Contemporary Hospitality Industry: An Analysis of IHG Operations

This report provides a comprehensive analysis of the contemporary hospitality industry, with a specific focus on Intercontinental Hotel Group (IHG). It begins by exploring different types of businesses within the hospitality sector, including accommodation, food and beverage, and tourism and travel. The report then delves into IHG's operational and functional departments, such as the front office, housekeeping, and food and beverage, illustrating their interrelationships. Furthermore, it discusses the hospitality industry's significant contributions to local, national, and international economies, supported by statistical data. The report then investigates various operational roles within the industry, like hotel managers, front desk managers, and accountants, and the essential skills required for each. The analysis encompasses the impact of both internal and external factors on the industry, along with potential threats and developments. The report concludes with an overview of the economic worth of the industry and provides a detailed understanding of the hospitality sector's structure, scope, and future prospects.

CONTEMPORARY
HOSPITALITY
INDUSTRY

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
P1. Exploration of different types of businesses within Hospitality Industry.............................1
P2. Examination of a range of operational and functional departments within IHG..................2
P3. Discussion of contribution of hospitality industry to local, national and international
economies....................................................................................................................................4
TASK 2............................................................................................................................................6
P4. Investigation of a range of different operational roles within Hospitality Industry.............6
P5. Examination of skills required for roles within Hospitality Industry...................................7
TASK 3............................................................................................................................................9
.....................................................................................................................................................9
...................................................................................................................................................10
...................................................................................................................................................14
TASK 4..........................................................................................................................................16
CONCLUSION..............................................................................................................................18
REFERENCES..............................................................................................................................19

INTRODUCTION
Hospitality Industry is a very broad category of several fields, which is inclusive of drink
and food services, lodging, theme parks, event planning and other effective operations of the
service sector. In addition to this, this industry is one of the most effective and important sector
for each and every type of customers to fulfil their accommodation and leisure requirements
(Claveria, Monte and Torra, 2015). The report below is based on Intercontinental Hotel Group,
which is one of the most recognised hotel groups operating in London, United Kingdom. The
report covers a detailed examination of current structure, scope and size of the hospitality
industry, along with exploration of current and anticipated skills requirements within the same.
Furthermore, the assignment includes review of internal and external factors impacting
hospitality industry and how they relate to current issues facing the hospitality industry. In
addition, the report undertakes analysis related to current and potential threats and developments
affecting hospitality industry.
TASK 1
P1. Exploration of different types of businesses within Hospitality Industry
Hospitality Industry is inclusive of a number of businesses which serve different purposes
within the sector. Furthermore, each and every type of business within the sector is connected to
one another in one form or the other. Thus, below are several types of businesses within the
hospitality industry:
 Accommodation:
One of the biggest category within the hospitality industry is accommodation, which is
inclusive of several hotels, as well as facilities that provides people with overnight
accommodation for individuals while travelling. This includes several types of hotels such as
budget, luxury spa, resort, boutique and bed and breakfast hotels. Intercontinental Hotel Groups
belong to this type of business within the hospitality industry. It provides effective services
associated with accommodation to the public, along with vast range of facilities to enhance the
experiences (Huang and et. al., 2016).
 Food and Beverage:
Another type of business within the hospitality industry is food and beverage business.
This is inclusive of food preparation and presentation activities to customers. It includes certain
1

restaurants and fine dining arrangements such as restaurants, fast food joints and cafes. These
provide different cuisines and food which are in accordance with cultural and social trends.
These are linked with the accommodation services as hotels such as Intercontinental Hotel
Groups effectively and essentially involve restaurants and food services in branch within London
and all over UK, which is related to serving different types of food and beverage services for a
range of customers (Kandampully, Zhang and Bilgihan, 2015).
 Tourism and Travel:
Another vast field within the hospitality industry is tourism and travel. There are certain
effective businesses associated with this sector such as trains, cruise ships, airlines, tour
operators etc. However, due to its vast expansion as well as enhancement in trends, travel and
tourism businesses have enhanced in scope and size and includes services such as different types
of tourism, which covers destination tourism, spiritual tourism, food travelling and so forth.
P2. Examination of a range of operational and functional departments within IHG
Within a hospitality organisation such as a hotel or restaurant, there are different
departments which handle distinct operations that are associated with serving customers in an
appropriate manner. Furthermore, all these departments are interrelated to one another which
reflects their structure and dependencies of these units with one another (Law and et. al., 2015).
Hence, within Intercontinental Hotel Groups, the several departments are discussed effectively
below:
2

Illustration 1: Organisational Structure of Intercontinental Hotels Group
(Source: Organisational Structure of Intercontinental Hotels Group, 2019) Front Office: One of the most prominent departments within the hotel is the front office,
which handles the bookings, appointments and administrative functions associated with
the overall organisation's departments (Neirotti, Raguseo and Paolucci, 2016). This
department is responsible for handling and managing the customers as per the occupancy
of the hotel, along with dealing with them the moment they enter at the hotel. It relates
with the other functional departments as it is required to coordinate with other
departments such as housekeeping and food and beverage to ensure that all the entry
arrangements are being made for the patrons. Housekeeping: This department is related to the management of several activities
associated with maintenance of standards within cleaning the rooms, changing bedsheets
and covers and overseeing that all the facilities are usable within a hotel room (Ozturk,
2016). This department is related to other departments as front desk provides them
information about the room, time and arrangements they are likely to make for customers
3

visiting the hotels. Moreover, food and beverage department is coordinated in order to
provide the services on time and along with the desired preparation.
 Food and Beverage: Within Intercontinental Hotels Group, this department is linked
with provision of food services and different types of beverages to customers of the hotel
(Radojevic, Stanisic and Stanic, 2015). Furthermore, the items prepared by them are
inclusive of an appropriate team of kitchen staff and hospitality workers which take
orders from the customers and develop, as well as present the items effectively. It
coordinates with the front office in relation to managing the delivery of services, along
with taking orders from customers. Furthermore, in relation with housekeeping, the
interrelationship is reflected by ensuring compliance with the cleanliness standards within
the kitchen and appropriate cleaning and maintenance of kitchen equipments.
P3. Discussion of contribution of hospitality industry to local, national and international
economies
The overall hospitality sector within the UK is highly effective towards contributing to
the local, national and international economies. This is because this vast sector has several
businesses which provides a range of different services to customers, that helps in contributing in
domestically, nationally and internationally. All these aspects are clearly discussed below:
 Domestic Contribution:
Hospitality Industry has a very prominent contribution domestically, where it
appropriately give in to the economic benefits to the domestic localities. For instance, within
London, there was almost 0.1% gain in occupancy within hotels of London which resulted in an
appropriate economic growth domestically (UK hotels forecast 2019, 2019). Moreover, as per
several forecasts, the future of hospitality industry within the UK holds more economic benefits
for London with almost 0.3% growth per occupancy,
4

Illustration 2: RevPAR 2019 Forecast
(Source: London hotels remain at the top of their game, 2019)
 National Contribution:
Within the UK, Hospitality Industry has been one of the highest contributing sectors of
the country. After the 2008 recession, this sector has been a consistent contributor of creating
effective jobs around the country. This is reflected by the fact that it created almost 500,000 jobs
within 5 years of recession. Furthermore, as per the current market situation, hospitality industry
has been claimed to be fourth largest employer within the UK, with almost 3.2 million direct
jobs, as well as 2.8 million indirect jobs (Hospitality industry biggest contributor to UK economy
since recession, 2019). Furthermore, in 2018, the sector generated more than £100 Billion which
has been a massive contribution in the economy even after the decrease in currency rate (UK
hospitality industry growth analysis for 2019, 2019).
 International Contribution:
In international economies too, hospitality industry has a prominent impact on the
economy of other countries. One such example is United States, which is perhaps one of the
largest economies in terms of revenue. For example, in 2017, within the country, exports in the
US in relation to hospitality industry have been reported up to almost 11% in 2017. Moreover, in
2018, it helped in generating almost 1,140,000 job openings (90 Hospitality Statistics You Must
Know, 2019).
5

Analysis of economic worth of Hospitality Industry
In recent times, the economic worth of hospitality industry has immensely enhanced due
to rise in economic variables such as global growth, franchising and licensing development. Due
to globalisation, hospitality organisations have experienced immense opportunities to manage
their operations globally and not just within their own country. Furthermore, entry modes like
franchising and licensing have increased and applied by every hospitality organisation to spread
across the globe. For example, Intercontinental Hotels Group has its branches in more than 100
countries through licensing and franchising. Thus, this embarks the economic worth of this
industry which is constantly rising (Solnet, Kralj and Baum, 2015).
TASK 2
P4. Investigation of a range of different operational roles within Hospitality Industry
Hospitality industry incorporates a range of different individuals with distinct
competencies and requirements as per the needs of the sector. These operational roles within the
organisation operate differently with respect to the demand of their services towards the hotel as
well as the customers.
Some of the prominent operational roles within the Hospitality Industry are discussed
below:
 Hotel Manager:
One of the key operational roles within the hospitality industry is Manager. For a hotel
like Intercontinental Hotels Group or a restaurant, manager is responsible towards each and
every function and operation within the organisation. This requires them to appropriately plan,
organise, direct as well as control all the resources, strategies and working. In addition to this, the
nature of this operational role is very wide and hence, they are required to effectively and
essentially coordinate with every department of the organisation (Wang, 2016)
 Front Desk Manager:
Another appropriate and effective role within the Hospitality Industry is front desk
manager. These individuals are required to handle all the operations and functions associated
with the front desk department of the organisation. Some of their job roles include taking
appropriate bookings, checking and managing the vacancies of the hotel, attend to queries and
complaints, provide information related to the services of the organisation and essentially ask for
6

customer feedbacks. In addition to this, since they are the first persons to meet the guest after
they enter, communication and effective greeting becomes one of their prominent aspects.
 Accountant:
This operational role within the hospitality industry is associated with proper accounting
of each and every transaction made by the company. In addition to this, they are required to
monitor and manage all the incoming and outgoings of the hotel, along with certain investment
decisions which could help the organisation in gaining more profit.
P5. Examination of skills required for roles within Hospitality Industry
There are certain skills which are required to be possessed by individuals for the roles
within Hospitality Organisation. Some of the prominent skills within these roles are discussed
below:
Hotel Manager: Planning: This skill is highly required within the industry as hotel managers are required
to plan the daily activities, duties and operations as per the daily requirements of their
organisations. Directing: This skill is associated with directing all the resources in ways through which
optimum utilisation is achieved along with the task is accomplished in an appropriate
manner.
Front Desk Manager: Communication: Since the front desk manager is one of the key individuals that could
develop a positive perception within minds of customers, they are required to
appropriately communicate with the customers and hence, this skill is highly necessary Management: It is a skill which is required in front desk operations to manage operations
associated with booking, occupancies and customer information.
Accountant: Analytical Skills: Accountants within Hospitality Industry are required to analyse
different accounts along with other expenses in context with the miscellaneous activities.
 Calculative Skills: There are certain calculations within the organisation in terms of
accounting, which requires the accountant to possess these skills in order to produce
accurate and relevant accounts (Yadav and et. al., 2016)..
7

The overall hospitality industry is associated with several individuals and operational
roles which must be carried out in an effective manner in order to showcase an appropriate
requirements within the overall management and functionality of the sector. However, while the
employees in the industry possess appropriate Planning, Management and Calculative Skills,
there are several skill shortages within the sector in relation to Analytical, Communication and
Organisation Skills.
However, there are several contemporary factors which are related to driving skill
shortages and high turnover within the industry. Some of these factors are listed below:
 One of the most prominent factors is Brexit, which has had several impacts on the
turnover and driving skill shortages due to migration of skilled employees from UK to
EU countries.
 Another factor is the global recession and decrease in value of pound, which is failing the
sector to retain its employees.
All these aspects have a prominent impact on the hospitality industry as this has been
driving its performance towards a lower side. However, in relation to ensure its improvement,
the organisation must have certain engagement activities such as flexible working, appraisal
systems, etc.
8

TASK 3
9

10

11

12

13

14

TASK 4
15

16

CONCLUSION
Thus, it is concluded from the above report that hospitality industry is quite an effective
sector for organisations to work for. Moreover, it is essential that different types of businesses
within hospitality industry are explored and operational and functional departments are examined
within organisations in the sector. Hospitality sector contributes effectively towards local,
national and international economies. In addition to this, it is essential that operational roles
within the industry are investigated, along with the skills required for the same. Lastly, external
and internal analysis are necessary to be undertaken by the hospitality industry to effectively
analyse the impact of business business environment of the sector along with implication of
several current and potential trends within the same.
17

REFERENCES
Books and Journals
Claveria, O., Monte, E. and Torra, S., 2015. A new forecasting approach for the hospitality
industry. International Journal of Contemporary Hospitality Management. 27(7).
pp.1520-1538.
Huang, J. and et. al., 2016. The impact of CEO servant leadership on firm performance in the
hospitality industry. International Journal of Contemporary Hospitality
Management. 28(5). pp.945-968.
Kandampully, J., Zhang, T. and Bilgihan, A., 2015. Customer loyalty: a review and future
directions with a special focus on the hospitality industry. International Journal of
Contemporary Hospitality Management. 27(3). pp.379-414.
Law, R. and et. al., 2015. Distribution channel in hospitality and tourism: Revisiting
disintermediation from the perspectives of hotels and travel agencies. International
Journal of Contemporary Hospitality Management. 27(3). pp.431-452.
Neirotti, P., Raguseo, E. and Paolucci, E., 2016. Are customers’ reviews creating value in the
hospitality industry? Exploring the moderating effects of market
positioning. International Journal of Information Management. 36(6). pp.1133-1143.
Ozturk, A. B., 2016. Customer acceptance of cashless payment systems in the hospitality
industry. International Journal of Contemporary Hospitality Management. 28(4).
pp.801-817.
Radojevic, T., Stanisic, N. and Stanic, N., 2015. Ensuring positive feedback: Factors that
influence customer satisfaction in the contemporary hospitality industry. Tourism
Management. 51. pp.13-21.
Solnet, D., Kralj, A. and Baum, T., 2015. 360 degrees of pressure: The changing role of the HR
professional in the hospitality industry. Journal of Hospitality & Tourism
Research. 39(2). pp.271-292.
Wang, C. J., 2016. Does leader-member exchange enhance performance in the hospitality
industry? The mediating roles of task motivation and creativity. International Journal of
Contemporary Hospitality Management. 28(5). pp.969-987.
Yadav, R., and et. al., 2016. The influence of green marketing functions in building corporate
image: Evidences from hospitality industry in a developing nation. International
Journal of Contemporary Hospitality Management. 28(10). pp.2178-2196.
Online
90 Hospitality Statistics You Must Know. 2019. [Online] Available Through:
<https://financesonline.com/hospitality-statistics/>
Hospitality industry biggest contributor to UK economy since recession. 2019. [Online]
Available Through:
<http://www.ibs-systems.co.uk/morning-briefing-from-propel/hospitality-industry-
biggest-contributor-to-uk-economy-since-recession/>
UK hospitality industry growth analysis for 2019. 2019. [Online] Available Through:
<https://www.planradar.com/uk-hospitality-industry-growth/>
UK hotels forecast 2019. 2019. [Online] Available Through:
<https://www.pwc.co.uk/industries/hospitality-leisure/insights/uk-hotels-forecast-
2019.html>
18