It was just half in 2016 and the rate is growing in 2018 (Jobs in UK
hospitality industry, 2016). On considering the contribution at international level, then approx.
72 millions jobs have been added to this.
Tax receipts, exports and investment- The attractiveness of hospitality industry
depends on tax collections, transactions and investment. In the past two years, the direct tax
collected £38 billion. Exports were £15 billion in 2017. however, the investment in hospitality
industry reduced by 12%.
Recent performance/current trading- The current performance of this industry in UK
is growing but recession and BREXIT have hit it hard. Furthermore, advancement in the
technology and digitalisation has been included by the organizations operating in hospitality
industry for improving the quality of the services in order to increase the customer satisfaction.
At the international level, there is a constant growth in hospitality industry because investment at
huge level has been made by the investors.
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Future growth forecasts-
5. Investigate a range of different operational roles within the industry followed by examination
of skills required for the roles
Every organisation in Hospitality industry has their own operations for which individuals
are hired by giving the jobs to capable candidates. Each one of the recruited employees should
have skills according to the positions to be filled. Skills shows the ability of a person to perform
the tasks and functions smoothly. An employee should possess the required skills in order to
understand and achieve the goals. Some of the operational roles which are there in the industry
are as follows:
Types of staff Skills required Skills gaps you can
identify
Impacts of these
skills gaps on the
industry
Housekeeping
supervisor
 Communication
skills for giving
 This skill is
strong by
No organization can
survive without
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commands to give
clear commands to
the members.
 Time management is
required to complete
all the activities
within the scheduled
time.
 Management of
supplies is necessary
for effective cleaning
and to maintain
hygiene.
which
instructions are
given without
any ambiguity.
 There are
issues in
managing the
time for each
task and
complete the
activities
within the
allotted time.
 Overlooking at
the materials
which are
required for
carrying the
operations
effectively is
adequate.
managing the time in
an effective way. This
can lower the overall
productivity leading to
low revenue
generation.
Receptionist  Communication is
imperative for the
exchange of
information between
the customers and the
hotel management.
 Putting entries in the
registers for
recording every
details and payment
 There is no
problem in
communication
with the guests
but it needs to
be improved.
 This is the
responsibility
of accounting
department due
The wrong entry of
transactions in
accounts can create
problem in the
financial statements.
This should be
prevented otherwise,
mismatched
information can lead to
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received or refunded
etc.
to which many
a times issues
arise as to
which book
should be
considered for
making the
entries.
wrong decisions.
Security
manager
 Problem solving skill
should be there to
manage the
emergency situations
and resolve the issues
as soon as possible.
 Security manager
should have decision
making skills to
make right decisions
as per the situations.
Desired outcome
depends on the
choices made by the
manager.
 There are
problems in
applying the
skills to resolve
problems or
contingency
situations.
There should
be quick
decisions to
every
emergency
circumstances
before they
become worse.
 Decision
making skill is
good if any
decision has to
be made in a
long process.
Contingencies can
arise any time without
any warning or
certainty, this may
lead to huge losses
which should be
prevented by taking
prompt actions to
control the effect
otherwise, economy
can see a decline in
revenue, growth and
development.
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6. Review the skills gaps for different operational roles and analyse the impact on the industry
As per the above table, there are difference between the skills required and the skills that
are actually there in the specified roles presented in the table. The gaps between these have been
shown below:
 Time management- Time is one of the most important elements in a person as well as
for a person. Every activity is assigned along with deadline to complete them.
Furthermore, there should be effective management for the time in order to manage the
whole work without any hurdle. The role of housekeeping supervisor is important
because of the responsibilities to keep the place clean. The possible impact of this skill
gap is that, all the bookings of hotels, resorts, events, airlines etc. depend on the timing
only. Therefore, if the housekeeping supervisor is failing to complete the activities on
time then, places like hotels may lose the customers. This can be improved by setting
time for completing the tasks. The actual time taken will be used to measure against it.
 Accounting- This is the core activity of Accounting department which is about
maintaining the records of transactions being occurred in the organisation. In case a
receptionist, the gap in the skill has arose with regard to making the entries in the right
books of accounts. It can impact the industry in a way which that wrong financial
statement can make the organizations lose profit and losses. This can be improved by
obtaining required knowledge through training.
 Problem solving- This skill should be there in security manager in order to make quick
decisions so as to prevent any accident or contingencies. It can be improved with the help
of tackling the situations which are of difficult nature. On considering the industry, if the
security manager of organizations in hospitality industry fails to make quick decisions
then extreme consequences can occur. This may increase the costs and other burden.
PART 2
Introduction
Hospitality industry is huge in scope which comprises of services in the categories of
accommodation, food and beverages, travel and tourism and many such sectors are included in
this. This report is based on The Ritz Hotel which is situated in London, United Kingdom.
Furthermore, it covers PESTEL, SWOT analysis, current and potential trends and their impact.
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PESTEL analysis
This framework is used to evaluate the macro-environmental factors for making decisions
and strategies. The same is as follows:
Political factors- In the context of The Ritz Hotel, it should assess the political conditions
of UK which is stable in current situations. Furthermore, there is constant support from the
government to this industry.
Economic factors- All the crisis and other issues such as BREXIT have been settled
which shows that The Ritz Hotel can make changes in its strategies and policies.
Social factor- This is about the social norms of people living in a society. Therefore, The
Ritz Hotel is renowned among large number of population which makes easy for it to introduce
new services.
Technological factors- The Ritz Hotel uses latest technology which makes it attractive
than its competitors. It should make investment in upgrading the latest technology.
Legal factors- The laws and statutes applicable on hotels are followed by The Ritz Hotel
in order to avoid any legal consequences.
SWOT analysis
Strengths
 The Ritz Hotel has strong position in UK hospitality industry which makes it lead the
market.
 The strategies and policies are good strong on the basis of which it fulfil the goals and
objectives.
 It has certain amount of exclusivity and dominance in the market.
Weaknesses
 There is huge competition by other hotels which make the survival for The Ritz Hotel
difficult.
 It has to provide huge number of services of premium quality in order to provide higher
satisfaction to customers.
Opportunities
 There are many developing nations where The Ritz Hotel can expand its business before
the competition gets intense.
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 Also, there are huge chances for it to explore new technologies which can be used by The
Ritz Hotel.
Threat
 The attractiveness of UK market create huge scope for new entrants to make entries in
hospitality industry leading to high competition.
 Recession and inflation in some of the markets may create issues for The Ritz Hotel to
survive in those countries.
CURRENT AND POTENTIAL TRENDS IN INDUSTRY
There are different trends in hospitality which are prevailing in UK as well as global
markets. The same have been provided below:
Local experience- This is an emerging trend which is about making the guests get the
experience of local culture and countryside. This has huge potential as the tourists falling in the
category of millennials prefer this.
Artificial intelligence- This has gained popularity in last couple of years which is helpful
in making the people less dependent on the staff present in the organizations. Every guests can
give command get all the work done automatically.
Personalisation- Earlier, people used to book bundled services offered by different
organizations but now this has changed. Every person wish to customise the services according
their needs.
IMPACT OF THESE TRENDS ON THE INDUSTRY
 Local experience helps in attracting young people to make them spend more in these
activities. It contributes greatly in the revenue of the government making the economy
strong.
 With the use of artificial intelligence, the investment can be made in the organizations
existing in hospitality industry. It is one of the ways in which the potential of this trends
can be multiplied.
 People have become more into customisation wherein the services are modified as per the
requirements of the customers so that higher satisfaction can be provide to them.
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CONCLUSION
From the above report, it has been concluded that hospitality industry is growing with the
time and developments can be included in this.
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REFERENCES
Books & Journals:
Online:
Jobs in UK hospitality industry. 2016. [Online]. Available through
:<http://www.travelweekly.co.uk/articles/282542/hospitalitys-contribution-to-uk-
economy-outpacing-other-sectors>.
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