An Analysis of the Contemporary Hospitality Industry and IHG's Role

This report provides a comprehensive analysis of the contemporary hospitality industry, focusing on Intercontinental Hotels Group (IHG). It begins with an introduction to the industry, outlining its various sectors like accommodation, restaurants, and pubs. The report then details the operational and functional departments within IHG, such as housekeeping, front office, sales, and human resources, highlighting their roles and responsibilities. It emphasizes the industry's contribution to local, national, and international economies, including the impact of franchising. The report further examines operational roles within hotels, the skills required for various positions, and current skill shortages. It includes PESTLE and SWOT analyses for IHG, assessing external factors and its strengths and weaknesses. Finally, the report discusses the implications of current and potential trends in the hospitality industry and evaluates IHG's ability to meet these trends, concluding with a summary of the findings and recommendations.

The Contemporary
Hospitality
Industry

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
TASK 2............................................................................................................................................4
P4. Range of various operational roles within hospitality industry........................................4
P5. Skills require for the role in hospitality industry and current skill shortage....................5
D2 Impact of skill gap on the industry and solution for this..................................................6
TASK 3............................................................................................................................................6
P6. PESTLE analysis which affect the development of hotel within hospitality industry.....6
P7. SWOT analysis for IHG...................................................................................................7
D3. External factor impact on the current and potential trends..............................................8
TASK 4............................................................................................................................................8
P8. Implication of current and potential trends in hospitality industry..................................8
M5. Evaluation of ability of IHG to meet current trends.......................................................9
CONCLUSION................................................................................................................................9
REFERENCES..............................................................................................................................11

INTRODUCTION
Hospitality industry wider business group which provides various kinds services to the
customers. This is a broad category of service industry which provides the different services like
food services, travel and tourism and accommodations in places such as hotels, resorts,
conference centres and amusement. To better understand this concept Intercontinental Hotels
Group is being selected for this present report. There are various types of business within
hospitality industry and diverse products and services which is being explained in this report.
The operational and functional departments within hospitality business, is being explained in this
project. As this business make share in the growth of economies is discussed in this report. A
range of various operational roles and skill required for roles and shortage in current skills in
explained in this report. The PESTLE and SWOT analysis for selected organisation is being
undertaken in this report. Apart from this, implication of current and potential trend in hospitality
industry is being discussed in this report.
TASK 1
Hospitality industry is wider business which focuses on the satisfaction of customers and
providing specific experience to them. This is a completely service base industry so better
service organisation will provide more customer satisfaction will be there. There are different
hospitality sectors which are described as below:
Accommodation is a broad sector of hospitality industry which ranges from bed and
breakfast and hotels to other facilities which offers lodging services. In today's environment
complete focus is being made these days to improve the lodging experience for people travelling
around world. As IHG hotels is trying to give its best in order to provide better experience to the
customers (Bharwani and Butt, 2012). The diverse product and service of hotels are such as
green promotional products, concierge, spa and wellness services, housekeeping and other room
services etc. Restaurants is another business category of hospitality which comes under the Food
and beverages sector. Apart from restaurant, Food and beverage industry includes the fast food,
takeaway, transport catering and licensed trade etc. The restaurant which feature course meals,
drinks and other food services. As there is full range of service restaurant which starting from
fine dining to theme dining.
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The diverse services provided by the restaurant are the serving food at table to customers,
delivering food at door step, buffet, casual dining and fast food etc. are services provided by
restaurant. Pub is also coming under this category which are licensed to sell alcoholic drinks
such beer and ciders. Apart from this they also provide the service of meals and snacks. Apart
from this there are bars and nightclubs, hospitality and food service providers and memberships
clubs and events comes under this category.
There are different department in the IHG hotel such as operational and functional which
have their roles and responsibility. The IHG has vertical organisational structure in their hotel.
These departments are discussed as below:
Operational department refers to those which perform the operation at ground level in
hotel. These are: Housekeeping department take care about providing the housekeeping services
such as room cleaning and laundry services to the customers. This is a core and important service
for every hotel (Williams, 2012). Food and beverage service department is also an operational
function which is performed in the hotel. This majorly concerned with the providing quality food
services to guest and visitors. Front office department is very common but important function of
the hotels. As this department of IHG directly connect with the guest and visitors. They welcome
guest, attend calls and solve basic queries of guest (Boella and Goss-Turner, 2013).
Functional department is having various functions which are performed in hotel for
maximising customer satisfaction these are as following such as, Sales and marketing is basic
department but this is backbone of every organisation. This department helps in maximising the
sales of hotel by advertising its products and services. As department is also liable for generating
new business for hotel. Human resource department handles the recruitment, hiring, training
and development of hotel staffs. This is liable for maintaining the welfare and industrial relation.
Hotels like IHG is putting more focus on the training and development in order to provide better
experience to customers. Apart from this, Finance and accounting and purchasing and store is
also part of this functional department.
In the hotel, there are different department which shares responsibilities according to the
post and designation of employees. As all the departments have coordination among them in
order to share duties as because all departments are very closely interrelated with each other. As
marketing department is interrelated with human resource the human resource department hire
the skill employees in order to perform marketing and sales activities. Similarly, the finance
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department of organisation allocate the funds to the marketing department in order to perform
marketing activities effectively (Brotherton, ed.,2012).
The hospitality industry is very vital and contribute towards the economies of country. As
this has major sharing in growing the growth and economies of country. Industry is trying to
cover more market share in order to grow their business at local, national and international level.
The growth of economy makes directly impact on growth of industry business. The IHG sharing
in growth of local, national and international economies which is discussed as below:
Local economy refers to by satisfying need and demands of local visitors and guest the IHG is
giving their share to make growth of local economy in the London. As with the help of
evaluation it has been observed that hotel has improve the customer satisfaction by providing
qualitative services to the customers. The hotel has convinced its customers in order to spend
more on the services which are expensive and leads to growth of local economies. National
economies are basically related with the hotel is helping in creating employment for different
skill set people in order to improve their standard of living and satisfying their needs. As there is
various skill set employees are required in order to perform different function in various
department so IHG recruit people and helps in cut down unemployment rate from economy. So
the reduction in unemployment makes direct impact on the economy as it will increase per capita
income of person and overall the growth rate of nation will be increased (Praub and Robert,
2013). International economy is one of the crucial factors in the hospitality industry and IHG
hotel make contribution in international economy as by creating new employment opportunities
for the people who are unemployed. As this has direct impact because industry has created
approx. 5.5 million new job opportunities for job seekers.
The franchising refers to the marketing concept which is adopted by the organisation as a
part of their strategy in order to expand their business internationally. The development of this
concept has made huge influenced on the global development of hospitality industry. The main
advantage of this concept is that it reduces the risk of business failure as because it is based on
proven ideas. And product and services are already known to people and have pre-set market
share which attract the people to purchase franchise of big companies. Due to its certain
advantage this has developed the hospitality industry worldwide. The Hotel Industry market
statistics as per the Statista and Deloitte. As total value of global hotel industry is about to cross
the $500 Billion by end of 2018. Travel and tourism contributing 10% to global GDP. Corporate
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travel is expected to contribute by 6.1% by end of 2018. The sustain of growth of hotel industry
is by 6-7%. As international tourist is considered as big advantage for the hotel industry growth.
The chart for International Tourist Arrivals for 1995 – 2015 is below.
(Source: UNWTO world tourism barometer, 2016)
TASK 2
P4. Range of various operational roles within hospitality industry
Operational roles are those which are performed within the hotel. As operational role
needs to be performed carefully in order to satisfy customers’ needs effectively and efficiently.
There is various operational role which are performed at IHG these are as follows:
Supervisory:
The supervisory is an operational role which is performed by the supervisors of hotels.
As the main role of supervisory is to do supervision on the activities of its subordinates and other
staff members. Supervisor delegate and monitor the work of employees and check whether
customers’ needs is being fulfilling or not. As to perform supervisory roles it requires the skilled
worker in order to manage the various nature of employees (Lub and et.al., 2012).
Front line managers:
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This is role of operational departments of hotel. They assign task, managers work flows,
monitor quality of work and deal with employee’s problems. They report the middle and
executive manager of company regarding problems and success of company at ground level. To
perform the job of front line managers one requires the semi-skilled worker in order to
communicate with employees and solving customer grievances.
Back office manager:
The back office managers play an important role in settlement, clearances, record
maintenance, regulatory compliance and information technology services. These services cannot
be seen in the front line but plays an important role in order to smooth functioning of
organisation. This needs the basic skills and experience for performing the job role.
P5. Skills require for the role in hospitality industry and current skill shortage
Skills refers to the capacity and capability of an individual in order to perform a given job
role. The different skill set is required for performing various functions within industry. There
are ample numbers of workers for the industry but major concern is that they are not fulfilling
the required skill set in hospitality industry. As different capacity requires for performing
different role in IHG these are discussed as below:
Housekeeping department:
The house keeping department is very important department which plays a crucial role
for satisfying customer needs. Skills required for respective department at IHG is punctuality,
adaptability, patience and better communication skill (Legrand, Chen and Sloan, 2013).
Frond office:
To perform the front office job one needs the confidence so that staff can convey the
relevant information to guest and visitors. Apart from this it requires the problem solving skill so
that the customer problem and grievances can be solved and they feel satisfied with the IHG
services.
Supervisor:
The supervisor is good position and this requires the skills which can manage staff and
employees. As to perform the job role it requires management skill in order to manage the staffs
and motivational skill also so that one can motivate its employees to perform the job effectively.
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Apart from this some common skills like communication, gratitude, management,
problem solving, coordination and negotiation skills should be there in the staff of hospitality
industry.
Current skill shortage:
The problem of skill shortage is being faced by every industry such as “Inter-continental
group”. This company is not getting what they want from their candidates. As there is some skill
shortage which is discussed below:
Complex problem solving:
This is a common shortage in the Continental group as staff and employees are not able
to solve critical problem in business because they are having lack of training of ability to handle
the thinks in tough situations.
Negotiation:
Negotiation skill is very important to crack deal on the positive note from business side.
As employees shorting at this skill which is ultimately a disadvantage for Inter-continental
group. Apart from this service orientation, cognitive flexibility and quality control skill is still
shorting in the industry (Law and et. al, 2013).
D2 Impact of skill gap on the industry and solution for this.
The skill gap is a very common problem in the industry. As this skill gap issue is creating
impact on the hospitality industry and business of this particular industry. As due to skill gap the
customers are not satisfied with services of hotels and they are looking for another option for
accommodation. So this will ultimately make impact on profit of business. These skills gaps can
be fulfilled by providing training and development to the employees so that they can perform
their job effectively and efficiently.
TASK 3
P6. PESTLE analysis which affect the development of hotel within hospitality industry
The external business environment affects the business of hotel directly or indirectly.
These environmental factors need to be analysed by the organisation in order to smooth
functioning of business. As factors are discussed below in context to IHG hotel:
Political:
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Political factors are those which are related with political stability, rules and regulation,
trade barriers and tax policy which is changed according to the change in political condition of
country. As if government increases the service tax than the profitability of IHG hotel will be
reduced and affect overall development of organisation.
Economic:
Economic factors are related with economic growth, GDP, interest rate, inflation rate and
unemployment in nation. As UK has high inflation rate so this will rise price of goods and
services of IHG and customer might shift to other hotel.
Social:
This is a factor which make directly impact on the development of hotels. As this is
related with the age, taste and preferences, demographics and customer’s needs. The customer
needs are changing very frequently if IHG is unable to meet customer needs than this can affect
overall development of hotel.
Technological:
In this dynamic world technology is changing very frequently and hotels should adapt the
technology very promptly in order to be sustainable in business environment. IHG can introduce
the new robotic delivery system to their guest as it will give customer experience a new
technology. This can be very helpful for development of overall business of organisation
(Köseoglu and et.al., 2013).
Environmental:
This is related with climate, weather change and environmental condition. As bad
surrounding of IHG hotel can make negative impact on their customer mind.
Legal:
The hotel needs to follow legislation which governed by government. Non following of
these laws can impose huge penalties on the hotel.
P7. SWOT analysis for IHG
This refers to identify the strength and weakness and according to that prepare the
strategy. Assessment of strength and weakness enables organisation to take decision accordingly.
The SWOT of IHG is below:
Strength Weakness Opportunities Threat
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 The company has
strong brand name.
 Presence across the
world.
 As hotel has
enough fund to
spend on their
functions.
 Strong sales
network through
internet, travel
agents and retailer
etc.
 More reliability
on the hotel
sales in
hospitality.
 Due to
recession
revenues are
decreasing.
 Diversity of
hotel locations
and cultures so
difficult to
manage.
 Use more of
social media
platform to
generate more
sales.
 Opportunities
in emerging
regions such
as Asia
Pacific.
 Currency
fluctuation
 Uncertain
market
condition.
 As
aggressive
marketing
from
competitors
such as
Marriott
hotel.
The company has main strength that it has enough financial resource and to market its
product IHG can use this and attract customers.
D3. External factor impact on the current and potential trends.
There are current and future trends in the hospitality industry which can b helpful for
shaping the business in hospitality trends. As these trends are affected by the external factor of
business environment. The future trend in the hotel will be sell story not a room. The technology
advancement is the new trend as this trend is affected by technological factors. IHG can bring the
new technology of Robotic delivery system for their guest.
TASK 4
P8. Implication of current and potential trends in hospitality industry.
Trends refers to the certain style in the business which could helpful in the development
and growth of business. There are some current and potential trends in hospitality industries
which are discussed as below:
Virtual reality:
This trend is becoming very famous now days in the industry. The IHG should provide
the view of their rooms and hotels on their website which gives the visitors a seamless
experience so they can book the hotel (Kandampully, Zhang and Bilgihan, 2015).
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Create unique and local experience:
The travellers always try to find the native experience when they travel. As IHG hotel can
make tie up with the local vendors and travel companies to meet the need of customers.
Focus on direct booking:
This is also very popular current trend in the hospitality industry. The travellers and guest
used to book online through various websites. As IHG needs to do tie up with some kind of
website in order to give facility of direct booking to their customers.
Changing customer lifestyle:
It is a basic trend in every industry and it affect the overall business also. As customer’s
lifestyle is keep changing according to their living of standard. So IHG need to analyse current
lifestyle of customer in order to provide the customized services.
Potential trends:
The potential trends in the hospitality industry is digital revolution in providing services
such as:
Robotic delivery to guest:
As this trend will make revolution in the hospitality industry. The robots are used by
different manufacturing units to carry out the raw material from one place to another within the
premise only. In hospitality industry, the IHG should come up with this technology in order to
deliver the ordered food and other services to the guest at their doorstep. Employees and staff
will have more time to dealt with customer’s issues in the hotel and solve these issues (Jones,
Hillier and Comfort, 2016).
M5. Evaluation of ability of IHG to meet current trends
This is very important for every organisation in order to meet the current trends and
provide to the customers. As these trends are very helpful for attracting customers and satisfy
their needs and demands. IHG hotel can provide these services to the customer in order to meet
current trends. The hotel has enough financial and non-financial resources to adapt the changing
lifestyle of customers and provide them customized services.
CONCLUSION
In the conclusion it can be said that there are various types of business within hospitality
industry and they have different products and services. Operational and functional departments
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are there in the hospitality business in order to provide valuable services to the guest. The
industry is contributing to the local, national and international economies by creating
employment opportunities. There is some current and anticipated skills required for performing
hotel operations effectively. The internal and external factors make impact on the business. The
current and potential trends are affecting the development.
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