Critical Analysis of Hospitality Industry - Research Paper Example

? Research Project Research Project Table of Contents Introduction…………………………………………………………………….3 2. Critical Analysis and Recommendation…..…………………………………..3 3. Conclusion………………………………………………………………………5 4. References………………………………………………………………………6 Introduction Aims and Objectives This research projects looks at the hospitality industry and aims to provide to a hospitality company the critical analysis of hotels. Through the course of its contents this research project highlights areas in the hotel that need improvement and based on research, proposes solutions to said problem areas. Methodology This research project provides analysis of research material pertaining to the effective, strategic and efficient management of a hotel and includes a detailed stakeholder analysis by drawing on that research. Limits of Research The methodologies and strategies mentioned in this research project are generally applicable to any enterprise in the hospitality industry; however, some limitations may arise in very specific cases where a more customized approach may be necessary. Critical Analysis and Recommendations Hospitality and tourism are two of the world’s industries that are experiencing the most dynamic and rising growth levels. Combining the two industries are entrepreneurial ventures regarding hotels which become a bridge between the hospitality and tourism industries. Slattery (2002) talks about how in this modern day and age the element of ‘hospitality’ has been lost from the hospitality industry due a more industrialized approach towards hospitality ventures. According to this paper, this element has been impaired by the industrialized commercial vision and to restore it we need to understand hospitality as a “social phenomenon involving relationships between people” and thus incorporate the “social factor” in the provision of services in any hospitality business. This research further goes on to say that to better understand hospitality we need to understand how it works in private settings, for example that of a nuclear family. Insight from this setting will make hospitality ventures better able to provide food, accommodation and other services. However, focus shouldn’t be limited to private settings for hospitality enterprises are after all business ventures and requires a very important commercial market interaction. The venture can be successful only if adequate attention is paid to all three domains. (Slattery, 1998). Further, the nature of hospitality is of crucial importance for hotels and their effective management. However, this aspect is mostly overlooked. To be more effective, management needs to factor in aspects of human behavior to better understand how to serve their clients in a more superior manner. (Brotherton and Wood, 2007). A feasibility study is also important and may take the developers months to collect the data that provides enough favorable economic argument to build a hotel. (Rutherford and O’Fallen, 2007). This is a very important step and must not be missed because future operational success builds on it. Another major concern in the modern world of globalization, expansion and technological progress is that businesses should be more concerned about ‘going green’ and not waste the earth’s resources that are available for their consumption, but devise ways through which these resources can be conserved. Hotels are a business in which the energy and resource consumption levels are high because they entertain a lot of people at one time. However due to their extensive consumption patterns they also have a higher responsibility to conserve resources and energy. Hotels, like other hospitality businesses are supposed to factor in sustainability and work to reduce their environmental footprint. Hotels that are conscious of this and appropriately address issues of water and waste management, energy conservation and limiting emissions etc are given the ‘Green Globe’ certificate by the United Nations. This works to enhance the hotel’s standing and name in the industry. In addition to this, these practices help hotels cut costs and become more efficient and thus ‘going green’ has become top priority for hotels. (Ernst & Young, 2008). The theory of reasoned action is also crucial for hotel management for it explains what choices need to be made and implemented in marketing strategies and decisional processes that will enable the hotel to be successful. Beliefs, evaluations and normative facts become important points to look at under this theory. (Buttle and Bok, 1996). A stakeholder analysis is also important. There are three categories of stakeholders, owners, large corporations and individual travelers. The hotel must be manages such that it caters appropriately to these three stakeholder segments because keeping them satisfied is vital for successful business running. (Diener, Parekh and Pitera, 2008). A SWOT analysis becomes crucial at this point to make certain the strengths, weaknesses, opportunities and threats pertaining to hotels in the hospitality sector. Hotels have many strengths; people are always travelling and looking for places to eat, in this regard hotels are at an advantage because they will always have a steady stream of potential customers, hotels offer a plethora of job opportunities even for less qualified people and thus are of economic benefit, they also operate as part of an international market with many hotels operating as ‘chains’ in different countries worldwide, it is a flexible industry and changes can be incorporated to accommodate any specific factors that may come up. However, on the not so bright side, hotel business has its weaknesses too. There is a high dependency on tourists as customers, the flow of who may vary in different times of the year, high seasonal dependency, the productivity is low and so are profit margins. But the picture is not only black and white; shades of grey have to be incorporated in terms of opportunities and threats. Opportunities are in the form of more women entering the labor market and providing hotels with the much needed labor for their running, higher value to quality service is beneficial to the business, factoring in sustainability and environmental friendly practices appeal to large consumer segments and finally increasing globalization means that hotels are now catering to domestic as well as more foreign guests. There are also threats; availability of skilled personnel is low, hotel sectors generally give less importance to how they treat their employees and what benefits they make available to them and this may hurt recruitment, further, recent issues of terrorism and political unrest may damage the volume of people who go to hotels. (Oxford Research, 2007). Conclusion Entrepreneurs in the hotel business need to think strategically. For this they need to incorporate six steps in their management; be focused on intent, be comprehensive, be opportunistic, gear up for the long term, build on past experiences and develop and implement a suitable hypothesis. Further, the hotel needs to employ a practice called segmentation whereby hotels achieve growth and increase in customer base. The hotel needs to be able to leverage its human resources to gain that extra edge over its competitors. (Enz, 2009). Strategic management needs to incorporate some steps; setting objectives, assessment of internal and external factors, finding out strategic advantage, conduct gap analysis, based upon these determine strategic choice and finally implement it. (Reichel, n.d). Attention should be paid to setting the price, which should be at a level that guarantees consumer satisfaction as well as positioning the hotel in a favorable spot. Overall positioning should be such that it retains consumer satisfaction and enables increased revenues in the long run. (Shaw, 1992). - References Slattery, P. (2002). Finding the Hospitality Industry. Journal of Hospitality, Leisure, Sport and Tourism Education, Vol. 1, No. 1. Ernst and Young. (2008). Hospitality Going Green. Global Hospitality Insights. Brotherton, B. and Wood, R. C. (2007). Key Themes in Hospitality Management. Hospitality Management (SAGE Handbook), p35-61. Oxford Research. (2007). Hotels and Restaurant Sectors. European Community Program for Employment and Social Solidarity. Enz, C. A. (2009). Hospitality Strategic Management: Concepts and Cases, 2nd Edition. John Wiley and Sons. Shaw, M. (1992). Positioning and Price: Merging Theory, Strategy and Tactics. Journal of Hospitality and Tourism Research, 15:31. Reichel, A. (n.d). Strategic Management: How to apply it to Firms in the Hospitality Industry. The Service Industries Journal. Diener, M. L., Parekh, A. and Pitera, J. (2008). High Performance Hospitality. Sustainable Hotel Case Studies. Rutherford, D. G. and O’Fallen, M. J. (2007). Hotel Management and Operations, 4th Edition. John Wiley and Sons. Buttle, F. and Bok, B. (1996). Hotel Marketing Strategy and the Theory of Reasoned Action. International Journal of Contemporary Hospitality Management, Vol. 8, No. 3. Read More