RUTH NZAKIMUENA

ID: M1010369

Unit Title: Unit 1 The Contemporary Hospitality Industry

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Analysis of the Contemporary Hospitality Industry

Introduction

The hospitality industry is among the fastest growing in the current business environment. This

therefore means that companies in this industry need be innovative and flexible enough to

ensure that they maintain their relevance in the industry (Brotherton, 2012). Another aspect that

characterizes this industry is the increase in diversity among its target clients, employees and also

the services offered (Boella & Goss-Turner, 2013). With reference to the hospitality industry, this

paper explores the diversity and nature of hospitality and industries that constitute it. The paper

shall be based on different scenarios that are common in the industry.

Q1

1.1 The current scale, scope and diversity of the hospitality industry

The scope of UK’s hospitality industry is quite vast, and is defined by the different types of

businesses that make up the industry. Businesses providing food and beverages, events and

catering services include hotels, restaurants, event planning companies, resorts, bars and night

clubs, and contract food and service providers (BHA, 2015). Understanding this diversity and the

differences that exist among the types of businesses in this industry is vital in ensuring the right

employees are recruited for each.

The scale of the hospitality industry can be estimated by referring to different indicators. By the

end of 2014, the scale of the industry was as summarized in the table below. The table clearly

shows the contribution made by the industry in terms of revenues, and employment.

Table 1: Some indicators in the UK hospitality industry

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Indicator Scale
Number of people employed Hotels: over 400,000
Restaurants: over 1.2 million
Contract and in-house catering: 750,000
Event management: 20,000
Foreign exchange earnings Over £7 billion
Overall revenues Over £ 101 billion, which is more than 6% of the overall GDP
Data from: RBS (2014)

Diversity of the industry varies from the services and products provided by different businesses

in the industry, the target clients and the levels of services offered. For instance, hotels offer

accommodation or bed and breakfast services to clients. However, hotels of different star

classifications – from one to five-star – target clients of diverse spending capabilities (Becerra et

al., 2013). There is also diversity in products or services offered. For instance, while restaurants

are expected to serve foods and beverages of different types, bars and night clubs are mainly

expected to serve alcoholic drinks.

1.2 Organizational structures of different hospitality organizations

Organizational structures can be defined based on different aspects of the organization. These

include the ownership structure, functional areas or the bureaucracy in different levels of the

hotel. This chart below uses the functional areas to define organizational structures of a typical

hotel.

Chart 1: organizational structure of a hotel

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The chart below shows a hierarchical organizational structure of a restaurant, which is a clear

depiction of communication and decision-making paths.

Chart 2: organizational structure of a restaurant business

Organizational structures can also be depicted in terms of organizational ownership. Some of the

most common ownership structures include franchising, leasing, and private ownership. A

franchising ownership structure is represented in the chart below.

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Chart 3: Franchise ownership structure

Frachiser (owner of Trademark)

Independent Independent Independent Independent
business business business business
Franchisee 1) Franchisee 2) Franchisee 3) Franchisee n

Customers

1.3 The role played by different hospitality related organizations and professional bodies

There are several professional bodies or organizations that are related to the hospitality industry.

Some of them and their roles are summarized in the table below.

Table 2: organizations and professional bodies in UK’s hospitality industry

Body Roles
People 1st It provides training for employees in different hospitality
industry fields in order to help companies offer better services and
as a consequence, increase their returns.
British Hospitality It represents and promotes interests of different companies and Association
stakeholders in the hospitality industry.
It also promotes competition in the hospitality industry while at the
same time encouraging responsible hospitality.

Institute of Hospitality This is a professional body for current and aspiring managers working
in different hospitality industry companies. It builds their skills to
enable them gain more from their employment, and also offers
accreditation.
British Institute of It is a charity body whose main aim is to improve the level of Innkeepers skill
and professional standards in the hospitality sector.
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In addition to above listed bodies, there are also a number of related organizations and agencies related

to the hospitality industries. They include recruitment agencies, contract cleaners, contract maintenance,

as well as supplying agencies.

Recruitment Agencies

The recruitment agencies play a pivotal role in providing a bridge between the hotel industry and

the world of stuff. These agencies work in close consultation with travel to link the trained staff

with the hotels and restaurants looking for personnel. Such staff include cleaners, porters,

managers, and receptionists, chefs, among other professional staff such as accounting and

finance officers, guest relations officers, F & B managers, and Maintenance and Engineering, who

are employed on permanent, or temporary terms. Even though the duties of such staff vary, but

these agencies orient their staff to join the existing hotel staff in delivering quality service for

their customers.

Contract Cleaners and Contract Maintenance

Contract cleaners are non-residential cleaning staff, who are hired by different organizations or

individuals to offer cleaning services on a contract basis. Contract cleaning agencies help to meet

the most critical requirement for the hotel industries, which demand utmost hygienic standards.

In such services, the contract cleaning agencies aim at maintaining all areas of the hostel premises

to the highest standards of hygiene, implementing best hygienic policies and standards in hotel

operations, and thereby achieve an efficient and an effective performance practice.

Similarly, contract maintenance agencies are non-residential hotel staff, whose work majorly

involves providing technical maintenance services to the hotel assets. Their services are initiated
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by the hotel management upon regular demand, when they repair and install new systems to the

warn-out parts of different sectors of the hotel property. Some of the services include electrical

fittings and repair, wall refurbishing, piping and water services.

Supplying Agencies

Supplying agencies are part of the hotel supply chain management. The chain consists of

manufacturers, importers, hire companies, whole sellers as well as retailers. The supplying

agencies work in close consultation with the hotel marketing managers to ensure all the required

stuff are available.

Q2

2.1 Staffing Requirements of Different Hospitality Industries

Depending on the staffing requirements, the hotel industries (both hotels and restaurants) have

three different variable or terms of employment for their staff. There are those employed on full

time basis, others part time, while others on contract or agency terms. HR personnel often have

tremendous pressure while recruiting staff, with the difficulty of matching the knowledge and

skills required to perform particular tasks, and the management’s financial budget. In some cases,

some hotels and restaurants miss the required staff due to relatively low labour budgets

(Nickson, 2013).

Part Time Employees

The process of employing staff into the hotel, just like any other agency, has remain in compliance

with the national regulations and laws (Epstein et,al., 2014). More importantly for the hotel
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should be the extent to which such employees meet their needs. Part time employees are those

defined by UK Revenue Codes as working for up to 1000 hours within a year. For small or

developing hotel businesses, part time employees are a better option due to their flexibility and

relatively low cost. On the other hand, part timers have limited sense of loyalty as they often hold

other jobs, creating lower turnover. In most cases, cleaners and maintenance officers fall under

this category. This is because hotels schedule regular intervals during which they need such part

time services. While cleaning may be scheduled for three times a day, other technical

maintenance services may occur on a monthly basis.

Full Time Employees

Full time worker generally work for approximately 40 hours per week, even though the exact

number of hours remain subject to the employers’ directives, as well as the amount of work

available at a given time. Some of the advantages that a hotel industry can derive from full time

workers include a greater sense of loyalty, commitment, and ability to endure the company

storms (Epstein et,al., 2014). However, employers, including the hotel industry may have

difficulties in creating and maintaining such staff due to high labour costs in taking care of health

and insurance, as well as payroll taxes. In the hotel industry for example, some of the most critical

staff employed on full time basis include chefs, financial accountants, managers, departmental

heads such as F & B managers, as well as receptionists (Epstein et,al., 2014).

Contracts or Agency

Contracts refer to temporary terms of employment under which a company employs

professionals, over a pre-specified duration. Agency hiring on the other hand, is the process
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through an organization obtains employees through an intermediate body. Such intermediate

bodies (Agencies) identify job vacancies in different companies, and provide a link through which

their affiliated professionals are recruited to fill the positions. In this case, the employees are

answerable to their agencies, other than the hotel management (Epstein et,al., 2014). The

agencies also define their salary scales, and other terms of services. The main advantage of

contracts and agent hiring is the resulting commitment, efficiency and result oriented approaches

to work. Some of the most common positions in which the hotel industry admits staff under this

category include chefs, waiters and waitresses, front office such as receptionists, kitchen

managers, general managers, food and beverages, housekeepers, and security personnel.

2.2 Roles, responsibilities and qualification requirements for hospitality staff

There are very many positions that can be held by staff members in the hospitality industry.

Below is a description of the roles, responsibilities and qualifications of three staff positions in

the hospitality industry.

Position Roles Responsibilities and qualifications

Hotel Roles and responsibilities:

receptionist Provision of excellent guidance for clients and responding to their
enquiries.
Helping in maintaining tidiness and the reception area
Dealing with reservations or cancellations as stipulated by policies of the
company they are working for
Qualifications
• Eloquence in English and good communication skills
• Diploma or certificate of higher education in any hospitality field
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Chefs Roles and Responsibilities

Cooking and preparing dishes from a wide range of recipes
Ordering for supplies required for food preparation
Planning for menus and developing innovative recipes Qualifications
Level 1 diploma in professional cookery
Good communication and teamwork skills.

Hotel Managers Roles and Responsibilities

Overseeing all operations in the hotel from front-desk to housekeeping
Advertisement of vacancies and staff recruitment
Ensuring that operations are carried out in accordance to the set standards
of the different hospitality bodies
Qualifications
Level 4 diploma in hospitality management
Excellent communication and leadership skills
Higher education degree or diploma in management-related courses

An individual with an interest in building a career within the hotel industry should attend the

relevant training from where they achieve necessary qualifications in terms of knowledge and

skills. Managerial positions require the holders to run all the departments of then hotel, and must

therefore have an extensive knowledge regarding the operation of each department. Generally,

each member of a department must acquire a deeper comprehension of skills that help to create

a positive environment not only for the clients, but also for the other workmates. Those holding

senior hotel positions often have to be equipped with additional skills for the sake of abrupt

consultations in cases of emergency and training of new employees.

Q3

3.1 Developments in the hospitality industry

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Operational

Operations in the hospitality industry have mainly been affected by the technological

advancements that have taken place to increase efficiency of operations and standard

procedures. The current automated record systems, for instance, are perfect replacements of

older manual systems, and an improvement of earlier automated versions. This makes service

delivery faster and more error free, which increases customer satisfaction (Ghose et al., 2012).

Increased competition in the industry has also led to human resource challenges like increased

employee turnovers as they are attracted to better jobs offers in other organizations. In order to

avoid this challenge, companies have implemented relevant employee motivation policies aimed

at increasing the rate of employee retention (Brotherton, 2012).

Managerial

In the hospitality industry, market forces have in the recent past had the highest influence on

management in the industry. Target markets’ tastes and preferences are highly dynamic, which

gives companies the challenge of ensuring that their products and services change with this trend

(Bowie & Buttle, 2013).

Another managerial issue in the industry is information insecurity, which has been caused by an

increase in the number of hackers who highly skilled. Given hotels or other hospitality companies

are responsible for securing their information as well as that of their clients; investments are

being made in effective security systems to limit the success of hackers (Ghose et al., 2012).
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Legislation

There is a growing increase in the level of diversity among employees and customers of

companies in the hospitality industry. Companies are therefore legally required to avoid

discrimination that may exhibit itself in any form (Boella & Goss-Turner, 2013). For employees,

recruitment, promotion and even termination should not be based on cultural or racial

backgrounds. Gender discrimination is also campaigned against.

Employee remuneration for both full time and part-time employees also needs to adhere to the

set legal standards, which also dictate the minimum wage that employees are entitled to. Failure

to adhere to these legislative policies makes companies prone to lawsuits (Bratton & Gold, 2012).

3.2 The Current image of the UK hospitality Industry

There are several elements that characterize the present-day hospitality industry in the UK.

Increase in competition between hospitality brands has led to increased innovation and service

quality as they all scramble for the market share (Malik, 2012). This is an appropriate reaction

which effectively fits the dynamic nature of the market.

The popular perception of hotels, which are a major part of the hospitality industry, is that they

are quite expensive. This has been a perception that does not only been observed in the UK hotels

and the entire tourism sector, but also across the globe (Nickson, 2013). As an alternative, there

has been cheaper bed and breakfast hotels that provide cheaper alternatives are being by a

growing number of clients. Industry celebrities and media have also made UK hospitality industry

to be recognized on a global scale, which also doubles up as a marketing strategy. A good example

is the Hell’s Kitchen Show hosted by Gordon Ramsay (Daily Mail, 2013).
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Q4

4.1 Predictions of trends and developments for the Industry

The hospitality industry has been quite successful in the recent past and is expected to maintain

this success in the future. One of the trends that are likely to emerge in relation to this is the

increase in recruitment of staff to enable sufficient service delivery. In addition to other recruits,

more people with skills in information technology will be hired to install, maintain and manage

information and security systems, design websites for companies that lack them, and maintain

an online presence on the different available social networking avenues. The other trend that is

expected is an increase in boutique hotels, as more tourists and businessmen look for cost

effective accommodation that may not be as luxurious as 5-star hotels, but offer an acceptable

level of comfort.

Developments that are anticipated include the increase in the increase in completion among

companies in the same field of the hospitality industry as well as those offering alternative

services to the same client pool. For instance, restaurants may face tough competition from other

restaurants and also contract and in-house caterers (Nickson, 2013). The other development that

is anticipated is the further development of new technology that will ease operations for

companies in this industry. It will also ease communication with internal and external

stakeholders.

4.2 Impacts of the Predicted Trends and Developments

One of the trends identified was a possible increase in employee recruitment across the

hospitality industry. The positive impact of this trend will be that during the peak season, there
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will enough staff members to ensure that all customers are well attended to (Choi et al., 2012).

The other advantage is that employees will not be overworked and thus, will have reduced work

related stresses and a better work-life balance. On the contrary, the finances that will be needed

to train them are high, and with the characteristic high employee turnover in the industry, they

may leave the company without putting their skills to use. The other challenges shall arise during

the low-peak season where revenues may be low but employees have to be paid (Brotherton,

2012).

The development that was identified was a probable increase in competition among companies

in the industry. This will lead to an increase in innovation and creativity by companies with

regards product and service provision, promotion and marketing, and employee motivation. The

overall beneficiaries of this will be the target clients (Tzeng & Chang, 2011). Whilst this will be a

good development, maintaining competitiveness is quite expensive for some companies, and

may take them a long time to recover (Bowie & Buttle, 2013). Companies that may fail to keep

up with the competition also risk a total collapse.

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