Factors Affecting Hospitality Industries

The provided report delves into the evolution of hospitality industries as a large service provider sector, highlighting the importance of preparing for future trends to maintain stability. External factors, particularly political and technological ones, significantly impact selected industries, making it essential for businesses to adapt and innovate.

THE CONTEMPORARY
HOSPITALITY

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
LO 1.................................................................................................................................................1
1). Hospitality industry and different types of business within hospitality industry and diverse
products and services...................................................................................................................1
2). Products and services offered by selected industry................................................................1
3). Operational and functional departments and the interrelationships between departments....2
4). Contribution of hospitality industry to the economy at local, national and international
levels............................................................................................................................................3
5). Franchising and licensing assessment influencing global development of hospitality
industry........................................................................................................................................4
LO2..................................................................................................................................................4
PART 1............................................................................................................................................4
1). Investigation of different operational roles and responsibilities............................................4
2). Examination for technical and practical skills required for specific job roles within the
hospitality industry......................................................................................................................5
3). A review on the skills gaps and shortages..............................................................................6
PART 2............................................................................................................................................7
1). PESTLE analysis of selected hotel operating within hospitality industry.............................7
2). SWOT analysis for the selected hotel and effect on decision-making process......................8
3). Critical evaluation of impact of external factors on the development with current and
potential trends.............................................................................................................................8
PART 3..........................................................................................................................................10
1). Appraisal of the implications of current and potential trends in the hospitality industry....10
2). Evaluation of the ability of selected hotel to develop products and services to meet current
trends..........................................................................................................................................10
CONCLUSION..............................................................................................................................11
REFERENCES..............................................................................................................................12

INTRODUCTION
Hospitality industry is the broad compilation of different industries. It has number of
segments like tour and travel, restaurants, theme and amusement parks etc. At present hospitality
industries of UK are providing business to local, national and international markets. It delivers
job opportunities to local Chefs, sales and agency, local suppliers, retailers and wholesalers
(Horng and et.al., 2018).
The study will cover a basic description of all the functional area of hospitality industry.
It has selected INTERCONTINENTAL London- the O2, which is a branch of IHG. It was
founded in 2003 with 375000 employees at present. The study will present an essay and a report
based on the business environment of hospitality sectors. It will also highlight the importance to
franchising and licensing agreements of selected industries. Along with it, the report will also
emphasis on impact of external and internal factors of selected industry on decision making and
trends.
LO 1
1). Hospitality industry and different types of business within hospitality industry and diverse
products and services.
Hospitality Industries consist of all the services related to travel and tourism, leisure,
theme parks and other amusement services. It mainly revolves around food and beverages,
accommodation and travel and tourism.
It involves different service opportunities and number of businesses within itself. The
services provided by hospitality industry are vast and covers variant of business opportunities to
market (Khadka and Murphy- Scanlon, 2018). Businesses like hotels, tours, travels, transport,
food supply, catering, cruise, theme park, event planning, lodging, rental business, advertising
etc. are provided by hospitality industries.
As far as products and services are concerned, a broad variety of products are provided
by hospitality businesses. Products of hotels are food, dining, spa, gym and different recreational
services. Theme parks includes products that attracts children and teenagers. Travel and tourism
provide travel packages, consulting facilities.
2). Products and services offered by selected industry
Hospitality industry offers variant of products and services to its customers. It varies with
its different operational departments. Provision of food and beverages falls under food and
1

beverages services and kitchen department. Housekeeping services are managed by respective its
department. Other than this, secondary functional department provide internal support to hotel or
industry. Products and services are offered by support system of hospitality industries that is HR,
Finance, Marketing, Accounts, Research and Development (Rahimi and Gunlu, 2016).
The selected hotel “Intercontinental London- the O2” is a well-known service provider in
the sector of hospitality. It provides extensive service features in terms of accommodation,
meetings, events, spa and clubs. It has luxurious room facilities which has been segmented as
bedrooms and different suites categories.
The facility of dining varies with different views of the city to attract the customers. In
addition to this, the hotel also has grand meeting and event lounge and spacious wedding area.
In terms of its categories of food and drinks, it provides sufficient varieties to customers
based on their preferences.
3). Operational and functional departments and the interrelationships between departments
Operational departments of hospitality industries are responsible to manage the primary
services of industries. Significant operational departments of selected service industries are
Housekeeping department, food and beverages department, food production department,
Maintenance and Administration. These operational departments are highly interlinked with
different functional departments such as Human Resource, Marketing, Finance, Research and
development of selected industries all are dependent upon the operation management (Schuckert,
Liu and Law, 2015).
HR department- HR department is responsible to select and recruit suitable candidates
for different job roles in selected industry. Operational department requires highly skilled
workers to deliver strategic results which is recruited and selected by HR department. HR
department of Intercontinental-The O2 has efficient HR staff for recruitment, selection and
designing compensatory packages for the working staff.
Marketing department- Marketing functions highly influence operation management
Functions like branding, pricing, market segmentation to attract customers, enhance supply chain
management, and facilitate logistics and procurement for smooth functioning of operational
department (Rahimi and Gunlu, 2016). Intercontinental-The O2 has advanced marketing
strategies to facilitate different operations of hotel. Its marketing functions provide it highly
2

automated systems to perform operational activities. It has focused upon improving operational
excellence by generating high product designing and service strategies.
Finance department- Along with it, finance department is responsible for strategic
forecasting, cost controlling, and budgeting regarding the raw materials, purchasing and other
related functions of operation department (Solnet and et.al., 2016). Such as the finance functions
of Intercontinental-The O2 highly influence its operations. The capital funding, revenue, taxation
policy, cost analysis etc are maintained and carried out by finance manager and accountants of
the hotel which is related to all other departments of company.
R&D- Department of Research and development in every service sectors plays a vital
role in the analysis of competitors, market, innovations and alterations in existing practices of
service industries. At Intercontinental- The O2 hotel, Research and development department is
access to all the assessments and researches of different departments and services of hotel like
food, equipment, suppliers, local marketers and small businesses. These researches and studies
specifically related to the operations of the selected hotel increases its level of productivity.
4). Contribution of hospitality industry to the economy at local, national and international levels
Hospitality industries deliver utmost support to the economy of countries. It provides job
opportunities, business opportunities to small sectors and different source of wages to the
communities. The travel and tourism industries have provided US$8.3 trillion dollars to world's
GDP in 2017, whereas, it delivers 300 million jobs worldwide. Similarly, hospitality industries
deliver strategic growth to the development of infrastructure of country (Tsai and et.al., 2015).
At local level, it increases the local economy by providing adequate of job to skilled and
semi-skilled workers in its different functional area. It creates jobs not only in the field of food,
and stay but also to the medicine, local marketers (Hospitality’s contribution to UK economy
outpacing other sectors, 2017).
At national level, the hotels are covering a large proportion of business to medium and
large enterprises. It generates considerable revenue for countries and delivering various job
opportunities to global traders and suppliers (Tsai and et.al., 2015).
For instance, at and national International level, the hotel Intercontinental provides
considerable support to global economy by deliver jobs to different workers and employees. The
Intercontinental group of hotels has increased the GDP of country through extending its reach to
different geographical locations.
3

5). Franchising and licensing assessment influencing global development of hospitality industry.
Franchising is an advantage for a large and well-known brand. It delivers different market
penetration sources to industry and provide large talent pool from all markets. For hospitality
industries, global development for any brand can be achieved by strong franchising agreements.
These agreements deliver sufficient awareness of brands to the least approachable communities.
It tends to accumulate customer loyalty and service authentication (Khadka and Murphy-
Scanlon, 2018).
For instance, Intercontinental hotel group is a renowned franchiser in hospitality sector. It
has relatively large number of franchisees under it at different locations. It's franchising deliver it
strategic approach at national and international levels.
Similarly, licensing agreements of hospitality industries deliver it adequate legal
compliance to its services (Fu, 2017). Customers and employees feel safe and motivated in its
premises. The engagements with other established brand increases with strong licensing. For
example: Intercontinental- The O2 has variant provisions for luxurious services which is highly
embedded by UK hospitality laws. It has required laws for food and beverages, customers'
safety, implication of employment laws and various laws for hotel building and structure.
LO2
PART 1
To,
General Manager,
Intercontinental London- The O2
Subject: Report regarding strategic planning for future growth.
Respected Sir,
1). Investigation of different operational roles and responsibilities
Operational:
Operational mangers of Intercontinental-The O2 of each department are the experienced
4

functionaries of hotel and act as key decision makers. Major responsibility of officials is to
design strategic plans, conducts appraisals, communicates with external partners and delivers
competitive advantages to the hotel. Operation manager of hotel are highly skilled in their job
responsibilities and expertise in performing major decisive roles.
Supervisory:
Hotel supervisors professionally delegates job responsibilities among the staff and in different
functional areas. Supervisors of Intercontinental- The O2 manages there to enhance employee’s
job performance by constructive feedback. They regularly set goals and deadlines of work for
different departments of the hotel to deliver customer service on time. Supervisors of selected
hotel is highly skilled in terms of evaluating the performance and the availability of resources.
Front line managers:
Front line staff of Intercontinental- The O2 are expert in making direct connections with
customers and make them feel comfortable. They effectively manage their responsibility of
handling employees and customer’s issues. They are highly skilled employees and perfectly
aligns with hotel's objectives.
Back office managers:
Stock managers of Intercontinental- The O2 are responsible for the management of raw
materials, residual elements, and inventory management. They have responsibility of
purchasing related equipment in selected industries. Along with this, safety managers of the
hotel is highly confined with the safety protocols of the infrastructure. They are skilled and
professionalized in dealing with certain safety standards of hotel building. All the supporting
functionaries of back office are highly skilled to deliver strong support to the hotel.
2). Examination for technical and practical skills required for specific job roles within the
hospitality industry
Different job roles in hospitality industries varies with the type of services it provides with a
common objective of customers satisfaction. In selected industry specific job roles are mainly-
Guest’s relation manager: Hospitality industries requires guest’s relation manager to handle
all the issues of guests or customers.
They need to have excellent communication skills to greet and respond the customers warmly.
They must follow high level of accuracy in receiving and distributing organizational
5

information to reduce the level of misinterpretation among the staff (Rahimi and Gunlu, 2016).
They must have effective time management skills to incorporate the delivery of all considerable
services without any delay. Guest relation manager at Intercontinental-the O2 has efficient guest
relation manager, who are sufficiently skilled with all the major requirements of hospitality.
Event planner: Event planner is responsible to plan different events and occasions in hotels.
They must be highly skilled to deliver desired outcomes to industry.
He need to have multitasking abilities to handle
He must be adaptive and highly prepared to overcome suddenly occurred issues.
He must be detailed oriented and very well familiar with the industry's protocols and policies.
Intercontinental-the O2 has creative and effective team of event planners to execute the
designed plans and outlet according to the preference of customers. They have exquisite
decorative plans for different occasion held in its ballrooms, dinning, wedding and events.
Housekeeping manager: Housekeeping managers in hospitality sector is reliable to keep a
track and data of the availability of all the resources useful for industries in the future (Solnet
and et.al., 2016).
Housekeeping manager must be attentive enough regarding the existing resources in the
premises.
He must be a good analyzer to evaluate the efficiency of existing equipment in the department.
He must be expertise in handling system software to manage communications and update
tenders for business activities.
Housekeeping managers at Intercontinental-the O2 are highly focused and attentive regarding
all the supply and demand of the hotel. They keep a regular track and monitors existing
materials in the store and manages the department with daily update in each of its procedure.
3). A review on the skills gaps and shortages
Employees of Intercontinental-the O2 are slightly unskilled in terms of building
enhanced relations with their customers. The employees are highly professionalized and do not
tend to cultivate a long term communication platform with low grade employees of the hotel.
This may reduce the internal communications in the organisation and constrain employees with
productivity. Apart from this, the employees of hotel follow extremely rigid protocols of the
hotel and hence, the work system becomes less flexible and adaptive by nature. The executives
plan to overcome this issues by sufficient trainings to employees and let them know the
6

importance of employee’s engagements as well.
7

PART 2
1). PESTLE analysis of selected hotel operating within hospitality industry.
POLITICAL: Intercontinental-the O2 may get adversely affected by political instability. The
instabilities arise due to any political issue, governmental disruption and major modifications
introduced in taxation policy, trade systems become a hurdle in smooth functioning of selected
hotel. So manager need to plan and make their decision according to the political changes which
are to be done within hotel.
ECONOMY: Economy of country, Inflation rate, and low disposable income of countries
affect the development of Intercontinental-the O2. Since, it is a luxurious service provider, it
highly depends on the economy of the country to maintain its standards. Situations like unstable
financial crises and unemployment decreases the customers' flow in the hotel. It is very much
essential that manager is identifying all the change and then making planning according to this.
SOCIAL: Intercontinental-the O2 is highly constrained with the customers with middle
income. Such social factors highly cease the approach of hotel to different segments of
customers. The development of hotel also depends upon the perception of customers regarding
the hotel that is uncontrollable. Identification of social factors will help company to satisfy their
customers according to their need and changing wants.
TECHNOLOGICAL: Technology influence the development of selected hotel in a way that
technologies provides prompt and real time services to the customers. Intercontinental-the O2
has advanced technologies to facilitate customers in terms of advance bookings, hotel
information. It has efficient IT infrastructure to evaluate market trends, inflation rates.
LEGAL: The hotel has extensive range of laws and regulations applied in various departments
to strengthen its internal systems of workflow (PESTLE Analysis: Environmental Factors
Affecting Business, 2016). It has adopted various data protection laws for privacy of customers,
different employment laws for employees and all the licensing for food, suppliers and trade.
This has supported the overall functioning of the hotel services.
ENVIRONMENT: The selected hotel has high range of corporate social responsibilities to
control environmental issues. Apart from this, another concerned issue is unfavorable climatic
conditions which may hamper delivery of food products and raw materials to the venue timely.
8

To overcome such issue, the hotel has extensive supply chain management for proper and
unrestricted delivery.
2). SWOT analysis for the selected hotel and effect on decision-making process.
Strength:
Intercontinental-the O2 has strong market penetration with the help of different franchisees. It
has luxurious ambiance which is a significant source of attraction for the customers. If the
company is able to identify all its potential strength then it became easy for manager to make
decision like that of expansion easily.
Weakness:
It has weak strategies regarding customer segmentation as it do not target customers with
medium level income. It’s do not have efficient approaches towards all the local markets that
could deliver it strategic support in business environment. By identification of weakness firm
will be able to lower down so that they are been able to overcome them all.
Opportunities:
The opportunities for Intercontinental-the O2 extends from advance innovation to support
medical tourists. This will create an ample amount of competitive advantages and increase
market penetration with different services sectors.
Threats:
Other competitive and well-known brand in hospitality services that provide sufficient
customers' loyalty and satisfaction can be a threat for Intercontinental-the O2. Other threats may
arises due to sudden governmental disruptions.
Effect on decision-making process
Based on SWOT analysis of hotel, the decisions varies with its internal strength and weakness.
Its strength needs to be improvised with time and weaknesses need to be rectified. It should
improve its number of customers with advanced targeting. Whereas, the identified threats has to
be reduced by implication of strong external connections with partners and preparations for
future instances.
3). Critical evaluation of impact of external factors on the development with current and
potential trends
According to Alon and Elango (2018), the external factors for hospitality industry are highly
influential and its impact can be visible in the quality of services and market penetration. All the
9

external are uncontrollable but its impact can be measured and regulate timely. For instance,
Political issues like terrorism, civil wars, and government regulations for Intercontinental-the
O2 create a high level of disturbance. It can be controlled by maintaining high set of regulations
within its internal environment.
As per the view of Moro, Rita and Oliveira (2018), technological factors are driving forces for
hospitality industries. It tends to create automated system that deliver effective work
environment to the industry. Hotels must utilize updated and relevant technological aids to
perform each of its actions from product development to its delivery. Intercontinental-the O2
utilizes extensive range of technologies for market penetration, attracting customers and
building customer loyalty. It has cultivated its brand extension strategies with the help of
business intelligence software, CRM systems and IT infrastructure.
10

PART 3
1). Appraisal of the implications of current and potential trends in the hospitality industry
Current trends in hospitality industries are lifestyle, compliance of ethics and involvement of
technologies.
Lifestyle:
Customers are turning out to be more heath conscious and prefer healthy food at restaurants as
well. To align with this trend, Intercontinental-the O2 addresses the choices and demands of
customers and alter the menu planning based on their preferences. The food varieties are
included depends on the type of customers visits to the hotel.
Ethics:
Employees of hospitality industries needs to comply certain business ethics to deliver utmost
customer satisfaction. All the supportive bodies of intercontinental-the O2 are highly confined
with basic ethics of business that deliver a strategic thrive to organization in marketplace.
Potential trends and future trends in selected service industries is digital revolution and
advanced customer choices
Digital revolution in the selected hotel will deliver it strategic results. Along with it, this
revolution make the whole system high tech and automated with less human interference. The
technical studies and analysis will be easily conducted by advanced software. Furthermore, the
hotel needs to spend a large amount of capital in the installations of the software.
Advanced customers' choices will become a future trend in hospitality industries. In hotels,
responsibilities of chefs will be increased as customers might asked for a considerable variety of
dishes at same time. The choices of customers varies with their locations they belong to. Hence,
hotels need to be prepared and need to hire more talented chefs and menu planners from
different geographic location to cater and satisfy their customers.
2). Evaluation of the ability of selected hotel to develop products and services to meet current
trends
The selected hotel, Intercontinental-the O2 has adequate caliber to meet up the current needs of
business environment. It has distinctive quality features and abilities to manage the current
trends in the included industry. The hotel has diversified workforce to provide customized
services to its customers related to food and accommodations. The hotel has standardized
protocols to comply with the ethical framework of hospitality industries and strictly followed by
11

all of its employees. Apart from this, It has variant of franchisees to extend its approaches
worldwide which enhance its connections with different service providers and business
partners.
CONCLUSION
The report has summarized that hospitality industries are highly important for the
development of economy of a country. It has suggested that franchising and licensing agreements
provides strategic support to the selected service industries and organization must adopt adequate
measures to attain required license. The study has also described that hospitality industries have
been evolved into a large service provider sector and has to be prepared for future trends to
maintain the stability. The report has described that external factors greatly affect the
development of selected industry, among which political and technological factors are the most
considerable.
12

REFERENCES
Books and Journals
Alon, I. and Elango, B., 2018. Franchising and initial public offering: a signaling perspective.
International Journal of Retail & Distribution Management. 46(11/12). pp.1193-1208.
Chan, E. S., Okumus, F. and Chan, W., 2018. Barriers to environmental technology adoption in
hotels. Journal of Hospitality & Tourism Research. 42(5). pp.829-852.
Fu, H. W., 2017. Organizational Learning and Organization Innovation in the Tourist Hotels-An
Empirical Study. source: EURASIA Journal of Mathematics Science and Technology
Education. 13(9).
Horng, J. S. and et.al., 2018. Developing a sustainable service innovation framework for the
hospitality industry. International Journal of Contemporary Hospitality Management.
30(1). pp.455-474.
Khadka, N. and Murphy- Scanlon, J., 2018. Health and safety in hospitality.
Law, R. and et.al., 2018. Systematic review of hospitality CRM research. International Journal
of Contemporary Hospitality Management. 30(3) pp.1686-1704.
Moro, S., Rita, P. and Oliveira, C., 2018. Factors influencing hotels’ online prices. Journal of
Hospitality Marketing & Management. 27(4). pp.443-464.
Ohlan, R., 2018. Role of Information Technology in Hotel Industry. International Journal of
Scientific Research in Computer Science, Engineering and Information Technology. 3
(2). pp.2456-3307.
Rahimi, R. and Gunlu, E., 2016. Implementing customer relationship management (CRM) in
hotel industry from organizational culture perspective: case of a chain hotel in the UK.
International Journal of Contemporary Hospitality Management. 28(1). pp.89-112.
Schuckert, M., Liu, X. and Law, R., 2015. Hospitality and tourism online reviews: Recent trends
and future directions. Journal of Travel & Tourism Marketing. 32(5). pp.608-621.
Solnet, D. and et.al., 2016. What about the workers? Roles and skills for employees in hotels of
the future. Journal of Vacation Marketing. 22(3). pp.212-226.
Tsai, C. Y. and et.al., 2015. Work environment and atmosphere: The role of organizational
support in the creativity performance of tourism and hospitality organizations.
International Journal of Hospitality Management. 46. pp.26-35.
Online
PESTLE Analysis: Environmental Factors Affecting Business. 2016. [Online]. Available through:
<https://pestleanalysis.com/environmental-factors-affecting-business/>.
Hospitality’s contribution to UK economy outpacing other sectors. 2017. [Online]. Available
through: <http://www.travelweekly.co.uk/articles/282542/hospitalitys-contribution-to-
uk-economy-outpacing-other-sectors>.
13

14