Hospitality Industry Analysis: InterContinental Hotel Group Report

This report provides a comprehensive analysis of the contemporary hospitality industry, using InterContinental Hotel Group (IHG) as a case study. It begins with an introduction to the hospitality sector, highlighting its significance in economic development and the various services it encompasses, such as restaurants, bars, lodging, and resorts. The report then examines the different types of businesses within the industry, including their merchandise and services, and explores the range of functional and operational departments within IHG, such as front office, housekeeping, finance, marketing, food and beverage, purchasing, human resources, and sales. It also assesses the contribution of the hospitality sector at local, national, and international levels, emphasizing its impact on employment, GDP, and foreign investment. Furthermore, the report delves into the use of franchising and licensing, discussing how these strategies influence the global economy and create economic value. The analysis includes an examination of operational roles within IHG, focusing on the skills required in the hospitality sector, team building, problem-solving, and customer handling. The report also addresses the skill gap in the industry and its impact, along with potential solutions. The conclusion summarizes the key findings, emphasizing the industry's dynamic nature and the importance of adapting to changes for sustainable growth. The report covers key areas such as SWOT and PESTLE analysis, and also it includes potential and current trends which meet the requirements by achieving business objectives.

Unit 1- The Contemporary
Hospitality Industry
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Table of Content
Contents
Contents...........................................................................................................................................2
Introduction......................................................................................................................................3
LO1..................................................................................................................................................3
Examine the kinds of business within the hospitality industry and the merchandise or services
they offer......................................................................................................................................3
Explore the range of functional plus operational departments....................................................4
Contribution of hospitality sector to local, national as well as at an international level.............5
Assess the use of franchising and licensing that influences global economy..............................6
Discuss how franchising and licensing create an economic worth..............................................6
LO2..................................................................................................................................................6
Range of operational roles...........................................................................................................6
Discuss varied skills required within hospitality sector..............................................................7
Assess the skill gap in hospitality industry..................................................................................7
Impact of skill gap and way to solve them..................................................................................8
LO3 and LO4 Covered in PPT........................................................................................................8
CONCLUSION................................................................................................................................8
REFERENCES................................................................................................................................8
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Introduction
Hospitality sector is a wider term that cover various aspects such as lodging,
accommodation, entertainment and lot more as it helps in development of a nation and also it
offers various services in different sectors that increase the profitability (Ali and et.al., 2018). In
addition to this, the manager adopts various changes which ensure growth and sustainability in a
marketplace. This report is based on InterContinental Hotel Group which is a popular hotel chain
headquartered in United Kingdom. It provides several services such as restaurants,
accommodation, lodging and many more and deliver fast services which grab the attention of
customers within hospitality sector. It is spread across 100 countries and has approximately 5600
rooms and it generated 462 crores revenue. This report comprises of types of business and
product or services as well the skill that are offered in hospitality sector. This report also covers
SWOT and PESTLE analysis and also it includes potential and current trends which meet the
requirements by achieving business objectives.
LO1
Examine the kinds of business within the hospitality industry and the merchandise or services
they offer
Hospitality industry is a rapid growing industry which contribute towards the economic
development of the country as it provides great opportunities to individuals to pursue their career
in various fields such as event planning, travel and tourism and many more that provide a great
path of success in their career (Cheng and Chen, 2017). It helps in generating maximum revenue
by rendering different kinds of services among their clients at a global level. The different types
of services within hospitality sector are prescribed below:
Restaurant: These are combined with hotels that provide excellent kinks of food with
different flavours and varieties such as Mexican, Italian, Chinese which fulfil the requirements of
customers within hospitality sector.
Bars: Bars are another type that most demanded by younger generations as it provides a
drastic experience to their customers as well as nightclubs which provide various services such
as DJ party, awesome decoration in accordance to customers demand.
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Lodging: This involve the guest to render with accommodation facilities and give them
sense of relaxation by meeting their criteria and also provide them with other facilities such as
laundry, hanging of DND board and so on.
Resorts: These are very common in today’s era as resorts provide other facilities like
indoor and outdoor games, spas, gym, swimming pool which boost the sales and maximise the
revenue in case of hospitality industry.
In addition to these, other services such as Wi-Fi facilities, pick up and drop facility in
accordance to time scheduled by customer, parking facilities, laundry and many more amenities
are provided by hospitality industry which provide a wonder able experience to guests especially
foreigners as they tend to generate greater income (Horng, Tsai and Chung, 2016).
Explore the range of functional plus operational departments
There are various departments working in an organisation and each has its own role and
unique style of working and obligations in a workplace. With reference to InterContinental Hotel
Group, these are presented as follows:
Front office department: These are main department which consider the major
operations of a business as they handle various aspects such as provide information regarding the
availability of rooms and other services that create a memorable experience among their clients.
Also, the front manager of InterContinental Hotel Group renders several services such as
handling customer complaints, and they are calm and politely answers the queries of guest which
create a good impression (Huang and et.al., 2016).
Household department: The household department deal with cleanliness and hygiene in
their respective place so as to generate a positive reputation. The manager of InterContinental
Hotel Group emphasises on cleanliness and proper maintenance which create a lasting
impression among the customers across the worldwide.
Interrelationship among them
Finance and marketing department: Finance is considered as the blood of business as it
involves preparation of financial statements, balance sheet, cash flow statement and many more
that depict a true picture of financial status of hospitality sector. In case of InterContinental Hotel
Group, the finance and marketing departments are interlinked towards each other as the former
provide the information regarding the financial status and involve preparation of estimated
budgets which help latter to incur expenditure on advertising and marketing campaigns
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accordingly. In addition to this, the marketing department create a strong promotion campaigns
so as to create brand awareness across the globe.
Food and beverage and purchasing department: The food and beverage department
involve in preparation of wide varieties of food and different smoothies and mocktails and so on
in accordance to demand and seasonal nature (Jiang and Alexakis, 2017). The purchasing
department of InterContinental Hotel Group make sure that they provide timely availability of
products in a right place so that they could meet the criteria of food department and also, they
deliver fast and efficient services among them which in turn increase the sales and revenue in
case of hospitality industry.
Human resource and sales department: The role of human resource is most valuable
that provide greater value proposition among their guest as they tend to hire potential candidate
and motivate and encourage their staff so that they could perform beyond their level. The
manager of respective firm could implement proper recruitment and selection procedure and
trained them so as to make them capable of handling sophisticated machines which accelerate the
effectiveness within hospitality sector. Also, the HR manager could hire the best sales team who
could assist the firm to enhance the overall productivity.
Contribution of hospitality sector to local, national as well as at an international level
Hospitality industry assist the company in rendering a major growth as it provides an
enormous job opportunity in different aspects such as wedding planner, event planning, tourism
industry and many more as it renders approximately 15% employment opportunities that gain
maximum exposure across the globe (Kim, Woo, Uysal and Kwon, 2018). Also, this improve the
living standard of people and aids in economic development of the country. The hospitality
sector is combined with different sectors such as pubs, bars, nightclubs, and resorts that help in
adding national income and per capita income of the country. This also generate giant number of
customers from different parts of the country and boost the sales and profitability within the
confines of hospitality industry. Approximately 10% of hospitality sector help in contributing
towards Gross Domestic Product which render an excellent growth and vast opportunities over a
marketplace.
The manager of InterContinental Hotel Group is planning to expand its operation in Asia
that gain maximum exposure around the globe. This would generate greater sales of a company
at an international market which provide new and innovative technology and boost the sales in
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case of hospitality sector. Another aspect such as Foreign Direct Investment provide an
opportunity as it aids foreign exchange earners to generate provide an ease in exchange of
currency that adds value to economy. Another major prospect is that infrastructure development
which boost the investment and thus drive the growth of an economy within a marketplace. Also,
the firm emphasise majorly on generating huge access of capital that ensure greater success and
growth in future.
Assess the use of franchising and licensing that influences global economy
Franchising help the firm to generate brand name as it renders a vast opportunity to
business to expand their operation through diversification and modernisation of a business as it
provides rights to sell its business among the franchisee in return for fee. This assist the firm to
grow their business at a global level (Kumar, Colombage and Rao, 2017). They help the
company to enjoy greater economy of scale and help in contributing greater success in a
marketplace. Franchising provide efficient staff and advanced technology that provide a growth
of business to ultimate level. Licensing also play a significant role in hospitality sector as it
allows the company to generate passive income and minimise the risk as it creates an easy entry
into global market.
Discuss how franchising and licensing create an economic worth
Franchising and licensing play a significant role in development of nation and help in
prosperity of nation that contribute a major success within hospitality sector. It aids in
contribution in per capita income and provide a vast job opportunity among the youth which
enhance their career. In addition to this, it also provides assistance to company to establish
different branches outside the country which in turn generate large base of customers and help in
accelerating the productivity within a marketplace. Hospitality sector provide varieties of
services such as accommodation, lodging, resort so they prefer to make use of licensing as well
as franchising to gain maximum exposure around the world and thus boost the productivity.
LO2
Range of operational roles
With reference to InterContinental Hotel Group, the several roles and obligations of operational
department are presented as follows:
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Front office department: They operate major activities as they directly deal with
customers and render them with necessary information in order to facilitate smooth operation of
business. They listen the problems and issues of clients and provide them an efficient solution in
a quicker manner and provide them with great convenience and ease (Ling, Liu and Wu, 2017).
Back office department: The back office in case of respective firm direct and monitor the
activities of staff to see that they are working in proper manner as it facilitates proper
coordination and help in accomplishment of goal within limited time period.
Food and beverage department: The role of this department is to prepare food of different
varieties with natural ingredients which gain maximum satisfaction of customers across the
globe. The senior authority focuses more on hygiene and cleanliness that develop the interest of
customers within the confines of hospitality industry.
Discuss varied skills required within hospitality sector
Skills is very necessary as it help in gaining knowledge as it is described below within
hospitality sector.
Team building skills: The leader must provide proper guidance and must develop a sense
of team spirit among team members so that they could work with zeal and efficiency
(Prud’homme and Raymond, 2016). This assist to promote positive atmosphere and develop
confidence and trust among them in hospitality sector.
Problem solving skills: This is most common skills that employer and subordinates must
have as they should have ability to cope up with pressure and work hard so that they could
increase the efficiency and effectiveness within the confines of hospitality sector.
Customer handling skills: The manager of respective firm must have customer handling
skills as it helps in rendering proper advice. The manager of InterContinental Hotel Group must
have customer handling skills for which they have to be calm and patient and help customers in
solving their queries in a best possible manner.
Assess the skill gap in hospitality industry
Skill gap affect the working procedure and also it also affects the overall operations of
the company which hamper the growth and lead to delay in decision making of a company. Lack
of communication skills as well as delay in execution of planning which hamper the growth of a
firm and affect the profitability within the confines of hospitality industry (Wang, 2016). There is
no proper coordination and cooperation which create misunderstandings and disputes among
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them. This affect the overall performance and also the staff in hospitality sector would not easily
accept the changes and also, they would not accept challenging positions which create hesitation
among them. This minimise the overall productivity and produces undesirable results.
Impact of skill gap and way to solve them
The skill gap creates a negative and adversely affect the business activities as a result
there is decline in sales and profit margins within hospitality industry (Zaitseva and et.al., 2016)
. Also, the firm should emphasise on making a proper strategy and must render an effective
training among their staff so as to accelerate their skills and knowledge which help in developing
confidence and team spirit among them. Also, the manager must follow the principle of unity of
command as it help in maintain efficiency and effectiveness in a workplace.
LO3 and LO4 Covered in PPT
CONCLUSION
From the above report, it has been analysed that the changes are tales place at a fast pace
so the manager has to bring transformation by adopting new and innovative technology which
help in ensuring greater success in future. The size, scope and structure as well as role of
operational departments such as finance, marketing, food and beverage department and so on is
discussed in this report. The internal and external factors is conducted in order to achieve
competitive advantage and significant position across the globe. The current and latest trends of
hospitality sectors is also analysed which help in achieving sustainable development in a long
run.
REFERENCES
Books and Journals
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Ali, F., and et.al., 2018. An assessment of the use of partial least squares structural equation modeling
(PLS-SEM) in hospitality research. International Journal of Contemporary Hospitality
Management.
Cheng, J.C. and Chen, C.Y., 2017. Job resourcefulness, work engagement and prosocial service
behaviors in the hospitality industry. International Journal of Contemporary Hospitality
Management.
Horng, J.S., Tsai, C.Y. and Chung, Y.C., 2016. Measuring practitioners’ creativity in the Taiwanese
tourism and hospitality industry. Thinking Skills and Creativity. 19. pp.269-278.
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.
Jiang, L. and Alexakis, G., 2017. Comparing students' and managers' perceptions of essential entry-level
management competencies in the hospitality industry: An empirical study. Journal of hospitality,
leisure, sport & tourism education. 20. pp.32-46.
Kim, H.L., Woo, E., Uysal, M. and Kwon, N., 2018. The effects of corporate social responsibility (CSR)
on employee well-being in the hospitality industry. International Journal of Contemporary
Hospitality Management.
Kumar, S., Colombage, S. and Rao, P., 2017. Research on capital structure determinants: a review and
future directions. International Journal of Managerial Finance.
Ling, Q., Liu, F. and Wu, X., 2017. Servant versus authentic leadership: Assessing effectiveness in
China’s hospitality industry. Cornell Hospitality Quarterly. 58(1). pp.53-68.
Prud’homme, B. and Raymond, L., 2016. Implementation of sustainable development practices in the
hospitality industry. International Journal of Contemporary Hospitality Management.
Ram, Y., 2018. Hostility or hospitality? A review on violence, bullying and sexual harassment in the
tourism and hospitality industry. Current Issues in Tourism. 21(7). pp.760-774.
Wang, C.J., 2016. Does leader-member exchange enhance performance in the hospitality
industry?. International Journal of Contemporary Hospitality Management.
Zaitseva, N.A., and et.al., 2016. Necessity of changes in the system of hospitality industry and tourism
training in terms of import substitution. International Journal of Economics and Financial
Issues. 6(1).
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