UK Hospitality Sector Analysis: Cox & Kings Case Study

Desklib provides solved assignments and past papers to help students succeed.

The Contemporary Hospitality Industry
1

Table of Contents
Introduction..............................................................................................................................3
LO1..........................................................................................................................................4
LO2..........................................................................................................................................9
LO3........................................................................................................................................12
LO4........................................................................................................................................16
Conclusion.............................................................................................................................18
Reference List........................................................................................................................19
2

Introduction
The study shall be focussed upon identifying the contemporary trends of the hospitality
industry in UK. In order to fulfil the objectives of the study, the existing business environment
of the hospitality industry shall be examined as well. Here, Cox & Kings Ltd. has been
chosen as the relevant organisation within the hospitality sector of UK. The organisation
operates across 22 countries in four continents. Its headquarters is in UK and over the past
decades it has been successfully attracting global customers. It provides leisure, travel as
well as educational services worldwide. The organisation is considered as one of the
members of “World Travel and Tourism Council” (WTTC) (CoxandKings, 2019).
In case of domestic tourism, Cox & Kings provides a range of services such as education
tours, beach retreats, experiential holidays, pilgrimage tours, activity holidays, budget
holidays as well as coaching holidays. Additionally, it provides outbound tourism and the
company is considered as one of the largest options within the hospitality sector. Some of its
hallmarks include innovative marketing strategies, pricing strategies as well as packaging
services. In case of business travel, the company provides high quality corporate travel
offers that attracts large corporate across the world.
3

LO1
P1 Explore the different types of business within the hospitality industry and the
diverse products and services they offer
The hospitality industry is broad in nature and therefore it provides an array of services and
products. The services are primarily given in the areas such as food, accommodation,
lodging, event planning, cruise lines, transportation and many others. The industry is
considered as “multi-billion dollar” industry. Further, its growth primarily depends upon the
satisfaction levels of the customers and disposable income of the region in which the
hospitality organisations are currently operating (Net, 2017). Here, the diverse types of
services provided by the industry has been outlined-
Tourism and travel services- The travel services mainly focuses upon dealing with
services related to transportation via ships, trains, planes or cabs. The term “leisure travel”
would be appropriate to use in this context and people tend to spend money on exciting
vacation trips or recreation activities. The large hospitality organisations also operate certain
travel agencies, which arrange various vacation trips. Moreover, there are people who
require services for business travel. Hence, the hospitality industry tends to encourage
individuals to travel because the industry is benefitted when people spend money on leisure
or business related travel.
Food and beverages- The hospitality industry is benefitted by providing food and beverage
services. The F&B services are considered as one of the leading segments of the industry
and it is directly linked to customer satisfaction and customer retention. The primary services
under the F&B segment include meals, beverages, and snacks for consumption. It should be
noted that whenever a restaurant operates under a large hotel, then one of the primary goals
of the hotel is to enhance the overall experience of the guests (Davis et al., 2018). It is
mainly done by providing high rated food services to the customers. Symbolically, it
functions as a major part of the hospitality business.
Accommodation or lodging services- Another crucial segment of the hospitality industry is
the “lodging” services. It provides a staying place for the guests who arrive for either leisure
or business activities. Accommodation can be provided for more than a night and the range
of places mainly includes fancy hotels, motels or youth hostels. The prices depend upon the
needs of the customers. For instance, there may be “long-stay travellers”, special travellers
or even budget travellers (Birinci et al., 2018). It should be noted that people that fall under
the special travellers’ category mainly comprises of people that work for the government
bodies, military or airlines.
4

Recreation services- Customers often require services that can help them in feeling
relaxed and fulfilled. In this case, they tend to prefer recreation services offered by the
hospitality industry in order to refresh their mind and body (Costa et al., 2014). The
entertainment services are in the form of movies, museums, spectator sports as well as
participatory sports.
The range of services offered by Cox & Kings Ltd. mainly includes domestic tourism, air
ticketing services, airport transport, hotel bookings, event planning and many others. Apart
from the various services provided by the organisation, the different range of products
includes safari holidays, honeymoon packages, cruise holidays and many others.
Figure 1: Services provided by the hospitality sector
(Source: Visitbritain.org, 2019)
P2 Examine a range of operational and functional departments within a chosen
hospitality business
There are a range of functional and operational departments within Cox and Kings Ltd.,
because due to the existence of these departments the organisation is capable of running a
smooth business. The core departments of the organisation has been outlined below-
Human resources- The primary function of the department is training, hiring and developing
staffs. Additionally, the HR department is also accountable for maintaining industry relations,
welfare and collective bargaining. The department is supposed to work in compliance with
legislation of the country. In recent times, the HR department is focussing upon emphasizing
training, education and development of the staff. The department is also liable for
maintaining the business lawfully.
Marketing department – The department is in charge for looking after the sales and
promotions of a wide range of services offered by Cox & Kings Ltd. It also plays a vital role
by generating innovative business ideas. The publicity of the organisation depends upon the
efforts of the sales and marketing teams. Additionally, it also maintains public relations.
Various marketing strategies of Cox & Kings Ltd are focussed upon the idea of providing
unique services and products (CoxandKings.com, 2019). Therefore, it can be stated that the
organisation follows the “differentiation” targeting strategy. The department is also
5

responsible for establishing the position of the organisation within the competitive hospitality
industry.
Finance and Account department – The primary role played by the finance department is
monitoring of a range of finance related activities. For instance, the organisation carries out
accounting activities, which mainly incorporates banking, cash receipts, internal report
presentations, preparation of financial statements among others. The finance department
plays an important role because it helps in maintaining statistics and financial data. At
present, Cox & Kings is regarded as the foremost retail dealers (CoxandKings.com, 2019).
Technical department – The department is responsible for providing ticketing services to
the travellers. Apart from that, it is also responsible for providing accommodation services.
Cox & Kings also arranges exotic range of travel destinations for its customers and
consequently, it takes the help of the technical department to provide location services for
the travellers.
Consultancy department – It is responsible for providing consulting services and it mainly
includes services that are directly related to travel arrangements. The consultancy
department offers recommendations as well as advice regarding various travel policies to the
customers (Bernard, 2019). It plays a vital role by understanding the needs of the travellers
and offering services that suit their requirements.
Figure 2: Logo of the chosen organisation
(Source: CoxandKings.com, 2019)
P3 Discuss the contribution of the hospitality industry to local, national and
international economies –
The hospitality industry plays a crucial role by contributing to the economy of the country in
which it is presently operating. The hospitality industry in UK approximately contributed
around £ 41 billion to the local economy in 2018. It also makes a major contribution locally
by employing more than 2.4m people. Hence, it is crucial for local authorities to acknowledge
and understand the crucial social and economic role played by the hospitality industry.
6

Additionally, the industry acts as an economic driver and supports development and growth
of the region. It has been further noted that there is a great potential for job creation and the
industry has been developing its area by providing new employment opportunities.
Input to local economy- The hospitality industry is considered as one of the pillars that
created jobs and wealth for the local economy of UK. The contribution is not limited to cities
and towns but it has also spread across the country. A local economy is considered
economically successful when it can meet the basic needs of its habitants. The industry has
a multiplier effect upon the local economy of UK. It is estimated that by 2025, the industry
will contribute around £ 324 billion, which in turn represents almost 12% of GDP of the
country (Visitbritain.org, 2019).
Contribution to national economy – As per recent reports, in the year 2017, the hospitality
industry in UK has been considered as one of the “3rd largest” employers as it generated
direct employment. The industry has also generated more than £ 72bn of GVA to the
national economy (Ukhospitality.org.uk, 2019). Due to the economic downturn experienced
by the industry in 2008-09, the employment rate has reduced considerably. However, now
the industry has recovered from it and therefore, it can be assured that the industry is being
benefitted by generating employment.
Contribution to international economy- On a global scale, the hospitality industry makes a
huge contribution because according to recent reports, the industry contributes around 9% of
GDP globally. In particular, countries like Egypt and South Africa has been experiencing a
continuous growth economically. It should be noted that due to the presence of exotic travel
destinations, the hospitality industry of UK has been able to expand internationally. The
industry further creates demands from various institutional investors. Recently, a trend has
been emerging which is centred on acquaintance of major hotel management platforms.
There has been strong intensification of global lodging services and this in turn have become
a basis for launching innovative hotel brands. The global economy has been benefitted
because jobs have been created by the industry in areas of marketing, delivery and
customer services. Under the hospitality industry, the tourism sector has further made huge
contributions because whenever people travel to new and exotic locations, they tend to seek
recreation, historical knowledge of the destination, memorable experiences and
entertainment services. All these factors collaboratively help in raising the global economy. It
has been roughly estimated that that around 1 in 10 people on this planet are engaged with
the tourism sector (Salvioni, 2016).
7

Figure 3: Number of tourism economy jobs within hospitality industry
(Source: Visitbritain.org, 2019)
8

LO2
P4 Investigate a range of different operational roles within the hospitality industry
The hospitality industry is wide and it mainly covers areas such as travel-tourism,
restaurants, recreation and lodging. Hence, it can be stated that there are an array of
operational roles performed by individuals in the above-mentioned areas. Most of the jobs
within the hospitality sector require the employees to interact with customers in a face-to-
face manner. The primary operations within the industry include food services,
housekeeping, finances, marketing, sales and security.
Customers usually expect generous behaviour from staffs and here an important role is
played by the front office. It mainly refers to some physical area where staffs are
responsible for serving customers. In the front office, the waiters and hosts play a crucial role
by welcoming and interacting with visitors or travellers. Hence, they are also referred to as
“visible representatives” (Robinson et al., 2016). On floor, these individuals should dress
neatly and must be informative enough for the guests.
The finance manager plays another crucial operational role. Here the manager looks after
the growth factors of the business. They tend to look after the expenditure and cash flow and
accounts of the business (Lashley, 2015). Financial management also requires managers to
look after the wages or salary hike of the employees. By managing the financial department,
it is easier for the managers of the hospitality sector to run the business openly. In order to
become a successful business owner in this sector, it is essential to provide excellent
services to the customers. Hence, the industry is focussed upon creating a guest-friendly
atmosphere. Additionally, passenger services are also provided within this sector. For
instance, staffs provide services for customers in cruise ships, trains as well as coaches
(Khan et al., 2017). The primary aim is to assist people during their trips. This, in turn, helps
customers feel comfortable.
Similarly, it has been investigated that tour guides and tour operators’ plays a crucial
operational role by arranging memorable travel experiences for the guests. However, these
roles are unique because it is only applicable in case of adventure tourism within the
hospitality sector. In order to play this role, it is essential for managers to hire people with
specialist skills and people-pleasing personalities.
Lastly, the HR manager plays a significant role that is directly related to employment
matters. People tend to join the hospitality workforce because it provides desirable career
options. The HR manager is responsible for recruitment of skilled labourers who can work as
chefs, housekeepers, bartenders and assistant managers within the organisation. After
9

hiring the individuals, the manager is responsible for deciding the compensation benefits for
the candidates. The employees have good scope to make money through tips as well. As
per the investigation of ISHC, it is crucial to offer employees bonuses because it tends to
raise the overall productivity of this “labour-intensive” industry (Sheehan et al., 2018).
Figure 4: Skills required within the hospitality sector
(Source: Bhms.ch, 2019)
P5 Examine the skills required for roles within the hospitality industry and current
skills shortages
In order to become an effective HR manager within the hospitality sector, it is essential to
possess certain skills and qualities. For instance, the potential candidate should possess
good verbal communication skills because the person is responsible for interacting with
seniors and subordinates. Communication skills can help the managers in resolving conflict.
Since the industry is customer-centric, conflict situations is bound to occur (Solnet et al.,
2016). The manager should also have relevant work experience as an assistant manager
because they should have knowledge regarding conducting interviews and labour-related
legislations. Additionally, the person responsible for looking after the finance or accounts
related issues should also possess certain industry specific skills. They are primarily
responsible for interpreting budgets and preparing reports and therefore, these individuals
must possess good critical analysis skills. They must also be able to develop “long-term”
business plans and therefore, they must have foresight and decision-making skills.
Additionally, the front staffs employed within the front office is conscientious for identifying
the requirements and demands of the customers and therefore, these individuals must be
10

good at multi-tasking. The staffs those are able to deal with multiple needs of the customers
are more likely to receive tips from them. The employees working within the hospitality
industry should also have industry awareness and consideration to details. This is because;
customers tend to judge the behaviour of employees at every second and in order to build a
rapport with the customers, it is necessary to pay attention to details (Reilly, 2018). Lastly,
industry awareness can help employees remain up-to-date with the requirements and
changing demands of customers.
The recent skill shortage within the industry has been a threatening feature for the hospitality
industry. Especially, due to the blow of Brexit, UK’s hospitality industry has faced a downfall.
Overtime, the hospitality business within UK was depending upon the skills of EU citizens
and the services of the people were essential for the sustainability of the hospitality
business. However, in recent years, the industry is mainly concerned regarding skills
shortage in the future. The people who previously decided to come to Europe in search of
employment opportunities in different hotels or restaurants are now doubtful. Further, people
are also strained to leave the country due to the impact of Brexit. One of the primary reasons
behind skills shortage is “pay decrease” and longer working hours (Eads, 2019).
Consequently, staff turnover is also high in this industry. Within 2020, it is necessary for the
industry to recruit more than 215,000 skilled staffs (Ladkin and Kichuk, 2017). Due to
shortage of skilled staffs, it has been examined that workload has been felt by existing staffs.
Hence, it can be stated that continuous training is essential to attract and retain skilled
workers. This in turn can help in filling the skills gap.
11

LO3
P6 Assess the political, economic, social, technological, legislative and environmental
factors that affect the development of organisations operating within the hospitality
industry
The PESTLE analysis will be discussed as per the impact of the UK market forces in the
travel company Cox & Kings. This will be done to assess the understanding of the various
elements that might affect the business operations of the company.
Elements Factors Analysis
Political The main factors that can
affect the growth of the travel
company are BREXIT, tarrif
rates and trade control.
The travel industry will be
affected by BREXIT as there
will be trading divides and
tariffs practiced by the
government in UK (Sammut‐
Bonnici and Galea, 2015).
UK has the stable economy
but the political situation of
the country can affect the
industries.
Economic The economic elements that
would affect the travel
industry are the inflation
and recession rates, GDP
and so on.
The economic elements of
the travel company in UK
would be affected by the
fluctuations in recession
and inflation rates. The
contribution of GDP would
simmer down due to the
policies that are associated
with growth of the company.
Social The social elements that
influence the business are
lifestyle, consumer buying
practices and average
disposable income.
With the changes that are
witnessed, in the UK the
consumers are subjected to
fluctuating decision-
making habits. The
average disposable income
would witness a degradation
12