Hospitality Management - Industry Sector Evaluation - Essay Example

Hospitality Management - Industry Sector Evaluation Introduction:        This paper is a briefing document or a report and the intention is to present a report on budget hotels. Hotels are of two types, such as budget hotels and elegant hotels. A budget hotel implies a specific part in the hospitality industry in which customers are offered a clean and a short lodging within their required budget.     Hospitality industry is an important sector that provides many opportunities and jobs to the people. This industry is more about service sectors like tourism and hotel sector. Hospitality industry is worth of billions of dollars that spreads across the globe. Hospitality industry is more popular and strong in developed nations and developing countries. Hospitality is related with tourism industry, and tourism industry is very big and vast. The word hospitality is defined as “the friendly and generous reception and entertainment of guests, visitors, or strangers” (Philosophy of Hospitality 2010, para. 1). Current structure:        Food, accommodation are served and offered in hospitality, it has turned a big business in this century. In this paper, more focus is given to budget hotels. Budget hotels are a very significant part of hospitality industry, because majority of the business people, tourists etc are using budget hotels when they are traveling for their official and personal purposes. Many surveys have proved that business people are mainly using budget hotels to stay. The main reason for preferring budget hotels is because of low cost and good ambience and services including food, entertainment etc. Majority of tourists prefer budget hotels because they are looking for good stay in reasonable and affordable price. Budget hotels are targeting upper middle class and middle class people as their customers. There are many hotels that offer good stay and nice food for their customers and the pricing would be really reasonable. It would help the hospitality industry to grow strongly, especially budget hotels. Many of the people who prefer budget hotels are satisfied with the price and services, it is because of the skill of marketers to read customers mind. The marketers know very well that by providing good accommodation and food for lesser price could attract more customers to it. In many countries governments are strongly supporting the tourist industry and budget hotels because through that they could attract more tourist customers. Budget hotels are really linked with the hospitality industry. The current status of budget hotels is interesting, because more and more budget hotels are being initiated in many countries. Recession, inflation and economic crisis have affected hospitality industry, but the hospitality industry is still hiking, so there is more hope or the budget hotels around the globe. Majority of the middle class people prefer budget hotels, so always there would be demand for budget hotels and it services.  More information regarding budget hotels are given in coming portion.        The current status of hospitality business creates lot of opportunities. During tourist season, the graph of hospitality industry would reach in a peak; in off season also it has good business. Various organizations have taken over the responsibility of hospitality management by offering good and variety of offers to them. It is more related to tourism, thousands of tourists are moving around the world to visit places as a part of their leisure trip. For these tourists certain things are needed, such as accommodation, food, entertainment etc. These needs are satisfied by the hospitality management team by offering tourists various things in order to satisfy their requirements. This industry is progressively a more aggressive sector, because more and more competitors or new entrants are coming to this industry. “Hospitality management involves the planning, organizing, directing and controlling of human and material resources within the lodging, restaurant, travel and tourism, institutional management, recreational management and meeting and convention planning industries” (Gailliard 2008).    When we discuss about the past, Hospitality business is one of the aged industry in the world. In the ancient times also people used to travel around the world, so there were also needs of some places for them to stay, eat, and see. At that time itself, this industry had its own importance and variety. The word variety I used was for making this industry unique from others, because this industry is more about serving the customers and ensuring their satisfaction by offering them various services like food, accommodation, entertainment, event management etc. “One of the fastest growing sectors of the economy of our time is the hospitality industry. The hospitality industry alone is a multi-billion dollar and growing enterprise. It is exciting, never boring and offers unlimited opportunities” (Gailliard 2008).       . The future of the hospitality industry, especially budget hotels would be definitely great and it would grow more and more by creating more opportunities. Small economic fluctuations also could affect this industry, but in the future it would definitely grow higher and higher by utilizing the opportunity of globalization, because globalization is very strongly related to hospitality industry. An analysis of the sector’s consumers Customer analysis can usually be done on the basis of classification of customers on basis of their age, education, income, place and how much people spend on traveling.  The budget hotel has a separate variety of customers. The hotel industry is segmented using a mixture of price, service and the facilities that the hotel provides. It has been found through various researches that budget hotels are usually occupied by more business users and less leisure tourists. “The research has also indicated to us that 59% of budget hotel consumers are business users and about 31% are leisure/tourist consumers” (Colbu & Scutariu 2008, p. 176).        The most important customers of budget hotels are business travelers. These business travelers are also of two types. One group of business travelers, who consider the business job as truly expensive will not be able to consider budget hotels in place of the elegant hotels. The business travelers are usually who take short term trips and therefore they usually occupy budget hotels. Education factor does not play a role in the budget hotels. This is because the budget hotels are more dependent on a person’s income. Education wise, the only matter which can be stated is that budget hotels are small hotels or hotels with fewer facilities. So if a person comes from a good educational background then he might not simply love the elegant hotels because the elegant hotels are far more costly than the budget hotels. The customer might also be reluctant to spend high costs on elegant hotels and thus might adopt budget hotels. “Budget hotel product concept offers more value for money to the new value-conscious travelers, and why the product is proving particularly successful in pulling customers down from the full-service segment” (Fiorentino 1995).        The people who choose to opt for budget hotels are usually price sensitive and they are concerned about the cost of the hotel or the accommodation, which they consider. The budget hotels comprises of customers from upper middle and middle class. “The budget hotels accommodate customers from upper middle and middle class” (Hotels in India 1999).        The income of a person plays a high role on a person’s choice on his hotel accommodation. In the budget hotels, the income of a person is not very important because usually the budget hotels come within the low and middle income range group. Therefore usually the customers of the budget hotels do not have a very high level income. Hospitality sector’s employment trends, work patterns and labor markets, employment practices:     The hospitality industrial sector employed few numbers of people in last few years, because of the emergence of new technologies in the industry. But in the period of 2010 -11, compared with other industry, hospitality industry hired more employees. “Recent improvements in hotel occupancy levels and brighter forecasts for 2011 signal a recovery as more business and leisure travelers pack their bags” (Womack 2011). The employees feel more optimistic and they are open to new opportunities being created by developing economic situation in the industry. In UK, the hospitality industry is fifth largest employer, where they directly employed 2.4 million peoples. “There are an estimated 400,000 jobs in hotels and related services; 1.26m jobs in restaurants, 750,000 contract catering and in-house catering jobs; and 20,000 jobs in event management – all figures include an estimate of temporary agency employment” (Hospitality Industry is UK’s Fifth Largest Employer 2010,  para. 7). And they are expected to provide 2.66 million employments by 2015. They are one amongst the contributors for wellness of UK economy. “UK demographic changes are likely to impact on the industrys skills supply. 40% of the sector’s workforce is under the age of 25, but the age of the workforce in England is rising. The result is an increase of older workers in search of employment security and career progression which the hospitality sector does not necessarily offer. There has, however, been an increase in the number of employees aged 30-49 since 2001” (Current and Future Skills Needs in the Hospitality Sector and Sub-sectors 2002, para. 5).       In the hospitality sector qualification, training and skill gaps are the important issues. In the labor market hospitality sector “demand for part-time, casual and seasonal employees provides opportunities for low-skilled employees who are at a disadvantage in the labor market. Low-skilled employees in turn provide the industry with the seasonal flexibility it requires” (Hospitality Education & Training 2004, para. 1). But now the situation has changed as they got training for their skills development and industrial development. Work pattern and labor market in hospitality sector are changed.  New technology has highly influenced the sector, especially communication channels.  All companies are running with the help of Internet and other technological services.  Conclusion:        The budget hotels are an important part in the hospitality industry and this sector has gained importance in the present days with a realization about customers of not becoming necessarily spendthrift on elegant hotels. The budget hotels have specific customers and the sector is developing latest trends in order to widen its popularity.   Reference List Colbu, LC. & Scutariu, AL. 2008. Aspects Regarding the Consumer Buyer Behaviour for Budget Hotels in Ireland. Ananlele Stiintifice Ale Universitatii. [Online] Available at [Accessed on 13, December 2011].  Current and Future Skills Needs in the Hospitality Sector and Sub-sectors. 2004. NGRF. [Online] Available at [Accessed on 13, December 2011].  Fiorentino, A. 1995. Tourism Management: Budget Hotels: Not Just Minor Hospitality Products. Sciencedirect. [Online] Available at [Accessed on 13, December 2011].  Gailliard, F. 2008. The Hospitality Industry. The Black Collegian. [Online] Available at [Accessed on 13, December 2011].  Hospitality Industry is UK’s Fifth Largest Employer. 2010. British Hospitality Association. [Online] Available at [Accessed on 13, December 2011].  Hospitality Education & Training. 2004. NGRF. [Online] Available at [Accessed on 13, December 2011].   Hotels in India. 1999. Mapsof India. [Online] Available at [Accessed on 13, December 2011].   Philosophy of Hospitality. 2010. Rivers Edge. [Online] Available at [Accessed on 13, December 2011].   Womack, J. 2011. Hospitality Employment Trends: What to Expect in 2011. Hotel Business Review. [Online] Available at [Accessed on 13, December 2011].   Read More