HAT203 Report: Analyzing Current Issues in Hospitality & Tourism

This report identifies and analyzes key issues in the hospitality and tourism industry, focusing on the challenges of maintaining an agile workforce and managing budgetary constraints. It examines these issues within four major contexts: human resource management, operational management, financial management, and product and market management. The report highlights difficulties in retaining qualified workers due to low wages and varied shifts, the high costs associated with maintaining luxurious facilities, the financial challenges of continuous upgrades and licensing, and the impact of political, social, and environmental factors on marketing strategies. The analysis emphasizes the need for effective workforce planning, cost management, and adaptive marketing to address these prevailing challenges. The report uses at least 8 sources of information that are referenced in accordance with Kaplan Harvard Referencing Guide.

Current issues in hospitality and tourism industry
“Current issues in hospitality and tourism industry”
Research in Business
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Current issues in hospitality and tourism industry
Table of Contents
Introduction.........................................................................................................3
1.1 The human resource management context..........................................3
2.1 The operational context.........................................................................3
3.1 The financial context..............................................................................4
4.1 The product and market context..........................................................4
References............................................................................................................6
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Current issues in hospitality and tourism industry
Introduction
The report aims to focus on the two key issues prevailing in the tourism and
hospitality industry. The two issues are “Having an Agile Workforce” and “Budgetary
Constraints”. The study focuses on four major aspects: The human resource management,
Operational management, financial and the product marketing management.
1.1 The human resource management context
Managing qualified workers and Managing Training Programs with Budgeting:
One of the major challenges faced by the hospitality and tourism sector is attrition of
the labours. It is witnessed that because of low wages and varied shifts, it is challenging to
retain the qualified and skilled workers. The industry has labour turnover of almost more than
5% every year. The work environment globally is not the same in the industry. Local culture
and language affect the recruitment of the people in this industry as communication remains a
key factor in Hospitality. Moreover, skilled employees tend to go to the managerial white
collar job; hence we have less qualified people on the field job in Hospitality which may
hinder the reputation of a brand or a place (Swaleh, 2018).
Training is also considered as one of the most prevailing issue in the industry. As
there is a high turnover, employees are sent to the field for the work before conducting
training. The industry faces losses if they tend to train each and every employee in the
industry due to budgetary constraints. The HR here tends to fill the position first rather than
focusing on the skills of the candidate. Hence, untrained people cannot run the department in
a way that qualified and trained employees can. The HR department worldwide is taking
appropriate actions to minimise the issue that prevails in the industry by giving incentives and
boosting the overall morale (Boum, 201).
2.1 The operational context
Operating costs (Budgeting) and agile methodology of workforce
The operating cost of this industry has been high because they have to be well
equipped with all facilities and luxurious services. It involves million dollars to renovate and
maintain them. The costs are increasing every year or two; revenue may not increase with the
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Current issues in hospitality and tourism industry
same proportion. The hospitality industry must have a luxurious image every time in order to
retain the old customers and attract new clients (Jones, n.d.). This leads to have more
operating cost for the company. Also, the processes in hospitality need to work in agile
methodology (workforce planning for each set of operational tasks) rather than traditional
serial methodology (Sanjeev, 2012).
3.1 The financial context
High financial cost and investment, decreasing profit margin and resources’ skill
allocation budget
Based on the literature review, it was found that the industry faces several working
capital issues and licensing issues. To maintain and retain customer expectation, one needs to
continuously upgrade their services and products which lead to have working capital issues.
However, to establish and innovate in this industry, we not only need money to invest in
construction but also need to deal with legal processes and service tax. Each and every
country has its different taxation policies, such as India levies almost 20% taxation on such
services in form of GST, since hospitality function falls under citizen luxury segment.
Moreover, it has complex and lengthy procedure for applying and getting the licences
approvals (Sanjeev et al., 2012). As we know that, there has been an increase in competition
in the industry especially for corporate event or trips. Due to competitiveness in the market,
clients expect to have lowest rates possible from hospitality players and this leads to
decreasing profit margin. With that, we also have to provide better facilities to promote our
business in the market and to facilitate better customer experience. High investment costs are
bringing the salaries of employees down and hospitality companies are finding difficult to
allocate budget for employees’ welfare and skills (Blackburn, n.a).
4.1 The product and market context
Current affairs, service cost competitiveness and demand of skilled agile labour:
Political and social factors affect the tourism and hospitality industry of a country. For
instance, if the country is affected by rogue elements such as riots, unstable environment or
terrorism activities, people tend to avoid visiting those places. Each and every person wants
to be safe and enjoy wherever he or she goes with or without family. If the country policies
are favourable and friendly then it will boost the business of tourism and hospitality. Security
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Current issues in hospitality and tourism industry
and safety are the crucial aspects which will be looked upon by any traveller. Additionally,
climate change is also one of the essential factors which arise while marketing the product in
particular industry. It is essential for a marketer to prepare the marketing campaign that will
target the specified target market (N.A, 2018). Reaching the huge population worldwide is
not a big issue but conveying your message to specified individuals (customization) within a
particular age group is becoming quite a challenge, such as marketer who wants to sell the
product of solo trip, tend to target individuals who like to travel alone and wants to
experience new places with new people. Marketing tactics should be accurate enough to be
able to convince the targeted audience and be able to attract those customers towards your
firm even in case of fierce competition (S.Praveen, 2015). Hospitality industry looks into
service cost and budgetary competitiveness more than product competitiveness. There is a
high demand of skilled labour in the market but few organizations are able to leverage an
agile workforce.
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Current issues in hospitality and tourism industry
References
Blackburn, J., n.a. Financial Management in the Hospitality Industry. [Online] [Accessed 22
April 2019].
Boum, T., 201. Issues Related to Human Resource Management in the Hospitality Sector.
[Online] Available at: https://www.managementstudyguide.com/human-resource-
management-in-hospitality-sector.htm [Accessed 21 April 2019].
Jones, P., n.d. Operational issues and trends in the hospitality industry. International Journal
of Hospitality Management , 18(4), pp. 427-442.
N.A, 2018. 4 CHALLENGES FACING HOSPITALITY MANAGEMENT IN 2018. [Online]
Available at: https://www.frontlinerecruitmentgroup.com/news/4-challenges-facing-
hospitality-management-in-2018/43086/ [Accessed 21 April 2019].
S.Praveen, D., 2015. Marketing and HR Issues in Hospitality Industry. Indian Journal of
research, 4(4), pp.4-7.
Sanjeev, G., 2012. Financial challenges in the Indian hospitality industry. Worldwide
Hospitality and Tourism Themes , 4(2), pp.163-73. [Accessed 21 April 2019].
Sanjeev, G.M., Gupta, K. & Bandyopadhyay, R., 2012. Financial challenges in the Indian
hospitality industry. Institute for International Management and Technology, 4(2), pp.163-73.
Swaleh, S., 2018. Human Resources Issues in the Hotel Industry. [Online] Available at:
https://www.ehospitalitytimes.com/?p=8396 [Accessed 2 April 2019].
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