The Development and Future of the UK Budget Hotel Sector in Financial Crises - Research Proposal Example

Working The Development and Future of the UK Budget Hotel Sector in Financial Crises I. Aim of the Research This research aims to find out howthe budget hotel sector in the UK developed. It also aims to determine the future of the sector in the midst of the current financial crisis. II. Objectives of the Research The following are the objectives of the research: 1. To gather information such as primary and secondary materials about how the UK budget hotel sector developed, 2. To conduct an analysis based on certain economic theories about the future of UK budget hotel. III. Importance of the Research and How it Fits in to the Body of Knowledge This research entitled “The Development and Future of the UK Budget Hotel Sector in Financial Crises” is a relevant topic that fits in to the body of knowledge. Its importance is seen in how it operates in the current economic global situation. It may be inferred that although the UK budget hotel is only one sector, it cannot be denied that the global financial crisis has an impact on it as well. The discussion of the development of the UK budget hotel sector is important in giving inferences on how an enterprise grows into one sector whose purpose is to cater to a wide range of people. Its development which is one focus of the research is a relevant discussion that gives insights on how economic and social factors impact the development of an industry, such as the UK budget hotel. The importance of conducting this research is seen in the relevance of discussing financial crisis in today’s time, which affects almost all businesses, sectors, and industries. In the light of this financial crisis, the study shall look at the direction and future of the UK budget hotel sector. The economic theories will help direct the research in its determination of the future of the sector in order to produce a socially scientific prediction on the direction of its future. The research is also relevant in today’s era of globalization, which allows businesses to compete at a wider scope of markets. The financial crisis in which the UK budget hotel is situated is also a relevant point of discussion since it enables for a development of insights on the current global crisis situation. Hence, since globalisation, competitive advantage, and economic productivity are relevant concepts in today’s businesses, the pursuit for this research makes it an important endeavour. Likewise, the current global crisis that puts nations, trade, and businesses in a rather bad condition is an important aspect that will be necessarily touched in the research due to the topic itself. All of these considerations will be tackled in the research, making it fit to the body of knowledge which other researchers may utilise for their own. IV. Literature Review The literature review will comprise of three parts: ◊ The development of the UK budget hotel sector ◊ The globalised industry in which the budget hotel sector is situated ◊ How financial crisis affect budget hotels The Development of the UK Budget Hotel Sector Brotherton (2004) explores the critical success factors in the operations of UK budget hotel and utilises the questionnaire survey design in ascertaining the relevance of these factors in academic and trade literature. A report from Hall (2004) suggests that in over a five-year period from 1997, there was an annual growth rate of almost 20 percent in room capacity among the UK budget hotel sector. The report likewise examines key emerging trends in the sector, including the branded budget hotels’ city-centre focus. In the development of UK budget hotel, it is important to mention that the management of “commitment cultures,” the recruitment and selection procedures, and the training and development practices, which are all in the heart of human resource management (HRM) are important points to ponder (McGunnigle and Jameson, 2000, p. 404). It is suggested that firms that adopt an HRM approach put high regard on employee commitment, sophisticated and objective recruitment procedures, and good selection methods. Morrison (2002) states that there have been significant changes in the UK hotel sector in the past decade, alongside the marketplace and its operations. The study focuses on a number of western European countries particularly on the front office operations and the role of managers. Relevant issues emphasised are multi-tasking and multi-skilling, flattening of organisations, and how balance may be created between technological solutions and the delivery of quality customer care (Baum and Odgers, 2001, p. 95). The setting of procedures and benchmarking for various hotel functions as well as employee empowerment were trailed upon by the issues. The Globalised Industry in which the Budget Hotel Sector is Situated Globalisation gave way to the increasing interdependence of markets and production through trade, flow of capital across borders, cooperation, strategic alliances, mergers, and the like (Peric, 2005). Additional growth and expansion are two of the benefits that firms can acquire through international expansion caused by globalisation. In the economy, its impacts are horizontal and vertical integration strategies, tourism businesses, foreign investment in tourist attractions and hotels, and strategic alliances (Peric, 2005). Keep (2001) states that bringing about significant change may not be enough through the twin forces of globalisation and increased competitive pressures. He also stresses that service sector organisations like budget hotels cater to the domestic market rather than direct overseas competition, in which they face limited exposure. As they tend to segment the market, firms are not engaged in competition with all other firms in such sector, thus making a budget hotel aim at competing with another budget hotel (Keep, 2001, p. 20). A training gap is said to exist in one hotel group in the UK, which prevents the firms from progressing to a more strategic position within the sector (International Labour Organisation, 2001). Strategic management development was organised by the HR department in order to address this need, aiming to expose managers to the concepts of operational management. This move is viewed as conducted in reference to strategic, policy-creative posts required in today’s globalised era (ibid). How Financial Crisis Affect Budget Hotels It is important to consider that there was a recession in the 1990s which allowed for accommodation spend in the UK to shift to a real decline of 3 percent from 1990 to 1992 (Israel Hotel Association, 2008). There was a decline in occupancy rates, occurring first before a decline in room rates. The recession made the opportunity for budget hotels get wider as several independent hotels were forced out of the market as demand fell and the number of hotels and bed spaces took a declining trend (Israel Hotel Association, 2008). It caused the consumer to expect more value for his money from the services of the hotel industry as they started putting more pressure on room rates. Recovering to pre-recession levels took five years for average room rates (Israel Hotel Association, 2008). In this scenario, there was a need to use blanket discounting as a strategy to drive up demand during periods of lower seasonal demands both in luxury hotels and the budget hotel services. Tight cost control measures were adopted in most hotel businesses in dire need of countering decline in revenues and maintain margins (Israel Hotel Association, 2008). There is a record of shrinking of services industry in the UK, including the budget hotel sector. The Charted Institute of Purchasing and Supply (CIPS) states that hotels are among the areas worth it by financial crisis as costumers cut on their spending (Price Waterhouse Coopers, 2008). Although hotel industry is faced with the problems of financial crisis, there is still a need to ensure that they are able to address key fundamental priorities in line with hotel management, such as hands on approach to cash management, cost-base management, and networks with stakeholders (Price Waterhouse Coopers, 2008). It is likewise inferred by Price Waterhouse Coopers that in terms of registering the impact of either positive or negative economic trend, hotels have a tendency to become a late cycle industry. As analysis of historic performance data shows, it takes 6 to 12 months for hotels to record a change in performance within the wider economy (Price Waterhouse Coopers, 2008). As the financial crisis tends to proceed to a deeper level causing consumer spending to be reduced, recent months show decelerated growth in the hotel business. The current economic downturn has created an impact on hotels across UK in which a marginal decline of 0.6 percent in REvPar is shown (Price Waterhouse Coopers, 2008). V. Methodology This research shall utilise the qualitative approach as the appropriate research approach of the study. In particular, it shall employ the case study method, focus interview method, and survey questionnaire method as primary means of data collection. These methods shall serve as elements for research triangulation whose aim is to validate the findings of the study. Qualitative approach, as used in this research, is concerned primarily with process, rather than outcomes or results. It is likewise interested in meaning, how people view their lives, and experiences. In such, qualitative research involves field works since the researcher needs to reach people for relevant data collection such as through case studies, interview method and the survey questionnaire method (Bautista, 1999, p. 142). This research, being qualitative, is descriptive and will be addressed by the mentioned methods employed. By being descriptive, the research is interested in process and meaning. Through the research methods to be utilised in the research, the study follows an inductive mode through abstractions, concepts, hypothesis, and theories from details (Bautista, 1999, p. 142). Case Studies As mentioned, the case study is a method that will be utilised in this study, which entails selection of a particular level of analytic interest such as a person, a group, or an organisation (Bautista, 1999). This research shall use case studies of budget hotels from focus interviews with relevant individuals as well as secondary materials. A case study normally focuses on a particular organisation, which can be a group, a department, or the entire firm itself (Yin, 2008). Its usual objective is capturing how a particular organisation has evolved or constituted as well as how it normally carries out its regular activities (Stake, 1995). The major thrust of this method is characterising how it operates in reality (Bautista, 1999). By using the case study method, the researcher focuses on the sequent laity of events in context, as well as the wholeness of the individual (Stake, 1995, p. 2). Survey Questionnaire Method In the survey questionnaire method, respondents determine the conditions they are willing to be affected by and help the researcher in reconstructing past events and predicting prospective events (Bautista, 1999). Surveys can provide descriptive arguments through its characterisation of a given event, person, element, or process (Fowler, 2008). There is thus a need to identify the group that will serve as the focus of the study as well as the need to determine the number of samples (Fowler, 2008). Focus Interview Method As this study shall utilise the focus interview method for gathering primary data relevant to the topic, the researcher can hence control the quality of the result of the interview (May, 2001). Organising the interviewing process in detail is an important process in order for the interview to proceed smoothly. Sampling is an important aspect of this method, in which the researcher has to select the sample carefully (Berg, 2001). It is important for the researcher to keep in mind that bias should not have a room in gathering data through the focus interview method (May, 2001). Bibliography Bautista, V. (1999) Research, UP Open University. Brotherton, B. (2004) Critical success factors in UK budget hotel operations, International Journal of Operations and Production Management, Vol. 24 (9), p. 944-969. Baum, T. and Odgers, P. (2001) Benchmarking best practice in hotel front office: the western European experience, The Haworth Press. Berg, B. (2001) Qualitative research methods for the social sciences, Allyn and Bacon. Fowler, F. (2008) Survey research methods, SAGE Publications. Hall, R. (2004) The UK Budget Hotel Sector, CAB Abstracts. International Labour organisation (2001)Human resources development, employment and globalization in the hotel, catering, and tourism sector, International Labour Office, Geneva. Israel Hotel Association (2008) Trends in the global hotel industry, PKF International. Keep, E. (2001) Globalisation, models of competitive advantage and skills, SKOPE Research Paper No. 22, University of Oxford. May, T. (2001) Social research: issues, method, and process, Open University Press. McGunnigle, P. and Jameson, S. (2000) HRM in UK hotels: a focus on commitment, Employee Relations, Vol. 22 (4), p. 403-422. Peric, V. (2005) Tourism and globalization, 6th International Conference of the Faculty of Management, Koper Congress Centre, Slovenia. Price Waterhouse Coopers (2008) Hotels: managing in a downturn, Hospitality and Leisure, PWC. Morrison, A. (2002) Small hospitality businesses: enduring or endangered? Journal of Hospitality and Tourism Management, Vol. 9 (1) p. 1-11. Stake, R. (1995) The art of case study research, SAGE Publications. Yin, R. (2008) Case study research: Design and methods, SAGE Publications. Read More