Hospitality Industry Analysis: Structure, Issues, and Trends

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THE NATURE AND STRUCTURE OF THE HOSPITALITY
INDUSTRY AND EMERGING ISSUES AND TRENDS
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Table of Contents
Introduction......................................................................................................................................3
P1 The current scope structure and size of the hospitality industry................................................3
P2 the operational and functional department of Hilton hotel.........................................................4
P3 the contribution of the hospitality industry to local, national and international economies.......5
M1the interrelationship in the operational and functional department of the hospitality industry. 6
M2 Effects of franchising and licensing agreements global development of the hospitality
industry............................................................................................................................................6
D1 The ways Global growth, franchising and licensing develops have contributed to the
economic growth of the hospitality industry...................................................................................7
P4 Operational roles within the hospitality industry.......................................................................7
P5 the required skills in the hospitality industry and skills shortages............................................8
M3 The skills gaps in relation to a range of different operational roles in the hospitality industry9
D2 The impact that skills gap have on the hospitality business and make a valid solution for
addressing the skills gap................................................................................................................10
P6 effect of external factors and internal factors on the Hilton hotel............................................10
P7 SWOT Analysis of Hilton Hotel..............................................................................................11
M4 The impacts of external factors on the hospitality industry...................................................12
D3 The ways external factors impact on current and potential trends and development in the
hospitality industry for industrial response development..............................................................13
P8 Implications of current and potential trends in the hospitality industry...................................13
M5. The ability of specific hospitality business to develop products and services to meet current
trends..............................................................................................................................................14
Conclusion.....................................................................................................................................14
References......................................................................................................................................16
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Introduction
The hospitality industry is considered as one of the strongest reasons behind the current
economic growth of the United Kingdom. The contribution of the hospitality industry changes
according to the current and potential trends to increase its economic growth of the organisations
and the country. In this assignment, the large hospital organisation Hilton Hotel is selected for
understanding the nature and structure of the hospitality industry and emerging issues and trends.
P1 the current scope structure and size of the hospitality industry
Hospitality Industry: The term Hospitality Industry embraces a group of businesses which
provide the customers with service and comfort. This industry is a prosperous industry. The
expansion of this industry is greatly relying on the high income and leisure time of people
(hilton.com, 2019).
This multibillion-dollar industry has four broad sectors blooming within it. These are:
·Accommodation and Lodging
·Food and beverages
·Travel and tourism
·Recreations and attractions (Abbott, 2015)
1. Accommodations and Lodging: Resorts, hotels, motels, cruises, bed and breakfasts,
inns, serviced apartments are included in this sector providing the customers with comfort and
rest.
2. Food and beverages: Various restaurants have emerged to support this sector.
Customers or visitors are provided with delicious and healthy foods by these places. With the
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help of this sector, some other businesses like catering, full-service restaurants, fast food centres
etc have emerged.
3. Travel and tourism: This is a large sector of this industry including other several businesses
like transport, travel agencies, tours guiding etc. This sector provides the people service relating
to transports. Trains, airlines, cruises, ships and many more are the transports which make the
journey of people comfortable (Dzhandzhugazova et al. 2016).
4. Recreation and attraction: Recreation is something hospitality industry provides mainly.
This includes nightclubs, bars, events etc. These attractions turn the leisure time of the tourists
entertaining.
P2 the operational and functional department of Hilton hotel
In a hospitality business, there are several functional departments and operational departments.
The functional departments are Executive, Front desk, Housekeeping and maintenance,
Accounting and marketing, kitchen stuff. Here executive takes care of the valuable decisions.
Front desk employees help in contacting the guest, their needs and maintain good customer
service. Housekeeping maintains the hotel rooms and maintenance supports the housekeeping by
solving problems. Accounting helps in managing profits and loss and keeps the condition up to
date. Marketing helps in developing the business through different policies and last the kitchen
department helps to keep the orders maintained in time. Hilton hotel maintains the exact
operational structure for maintaining the business.
The process of a business divides according to different functions. Those are functional
department. In a hospitality management business, there are a few functional departments such
as human resource, marketing and promotion, customer service support, sales, accounting etc.
each department has a different function (Jogaratnam, 2017). The human resource management
team works on the employees and the workplace environment. Marketing and promotion is a
team where the team is concerned about the promotions, collecting more customer through
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different ways like social media advertising and other ways. Customer services take care of the
proper administration and make the guest happy with their services. Sales make sure the
maximum sale from the business and channelize to the profit whereas the accounting department
takes care of the business statistics and helps in decision making. Hilton hotel has the best
function management stuff than other industries which is causing growth.
These are all the departments working in an organisation or hotel. The operational department
and functional department are interrelated. The operational departments take care of the
operations and make the functional department channelize the work towards their goals and
helps in increasing the profit.
P3 the contribution of the hospitality industry to local, national and
international economies
The hospitality industry has contributed a lot to the economy. Every country in the world wants
to be known for good services to attract visitors and increase the profit and also the state of the
country. The industry has contributed to the local, national and international economy.
Due to the hotel industry, there is much employment in the local economy. Other than services,
various departments need employee power. As a result, it is increasing employment, increasing
tax revenue, capital investments, sponsorship etc.
In the national economy also, there a contribution of the hospitality industry which is increasing
GDP. In last year's GDP has been increased by 10% that is a national economic profit due to the
hospitality industry (Jones, Hillier and Comfort, 2016).
In recent years the hospitality industry has been increased drastically which helps to contribute to
the international economy. In the year 2017, the hospitality industry contributed around US$2.6
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trillion to the world economy. This industry gave 119 million employees in the world. This helps
in developing a country state and lives well.
Currently, businesses are doing franchising and licensing agreements which has a major effect on
the business. The advantages are the risk of business failure reduces, The industry will establish
a market share automatically. There are many more advantages that the franchising and license
agreement gave to global development (Kandampully, Zhang and Bilgihan, 2015).
M1the interrelationship in the operational and functional department of the
hospitality industry
In an organisation, the operational departments maintain the major operations and basic teams. It
includes different departments such as maintenance, housekeeping, executive and accounting and
marketing. These departments deal with different functions. Each department is dealing with
own functions such as marketing is dealing with the company promotions and different sectors
which can help in advertising for the organisation. Like this different operational team, have
different functions. Hilton hotel has different operational team, which is dealing with different
functions. This is how an operational unit and functional unit are interrelated to each other (Kara,
2018).
M2 Effects of franchising and licensing agreements global development of the
hospitality industry
Franchising and licensing agreements have helped the hospitality industry go wild and big. There
are a series of advantages.
1. Relationship with the supplier is good as it is an already established company.
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2. The risk of business factor is always controlled for the franchising as it can help in analysing
the situation and then commit.
3. The services have already taken a market share, which is beneficial.
4. No prior experience is needed.
5. The franchise allows small business to fight with big business (Kim, Vogt and Knutson,
2015).
This is how the license agreement and franchising are influencing the global development of the
industry.
D1 the ways Global growth, franchising and licensing develops have
contributed to the economic growth of the hospitality industry
The economic growth of the hospitality industry is not only related to the increasing production
there is a huge contribution to global growth, licensing and franchising. The trend of
globalisation has totally changed the pattern of business of hospitality industry. The development
of the international licensing system, franchising with other Organisation in the international
boundaries and the Global growth has impacted on the business activities of hospitality
organisations like Hilton Hotel. The contribution of the government of the United Kingdom and
the several trading treaties made by the government has influenced the economic worth of the
hospitality industry (Peters and Kallmeyer, 2018).
P4 Operational roles within the hospitality industry
In every hospitality there are a few key functions that have to be provided by the industry, which
are:
1. Good customer service.
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2. Maintaining bookings.
3. Provide quality service to the customers.
4. Managing the customers properly etc.
These are the key functions of any hospitality industry. Hilton hotel is a very well-known hotel
and luxurious. The services have to be great. According to the customer feedback, the hotel is
super polished and the services are great (Rastogi and Trivedi, 2016).
In a hospitality business, there are several operational roles. To keep the organisation run
smoothly, there needs to some areas, which have to be maintained properly. The areas are
Executive role is where they make the decision about the betterment of the company. The
organisation is best at it.
Front desk role where the employee's contact with the guests, maintain the proper handling of
different bookings and maintains the relationship to make the customer service better. Hilton
hotel has the best stuff.
Housekeeping and maintenance roles maintain every room cleaning and tidiness inside the room
for providing a better experience. The maintenance supports the housekeeping to take care of the
tech problems in the hotel as this can be damaged and makes sure everything is done. Hotel
Hilton is the most sophisticated and clean (Sherman, 2011).
Accounting department takes care of the expenses as well as tracking the profit and losses to
keep a track on the business. Marketing department helps to improve the business by accepting
new technology and ways like social media marketing and content marketing. This department
helps in spreading the brand message. The organisation has high promotions and marketing.
That’s why the hotel is generating this much huge popularity.
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P5 the required skills in the hospitality industry and skills shortages
For every kind of business, there is a certain skill requirement. The hospitality industry deals
with people from a different community. So to deal with them and to impress them there is a
certain skill requirement.
1. Commitment is the key skills that have to be present in the hospitality industry.
2. Interpersonal skill helps to coordinate with the customers.
3. Problem solving skill is a must-have in the industry as working with people is critical work
and there will be problems definitely.
4. Teamwork is a skill that has to be perfect to make the entire process of a hotel go smoothly
without any complains (Sun and Lee, 2019).
These are the ideal situation skills in a hospitality organisation or hotel. But the employees
mostly lacks in teamwork which makes huge problems in managing huge customers.
Communication skill problem is also being a shortage in the current days. Majorly these are the
shortage of skills which affects the hotel business the max.
M3 the skills gaps in relation to a range of different operational roles in the
hospitality industry
There are different skills needed in order to maintain an ideal situation in an organisation. But
the ideal is just a myth. There are some skills that are important in the hospitality industry which
is already discussed. but in real the skills are not present 100% in the employees which are
creating the skill gaps. The communication gap is affecting the executive level to understand the
problem and the front office staff who maintains the guest relation. Then the next gap is in
commitment. The employees are sometimes a bit careless that affects the customer service
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department and then it creates a problem for the operational team to manage the situation
(Zoghbi-Manrique-de-Lara and Guerra-Baez, 2016).
D2 the impact that skills gap have on the hospitality business and make a
valid solution for addressing the skills gap
The hospitality industry is totally known as a service providing industry. However, the product
manufacturing industry is focused on improving the quality of the products for increasing
customer demand and improving production and profitability. But the scenario for the hospitality
industry is totally different; the employee skills are counted as the most influential aspect for
improving the business of hospitality. Therefore, the skill gap of each employee is counted as the
creation of challenging situations for hospitality organisations like Hilton. The skill gap needs to
be reduced by the hospital to the organisation by focusing on providing continuous periodical
training to their employees. This training has to be associated with both interpersonal and
technical skills (Abbott, 2015). The contemporary business need of hospitality industry focuses
on high knowledge on technological infrastructure use. Besides that, the interpersonal skills will
help the employees of the hospitality industry to provide quality services.
P6 effect of external factors and internal factors on the Hilton hotel
Hilton Hotel holds an important part of the hospitality industry in the UK. The performance of
this hotel can be analyzed by the PESTEL framework.
1. Political factors: UK had been temporarily marked as a country that accommodated a
group of extremist religious organizations through the Acts of Terrorism in London. This
affected the performance of this hotel negatively as the visitors were decreasing in number in
London. Hilton has spent more than USD 1.5 million for lobbying in the last 4 years.
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2. Economic factors: During the Olympics in 2012, Hilton hotel were greatly affected since
all the hotels were occupied at this time. Sales of Hilton hotel went down by 20% as the
result of the financial crisis of 2007 to 2009. Because of the stability of the UK economy, the
worldwide recession could not affect Hilton hotel's business much. It accelerated the growth
of this business by boosting the revenues of the hotel industry (Dzhandzhugazova et al.
2016).
3. Social Factors: Hilton hotel's performance supports some of the charity organizations
which leave a positive impact on this business. As a result of the Green initiative, the country
has decided to utilize the environment-friendly products and services which eventually attract
the visitors to this place. Consumer lifestyle, health and safety are the part of the industry.
4. Technological Factors: Technological advancements have impacted their performance
positively. Hotel bookings, checking other visitor's feedback etc has become easier for it.
Social Media and Websites like Tripadvisor have made the whole process easy for both the
visitors and the concerned Hotel.
5. Environmental Factors: The Govt. of UK is concerned about the sustainability of the
environment. This has helped Hilton Hotel and Industry to go ahead in the competitive
environment. Visitors are more likely to prefer to receive service from this kind of Hotel who
cares about the environment.
6. Legal Factors: Some of the legal factors like cancellation of Visa have impacted the
number of visitors negatively. The ‘Contract Law’ enforced by the Govt. has explained the
restrictions on Hilton hotel. However, this hotel complies with all the legal measures which
show a green signal for the success of it (Jogaratnam, 2017).
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P7 SWOT Analysis of Hilton Hotel
The SWOT analysis will be a great way to analyze the success of Hilton Hotel.
1. Strength: Location and strong market position are some of the strengths of the Hilton
Hotel. Hilton holds a good reputation in the UK. Technological advancements have made it
popular among visitors. Successful customer and employee retention schemes play a major
role in their success.
2. Weaknesses: Some Govt. policies have negatively impacted the performance of it. It
does not have much global market share. Till now the service is only targeted towards the
rich people and the performance of this hotel is very much dependent on the US market.
3. Opportunity: Some of the necessary plans such as more digitization, expansion of the
market, providing better and low priced service, increasing market share are the future
opportunities of this hotel. It also will be focusing on research works. Hilton hotel has high
potential in the emerging markets around the world (Jones, Hillier and Comfort, 2016).
4. Threats: As a result of political turbulence, terrorism, issue related etc. the growth of it
has become stagnant. Numerous International brands have entered into the markets which
stand as challenging competition to the Hilton hotel.
M4 the impacts of external factors on the hospitality industry
Hilton hotel has faced many problems politically as it is already explained in the pestle analysis.
The external factors are being negative for the organisation as the number of traveler to London
is decreasing for the terrorist threat in London. The social factors are being a bad effect for the
organisation as people are being more environments friendly and for that, the company had to go
through different changes to make the place acceptable for the visitors. The technological
improvement has increased the sales of the business, as people are being more into the internet
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