Hospitality Industry Report: Premier Inn Case Study

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THE NATURE AND STRUCTURE OF HOSPITALITY
INDUSTRY AND THE EMERGING ISSUES AND TRENDS
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Table of contents
Introduction..........................................................................................................................3
Describing hospitality businesses, exploring various kinds of businesses in the hospitality
sector and their products or services................................................................................................3
Different functions in the hospitality industry, discussing the functional and operational
departments and monitoring their relations.....................................................................................4
Evaluating the contribution of the hospitality sector to the international, national, local
economies........................................................................................................................................5
Influence of licensing and franchising agreements on the hospitality sector's global
development and the economy........................................................................................................5
Investigating various operational roles in the hospitality sector and giving examples.......6
Discussing the requirements of skills in the hospitality sector and monitoring the gaps in
the skills in the organisation............................................................................................................7
Evaluating the effect of the skill gaps..................................................................................7
Pestle analysis of the hospitality industry using the organisation.......................................8
SWOT analysis of Premier Inn............................................................................................9
Critically evaluate the impact of external factors on the development and trends of
Premier Inn....................................................................................................................................10
The implications of potential and current trends in the industry.......................................11
Conclusion.........................................................................................................................11
Reference list.....................................................................................................................12
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Introduction
This assignment focuses on nature, the issues and trends of the hospitality industry. For this
assignment, a British hotel chain, Premier Inn has been selected. It is known as one of the most
popular hotel chains in the country. In fact, it is known as the largest hospitality brand in the
country. The hotel chain consists of approximately 785 hotels and performs business in various
locations such as airports, city, and suburbs. This hotel chain was developed by Whitbread in the
year, 1987. The CEO of this hotel chain is Alison Brittain and the headquarter of this hotel chain
is situated in Dunstable, the UK. It mainly serves customers in the UK, Ireland, Germany, the
UAE, and India. In this assignment, various aspects of the hospitality industry in the UK have
been evaluated elaborately. It has been discussed that the hospitality industry contributes a lot to
the employment and economy of the UK.
Describing hospitality businesses, exploring various kinds of
businesses in the hospitality sector and their products or services
The hospitality industry is one of the most popular industries that remain dependent on
customer satisfaction. According to Baum (2019), in this industry, the business organisations'
success generally depends on the effectiveness of the hospitality teams and the business model.
There are four different kinds of hospitality businesses and all of these businesses are popular all
over the world. These hospitality businesses include accommodation, food, and beverages,
tourism and entertainment. Accommodation is the most popular hospitality business and it
attracts a lot of customers. The sector includes hotels, resorts, guest houses and luxury suites
which provide the customers lodging services. When people travel to a different place for a few
days, they need good hotels or resorts where they can stay for days. In the UK, various kinds of
hotels, resorts, luxury suits available for different types of customers.
The food sector is also a large sector in the business of hospitality industry. When some
customers stay in a hotel and that hotel offers them the services of a restaurant, it makes their
experiences even better. This sector offers the customers various types of food products such as
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burger, pizza, noodles, etc. and food items generally vary from one place to another
(Hospitalitynet.org, 2019). Apart from restaurants, catering services is also considered a
significant aspect of the food sector. Many people take services from the food services on
occasions such as marriage anniversaries and birthdays.
Tourism is one of the largest sectors of the UK and it contributes greatly to the economy
of the country. The services of planes, buses, trains, cabs, ship, etc. are all significant aspects of
the tourism sector. Many people spend a lot of money on tourism and that is the reason, it has
become very popular. Both informal and formal tourism can be considered significant parts of
this business. Several people travel from one place to another for entertainment, education,
business purpose and some other purposes. Recreation or entertainment mostly plays an
important role in the lives of youngsters. It even attracts the attention of some middle-aged or old
people as well (French, 2018). Therefore, a lot of youngsters look for services nightclubs and
bars when they visit a different place. When the services of nightclubs provide them with
amazing dancing experiences, bars give them an opportunity to drink interesting cocktails and
drinks. In fact, nightclubs have become an essential part of many people's lifestyles. Other than
that, the services of the cruise are also very popular in the UK and many other countries. Many
people like to spend their holidays on ships because it is really an amazing experience to look at
the beautiful, blue oceans from those ships.
Different functions in the hospitality industry, discussing the
functional and operational departments and monitoring their
relations
In order to run hotels properly, it is very important for the functions or departments to
coordinate with each other. The functions of the hotels include maintenance, security, front
office, personnel, and food services. In order to provide the customers best experiences, the
employees generally coordinate with the front office executives and maintenance department.
Front office executives talk to the housekeeping staffs to inform them about the
requirements and complaints of their customers. For instance, if a customer of a hotel requests
for providing him extra towels, this message should be conveyed to the housekeeping. The front
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office executives should also inform them about the special requirements of their VIPs. The
maintenance department must communicate with the housekeeping about the maintenance issues
so that they remain aware of the issues. In this way, the housekeeping staffs gather enough
knowledge to give appropriate answers to their customers if they are asked. The food service
department should also inform the customers about the timings when the customers take their
meals. Therefore, there will be no clash between the housekeeping and food service department.
Hotels generally have both functional and operational units to run business activities
properly. Marketing teams, the operations manager, the HR managers, the executives, and the
accounting department are parts of operational units (Gourmetmarketing.net, 2019). On the other
hand, the functional units include housekeeping, maintenance team, and front office staffs.
Both of these departments always maintain a connection with one other to perform
activities properly in Premier Inn. If any issue related to maintenance happens, the employees
must inform the operations manager. The front office employees, housekeeping and maintenance
teams always talk to HR professionals if they face any kind of discrimination at the workplace.
In order to make effective marketing strategies, the marketing teams talk to the front office
executives and know about the preferences of their customers. Executives can be either the head
of the departments or the directors and all of the employees from functional units always report
to the department heads.
Evaluating the contribution of the hospitality sector to the
international, national, local economies
The hospitality sector is developing rapidly because many people travel to different
places for various purposes. This sector generally contributes to the world's 10% of the GDP.
According to a report, approximately 700 million people travel to different places on the global
level. The most significant region of travelling was the European countries and the UK is one of
those countries. Apart from GDP, tourism helps people gain knowledge about the cultures and
heritage of different countries in the world.
In the UK, the hospitality industry provides employment to approximately 2.5 people
(Filimonau and Mika, 2019). Therefore, it can be understood that the hospitality sector is
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considered as a source of employment for many people and this sector generally provides jobs to
the people who live in Edinburgh, London, South Western part of England and Scotland. This
industry went through a lot of problems in the 20th century and over the years, it becomes one of
the most popular sectors of the country. It is now considered the 4th largest employer in the
country nationally and it is known as the 6th largest employer at the local level in the UK. The
industry gets support from the government of the country and it is economically stable. Both of
these aspects help the industry develop in the UK at the local and national level.
Influence of licensing and franchising agreements on the hospitality
sector's global development and the economy
Franchise and licensing have become one of the most significant aspects of various
businesses. Both of these agreements help businesses grow globally and become more popular.
Licensing and franchising are both completely different from each other; however, both of them
contribute to the profitability of the business. Franchising refers to an extension of a business
organisation, which want to expand to other areas. The concept of franchise helps businesses to
cater to customers from different parts of the world. On the other hand, the license means
permitting a company to perform business activities with the help of common operating systems
and brand names. As stated by Meiselles and Wharton (2018), when the business professionals
license their businesses, they get payments regularly from other business organisation for using
their brand identity, processes or operating systems. As far as licensing is concerned, it can help
the businesses generate more profit because operating business activities in more countries
through using the licensing technique.
Investigating various operational roles in the hospitality sector and
giving examples
There are different types of operational roles in the hotel industry and they are human
resources, security team, food service department, and housekeeping. It is the responsibility of
the operations manager is to communicate with the customers, the higher authority and the
employees who perform operational roles to make sure the hotel runs smoothly. The major role
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of the housekeeping is to make sure that the rooms and the attached bathrooms remain clean. The
food department has to take orders and deliver the customers their food items on time.
As opined by Riley (2019), human resource professionals have to hire efficient
employees and make sure to provide them with effective training. Otherwise, it will have a
negative impact on the business performance of the hotel. The security team in a hotel makes
sure that any kind of criminal activities does not happen there and the customers feel safe. The
hotel chain, Premier Inn provides HR services, amazing food services, and housekeeping
services to its customers. The security teams also ensure the employees feel secure in Premier
Inn. As far as the food products are considered, a lot of food items are available at affordable
prices, the kitchen staffs and the waiters have a sense of punctuality. The housekeeping staffs try
to make the rooms suitable for their customers and their experiences pleasurable. The security
employees of the hotel chain are all really skilled and experienced at their work, therefore, they
take care of the security of employees properly.
Discussing the requirements of skills in the hospitality sector and
monitoring the gaps in the skills in the organisation
One of the essential professional skills required in the hospitality sector is effective
communication skills. The employees working in a hotel or restaurant need to communicate a lot
with their customers. It is particularly applicable to the customer care department, the customer
care executives need to listen to the issues of their customers and try to resolve those issues
quickly. The customer care team of Premier Inn have good communication skills and they
communicate with the customers well. However, the main problem is that most of the employees
of the UK hotels of this hotel chain know English and customers from other countries where
people do not understand English. Therefore, the management team needs to arrange training on
foreign languages and on the importance of cross-cultural communication in the hospitality
industry
Another important skill that the employees of hotels need to have is hygiene skills. It is
extremely important for the hotel employees to maintain personal hygiene to prevent bacteria or
germs to the rooms of the hotels. They also need to take care of customers' hygiene and make
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sure to provide them with a safe and hygienic environment. After all, customers are the most
important aspects of hotels (Bryson et al., 2018). Therefore, it is the duty of hotel staffs to ensure
their safety, otherwise, it will create a negative impression in the minds of customers and they
will not visit the hotel again.
As far as Premier Inn is concerned, the hotel staffs do not have a good sense of hygiene.
In the past, it became a controversial topic and many customers did not like the habits of hotel
employees at all. It was noticed that some workers used the guest towels for cleaning the toilets.
This type of behaviour is not accepted from a leading hotel chain and therefore, the owner and
the managers need to change the habits of their hotel staffs. They will have to conduct proper
training sessions to change their mentality and behaviour.
Evaluating the effect of the skill gaps
The two most important professional skills are communication skills and hygiene skills in
the hospitality industry. If the employees of Premier Inn cannot communicate with their
employees properly, the customers will not be satisfied. The employees will not understand the
issues that the issues and the requirements of the customers (Mehdi, 2018). If they do not provide
their customers with the best service, the customers will never visit the hotel again. There are
some European and Asian countries where people do not understand English. That is the reason,
it is very important for customer care executives to learn multiple languages.
The lack of hygiene skills is already considered as one of the major issues of Premier Inn.
Customers generally expect from a popular luxury hotel to maintain the standards of hygiene and
safety. If the employees do not prioritise the hygiene of customers, it can affect the health of
customers negatively. Germs and bacteria in the hotel rooms may cause serious diseases. In this
competitive market, it is important for the hotel, Premier Inn to meet the basic needs of their
customers. Otherwise, there are plenty of options available in the UK and the customers may
take hospitality services from the hotels where the hotel staffs have a good sense of hygiene. The
higher authority needs to organise training sessions to improve these professional skills of their
customers.
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Pestle analysis of the hospitality industry using the organisation
Political factors:
The UK government understands the hospitality industry as one of the most important
industries for the country. It provides a lot of employment opportunities for people who live in
the UK. Therefore, the government makes sure leading hotels do not face political issues in the
country.
Environmental factors:
People generally prefer environment-friendly business organisations over others
(Ruffolo, 2017). Therefore, Premier Inn always gives emphasis on CSR strategies and in fact, it
is considered as one of the core competencies of this organisation.
Social factors:
As the living cost has increased in the UK, this social change affected the tourism
industry positively. Premier Inn concentrates on customer satisfaction, the business leaders keep
themselves updated with the changing lifestyles and social values of people.
Technological factors:
New and advanced technologies are used in the Premier Inn because it helps in improving
business operations. The technologies help the hotel chain in maintaining functions and with the
help of advanced technologies, the employees co-relate with one another.
Legal factors:
Premier Inn follows all the laws properly to run the business activities smoothly. The
organisation also created responsible sourcing policies to determine standards that the hotel
expects from its partners, contractors, and suppliers.
Economic factors:
The UK has a strong economy and it works in favour of the hotel chain. As this hotel
provides people with employment opportunities, it strengthens the economy of the country.
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SWOT analysis of Premier Inn
Strengths
 Presence and popularity in the UK
 Great brand image
Weaknesses
 Presence in limited countries
 Hygiene issues
Opportunities
 Expanding new markets
 Change in decor and design
Threats
 Strong competition from other hotels
Premier Inn is known as one of the largest hotel chains in the UK and it enjoys a strong
loyal customer base. As per the annual report of 2015, the hotel chain had approximately 61,000
rooms and it can be considered that the hotel chain had maximum numbers or bedroom
(Howandwhat.net, 2019). It established a great brand image because the hotel chain was awarded
some prestigious awards such as British Travel Awards and Best hotel brand in the UK by a few
well-known British organisations.
One of the major issues of this hotel chain is that it performs business activities in a few
countries. However, the profitability of the organisation will increase if it expands to other
countries. Research revealed the fact that the workers of Premier Inn cleaned the washrooms by
using the towels provided to their guests.
One of the biggest opportunities in this hotel is that it can enter more countries to do
business. It is already doing business in a few countries successful, therefore, therefore, there is a
high chance it will do good business in other places as well. If the business leaders of this hotel
chain focus on the decorations and designs and make certain modifications on the designs,
decorations, it will be able to attract more customers.
The major threat of this hotel is that it faces strong competition from other popular hotels.
Its main competitors are Ibis Budget, EasyHotel, Crown Plaza, Holiday Inn, and Britannia.
Therefore, business leaders will have to develop effective business strategies to stay ahead of the
competition in the UK market.
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Critically evaluate the impact of external factors on the development
and trends of Premier Inn
Nowadays, many people understand the significance of selecting leading hotels which
have a great brand identity. Therefore, a lot of people take services from the hotel chain, Premier
Inn. The government of the UK gives full political support to the hospitality industry of the
country. That is the reason; Premier Inn and other hotels generally do not face political issues in
the UK. The implementation of new and advanced technologies makes the business operations
better and the hotels perform their activities well (Melissen and Sauer, 2019). Good CSR
strategies make a positive image of this business organisation in the minds of their customers.
Good economy of the UK works in favour of the hotel chain. As business leaders meet legal
requirements, they perform their activities smoothly.
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