Hospitality Industry Report: Hotel Holiday Inn Case Study, UK

Desklib provides past papers and solved assignments for students. This report analyzes the UK hospitality industry.

HOSITALITY INDUSTRY
Name of the student:
Name of the university:
Author’s note:
1

HOSITALITY INDUSTRY
Table of Contents
Introduction......................................................................................................................................3
LO1: Examine the current structure, scope and size of hospitality industry (P1, P2, P3, M1, M2,
D1)...................................................................................................................................................3
LO2: Explore current and anticipated skills requirement in the hospitality industry (P3,P4, M3,
D2)...................................................................................................................................................5
Different operational roles within the hospitality industry:.........................................................5
Skills required for roles within the hospitality industry and current skills shortages..................6
LO3: Review the internal and external factors that impact the hospitality industry and how they
relate to current issues facing the hospitality industry (P6, P7, M4, D3)........................................7
SWOT analysis of Hotel Holiday Inn:.........................................................................................7
Pest analysis of the UK:...............................................................................................................9
LO4: Analyze the current and potential trends and developments affecting the hospitality
industry (P8, M5)...........................................................................................................................10
Current and potential trends.......................................................................................................10
New developments affecting the hospitality industry...............................................................11
Conclusion.....................................................................................................................................11
Reference.......................................................................................................................................13
2

HOSITALITY INDUSTRY
Introduction
The hospitality industry includes a number of organizations such as hotels, restaurants, pubs and
other leisure and event planning organizations. In many countries such as the UK and Australia,
the hospitality industry is considered as one of the most revenue earning industries as it helps to
earn revenue and foreign currencies. The hospitality sector in the UK has been analysed here
with special focus on one of the premium hotels of the country, Hotel Holiday Inn. Current
structure, scope, size, anticipated skills, internal and external factors has been examined here
along with the current and potential trends of the industry in the context of the UK.
LO1: Examine the current structure, scope and size of hospitality industry (P1, P2, P3, M1,
M2, D1)
Structure: The hospitality sector refers to the different establishments that provide services to
their customers regarding food and lodging, sometimes in planning and managing different
events. Not only in the UK, but also in all over the world, the establishments such as small to
large hotels, restaurants, bars, pubs and other leisure and event planning organizations are
included in the sector. Additional fields in the tourism industry have been included in the
hospitality sector at the same time (Schuckert et al. 2016). By analysing the different
perspectives of the hospitality industry, the services such as catering, takeaway, airlines, cruise
and the other sectors such as the tourism information service would be included in the hospitality
industry.
Scope and size: The hospitality industry not only in the UK, but also in the whole world is
becoming one of the industries with consistent growth and development potential. In the UK, the
current size of the industry can be understood from the fact that 11% of total GDP of the country
is earned through this industry. Moreover, this industry provides 6.5 trillion USD to the total
business sector of the world. In aspect from employment, around 9% of the total employability
of the country generates from this particular sector (Kim et al. 2017). Every year, at least 25,000
employment facilities has been developed in this takeaway sectors of the hospitality industry,
3

HOSITALITY INDUSTRY
about 1, 50,000 jobs are generated every year in the hotels and 1, 30,000 jobs are generated in
the cafes, pubs and restaurants. Even in the event management and planning also, the total
employability chances are about 9,000 jobs.
From the size and age group of the employees working in the hospitality industry, it can be stated
that the average age of the employees in the industry are young (Lai et al. 2018). The energetic
and young workforce is another potential factor behind the rapid growth of the industry in the
UK.
Key functional and operational areas: In the selected organization, Hotel Holiday Inn, some
operational and key functional areas can be found that are involved into the development of the
industry and the hotel itself. The operational areas of the hotel is classified as Executives, Front
Desk Services, housekeeping and maintenance, kitchen , accounting, sale and marketing. The
organization promises their consumers with the right services at the right time (Liang et al.
2017). Thus, the operational areas have been developed according to that. On the other hand, the
key functional areas of the organization are consisted of the following areas, such as: revenue
centre, support centre, front office and the back office areas. The key functional areas ensure that
apart from serving the consumers with the right services, the organization should have the
efficient workforce that would work to develop the key functional areas for the overall, business
development and activities of the organization. All of the above-mentioned key operational and
functional areas of the hotel are related to each other. Without the proper development of the
operational areas of the hotel, it is not possible that the functional areas would be fulfilled
(Gursoy, 2018).
Like all the establishments in the hospitality sector, the mentioned organization is also dependent
on their key functional and operational hotels. The functional areas of the organization are
responsible for managing the internal activities by which they serve their consumers. On the
other hand, the operational areas are the areas that entertain or take care of services provided to
the consumers (Díaz et al. 2018). As both are related to the services provided to the consumers, it
is evident that they are related to each other.
4

HOSITALITY INDUSTRY
LO2: Explore current and anticipated skills requirement in the hospitality industry (P3,P4,
M3, D2)
Different operational roles within the hospitality industry:
A range of operational goals is to be developed in the hospitality industry in order to maintain
the operational needs of the mentioned organization, Hotel Holiday Inn. It is seen that the key
operational areas can be identified from the structure of the hotel which consists of the factors
such as the Executives, Front Desk Services, housekeeping and maintenance, kitchen,
accounting, sale and marketing.
 The executives are responsible for decision making in the organization and they are also
responsible for the development of the other areas such as marketing, accounting and
kitchen
 Front Desk Services are responsible for attending all the queries by the consumer, in
person and over phone and mail. In case of the medium and large hotels, the front desk
services as one of the important part as the reputation of the hotel is dependent on it
(Fong et al. 2015)
 For cleaning and maintaining the cleanliness of the rooms, the housekeeping department
is responsible. It is one of the routes to attend the guests and impress them to retain.
Maintenance of the upholstery and the other gadgets in the room should be looked after
as it is one of the responsibility of the hotel
 Tracking the revenue and the expenses according to the rooms and the menu are the
responsibility of the accounting department. They are responsible for providing the right
data and forecast of the expenses, which help in the decision making factors in the
organization
 For promoting the business and use the potential prospects in the organization, it is
required to take care of the promotion and sales of the organizations. The marketing and
the sales executives are responsible to promote new services to the potential consumers
so that the consumer retention rate and the consumer loyalty can be increased (Leung et
al. 2015).
5

HOSITALITY INDUSTRY
Skills required for roles within the hospitality industry and current skills shortages
For mitigating the above mentioned roles in the hospitality industry, rather in the mentioned
industry, Hotel Holiday Inn, it is needed that the roles and responsibilities of the executives and
the other employees should be developed. However, some skill gaps have been identified, which
is needed to be mitigated for achieving the right measures and responsibilities in the industry.
Moreover, the mitigation of the skill gaps would also help to retain the existing consumers of the
hotel and attract new consumers at the same time.
By reviewing the staffs and roles and responsibilities of the hospitality industry along with the
mentioned organization, it can be stated that the skill shortage of the employees in the key
functional areas is one of the common factors seen in the mentioned organization and the other
organizations in the hospitality industry of the UK (Jones et al. 2015). The skills shortage can be
classified into the below mentioned divisions:
a) Operational characteristics of the business
It has been that the development of the operational characteristics of the business is responsible
to find the right people to mitigate the roles. The reason behind this is that most of the individual
do not find working in the hospitality sector due to a number of reasons. Thus the number and
skill shortage is being developed.
b) Competition among the establishments in the sector
Within the hospitality sector, a number of establishments can be found. Not only the hotels, but
also the restaurants, bars, pubs and the other organizations are included into it. However, in order
to meet the demands of age, numbers of the establishments are increasing and the competition
among those organizations is developing (Wood, 2015). Thus, the skilled people are getting
chance of higher wages and the lack of skilled people is increasing.
c) Lack of direct vocational training
For doing jobs in the hospitality industry, except the hotel management courses, not other
vocational trainings are available in the context of the hospitality industry of the UK. Thus, the
skilled workforce in the various posts of the hospitality industry is not getting any skilled worker.
6

HOSITALITY INDUSTRY
Thus, not only the respective organization, but also the whole hospitality industry is suffering
from it. Lack of funding is responsible for it along with interest of the common people
(Filimonau et al. 2016). It is seen that the development of the subsidised training and incentives
for existing employees can also meet the demand of the industry.
d) Immigration regulation
The impact of Brexit and the new immigration regulation of the UK have also affected the
organization and the industry at the same time. It is also can be seen that the development of the
457 visa program of the country have affected the organizational workforce. Moreover, the
hospitality industry has acquired a large number of workforces from the EU countries. However,
after Brexit, that opportunity has been demolished.
e) Lack of recognition
It is evident that in most of the organization in the hospitality industry do not consider the
employees, other than the executives and the chefs, to be liable of recognition. Thus, most of the
employees working in the organization need recognition for increasing skill and mitigating the
shortages.
LO3: Review the internal and external factors that impact the hospitality industry and how
they relate to current issues facing the hospitality industry (P6, P7, M4, D3)
In order to examine the internal and the external factors that are affecting the hospitality industry
and the mentioned organization, Hotel Holiday Inn, it is required the SWOT analysis and the
PEST analysis to be conducted respectively.
SWOT analysis of Hotel Holiday Inn:
Strength Weakness
 High brand visibility
 New market entry
 High brand value of the parent
 Weak response in the emerging
economies
 Number of competitors
7

HOSITALITY INDUSTRY
company
 High customer satisfaction
Opportunities Threats
 Country specific seasonal offers
 Destination travelling
 Increased affordability of the
consumers
 New competitors worldwide
 Increased cost of operation
 Decline in the tourism industry
From the analysis of the internal factors of the mentioned organization, Hotel Holiday Inn, the
below mentioned factors can be found:
Strength: By examining the factors affecting the organization internally, the strength of the
organizations can be found. The organization, in the context of the hospitality industry has a high
brand value due to their predetermined reputation as one of the premium hotels of the UK. It
helped to retain their consumers and attract the new consumers as well (Koc, 2017). The
organization is also opening their branches in the different developed and developing countries
of the world. It is also seen that the high consumer satisfaction is one of their strength that helped
to enter new market and develop business in the existing market. The parent company of the
mentioned organization is InterContinental Hotels Group that have a high brand value, also
helped their business.
Weakness: Intense competition among the organizations of the hospitality industry is evident,
which is affecting the business of the organization. Moreover, due to the intense competition, the
organization is experiencing, limited market share. In addition to this factor, in the emerging
economic, due to the affordability issue of the premium hotels, the organization is being affected.
Opportunities: As the travellers are looking for the new destination, the organization can open
their branches in the unusual destinations for attracting their consumers (Lashley, 2016). The
affordability of the people is increasing along with time, thus people are getting attracted to the
premium hotels like Hotel Holiday Inn.
8

HOSITALITY INDUSTRY
Threats: Along with the intense competition, other issues are imposing as threats for the
organization. One of the threats for the organization is the increased operational cost. Due to cost
inflation and the other reasons, the operational cost of the industry is developing day by day
(Ladkin and Buhalis, 2016). Moreover, due to the natural calamities and reasons like terrorisms,
many popular destination of the world is suffering from lack of resources, which is affecting the
organization and the industry as well.
Pest analysis of the UK:
In order to evaluate the factors externally affecting the hospitality industry, the Pest analysis of
the specified country would be beneficial.
Political Environmental Social Technological
 The new
immigration
policy
 Digital
Economy Act
2010
 Constant
monitoring of
the political
environment
of the country
 Intense market
 Increased VAT
 Governmental
spending on
tourism
 Location
 Events and
attributes
 Use of the
latest
technology
 Use of social
media for
obtaining
feedbacks
Political factors: The new immigration policy of the country has been developed as one of the
factors that is affecting the businesses, especially the tourism and hospitality industry. A number
of workforces can be affected by it. The use of Digital Economy Act 2010 has been used for the
development of the business of the industry. In order to manage the business in the company, the political
environment of the country must be monitored on a regular basis (Bell, 2016).
9

HOSITALITY INDUSTRY
Economic factors: Among the economic factors, the intense market of business in the UK can be
identified as a factor affecting the business. Moreover, the factors such as the increased amount of value
added tax over the business and the governmental expenses over the tourism and hospitality industry is
affecting the business industry.
Social factors: Due to the increased affordability of the common people, the hospitality industry of the
country is being developed. The UK has been recognised as one of the important tourist destination,
which helped the organization to influence the hospitality industry (Wood, 2015).
Technological factors: The use of technology has been developing as one of the major change factors of
the industry. From booking the rooms in hotel or tables in restaurant, the internet can be used. Moreover,
the consumers nowadays are using the social media for expressing their feedbacks.
LO4: Analyze the current and potential trends and developments affecting the hospitality
industry (P8, M5)
Current and potential trends
It can be noted that the hospitality industry is one of the dynamic industry in the UK regions
which helps in earning a great deal of money. This sector is home to 29 million people and 700
companies which stand to 10% of the UK employment, 6% overall business and 5% GDP.
Further, the trend in the industry shows that the gender pay gap is reducing and is helping to
promote inclusivity (Zhang, 2018). The pay gap has reduced to 2.8% which is positive news and
it is the result of the hard work of the employees. Thus, then there is n barrier to progression
which is helping Hotel Holiday in to make progress in an effective way.
Ferris et al., (2018) states about the facts that the most vital decision that has impacted the
hospitality sectors is the news of BREXIT. It has raised questions on the development of the
sector as it is the fourth largest sector in Britain. According to French, (2018) which states that
the most worrying sign for the hoteliers like the Hotel Holiday Inn is about the number of staffs
that the recruit from the European migrants. This is mainly because of the fact that in the current
scenario, the workers do not need to take any work permit and is free to enter the markets of the
UK. Further, the employers only have to undertake a "legal right to work" check before they are
being recruited. On this basis, the UK hotel and leisure business tends to employ over 4, 00,000
10

HOSITALITY INDUSTRY
migrant workers who are coming from all parts of the world (Kotera, Adhikari and Van Gordon,
2018). Therefore, the hospitality industry will tend to suffer bigger blows in terms of labour
shortage and will hamper the service provided by hotels like the Hotel Holiday Inn. It will
further add to the problem of downward revenue and Hotel Holiday In may find it difficult to
operate in this market. The main problem could be found in the manager's position that performs
the major role to interact with customers and helps to satisfy them by fulfilling their needs
effectively. For instance, the floor manager of Hotel Holiday In is responsible for looking after
the operations of varies departments and their smooth running. If this managerial position is left
vacant then the communication gap arises among the departments and decreases the working
procedure to a greater degree. It will create uncertainty and shall make a huge difference in terms
of expanding the business. Zhang, (2018) backs this through the research and says that the trends
show that within the coming weeks and months of BREXIT referendum, the process of
recruitment will be much harder and expensive and the trend will continue. Thus, the people who
are coming to work here may find it difficult to earn money so they may not seek any
opportunity in the hospitality business of the UK.
New developments affecting the hospitality industry
The hospitality industry is being affected by a number of issues; however, one of the major
developments that have been identified affecting the hospitality industry is the use of internet and
social media. With the advent of internet, tourism and hospitality industry is being affected, as it
is the people nowadays using the internet for the purposes, such as booking the hotel room and
tables in restaurants. Thus, in order to increase their profits and revenue, the organizations in the
tourism and hospitality industry are using the internet more frequently. On the other hand, for the
organizations such as Hotel Holiday Inn, it is a preferable choice, as people from the different
corners of the world can book their hotels any time. In addition to this, the use of social media is
affecting the business of the tourism and hospitality industry and the mentioned organization, as
the guests are using the social media for sharing their valuable feedbacks. It is also working as a
promotional tool for the organization and the tourism and hospitality industry as well.
11

HOSITALITY INDUSTRY
Conclusion
For concluding the study, it can be stated that the tourism and hospitality industry in the UK,
most importantly, the mentioned organization, Hotel Holiday Inn is getting affected by a number
of factors. All of these factors has been analysed here, with the special focus on the business
development of the the mentioned organization, Hotel Holiday Inn. Thus, it is needed that the
development of the the mentioned organization, Hotel Holiday Inn and the tourism and
hospitality industry in the UK can be enhanced by the technological development.
12