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Introduction of Discussion on The Contemporary Hospitality Industry Assignment
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The hospitality industry is currently one of the most popular and lucrative businesses in the United Kingdom because the industry contributes a lot to the GDP (among 14%) of the United Kingdom. There are also different types in the hospitality industry that help to collect profits from different sources, such as food and drink service, lodge service, travel and tourism service, and lots more. The Hilton Hotel is one of the most popular lodging and hotel companies in the United Kingdom, and Virgin Holiday is one of the leading travel and tourism companies in the United Kingdom. This study will discuss in detail the organisational structure and internal, external factors of these two companies.
A. Examine the current structure, scope, and size of the hospitality industry
i. Explore the different types of business within the hospitality industry
Hilton hotels (lodge-based hospitality company)
Current structure
The Hilton Hotel is one of the most popular hotel companies in the United Kingdom, which is now well known in the domestic market as well as in the international market. Functional organisational structure is followed in managing the company, and the CEOs, managers, HR, and employees of the company are equally important to follow this structure (hilton, 2021).
Scope
One of the scope of this company in the market is to make this business more scalable so that the product is equally successful in multiple markets (hilton, 2021).
Size of this company
Combining domestic and international markets, the company has a large number of hotels that are helping to reach customers. The objective of the company is to understand the market situation and deliver services which will help in increasing profit margins while attracting customers (hilton, 2021).
Virgin Holidays (Travel-based Hospitality Company)
Current structure
Virgin Holidays is one of the most popular travel and tourism companies in the United Kingdom. The management team of this company follows the flat organisational structure in conducting the business, it means, the CEO of the company has all the control of the company and the CEO of the company directly informs the other stakeholders (virginatlantic, 2020).
Scope
The scope of this company in the United Kingdom market is to provide luxury service to customers at competitive prices, and this has helped to increase the customer base of the company (virginatlantic, 2020).
Size of this company
The company has hundreds of outlets in the United Kingdom market that are helping the company reach out to customers.
ii. Analyse how global growth, franchising, and licencing helps to growth in hospitality industry
Globalisation has created a lot of opportunities for growth in the hospitality industry. As mentioned by Varelas and Apostolopoulos (2020), globalisation has easily opened up the international market for hospitality companies, and this is why the hospitality industries are able to generate much more revenue from the domestic and international markets.
Growth of hospitality industry in UK
(Source: Kim et al., 2019)
Some experts also believe that globalisation has led to an increase in foreign travel, and this has a positive effect on the company's (hotel industry) performance (Kim et al., 2019). Hilton's management team also states that most of the company's profit margins depend on the international market (hilton, 2021).
The hospitality industry is also growing due to franchising management. As noted by Wang et al., (2019), when a company buys other small companies and sells its products and services to those companies, it is called franchising business. The hospitality industry has many advantages in exporting services due to this franchising business which is one of the reasons for the growth of this industry.
Statistics of growth of franchising business in the hospitality industry
(Source: De Boni and Forleo, 2019)
Exporting services to the franchising business greatly reduces the cost of the hospitality industry (De Boni and Forleo, 2019). This is why Virgin Holidays is using Franchising Strategy to expand its business in the international market.
On the other hand, due to globalisation, it is very easy to get the support of governments of different countries to expand business in the international market, And this is why the licensing management of the hospitality industry can be considered as one of the reasons for the success of this industry (Rahman, 2018).
B. Explore current and anticipated skills requirements in the hospitality industry
i. Investigate a range of different operational roles within the hospitality industry
There are multiple empowerment roles in the hospitality industry that are enriching the industry, such as
Service department
The service department has a wide range of responsibilities in the hospitality industry because besides directly interacting with the customer, various types of room services also try to satisfy the customer by providing washroom service. For this reason, all these employees are trained with the help of customer relationship model (Bayighomog et al., 2020).
HR department
The job of the members of this department is to conduct employee selection and training as well as to conduct customer complaint analysis. This team has a huge role to play in improving the service structure in the hospitality industry (Viglia and Abrate, 2019).
Marketing department
Employees associated with this department interact with customers through marketing and social media handling. In addition to retaining customers, the goal of these team members is to attract new customers (Viglia and Abrate, 2019).
Kitchen staff
In the case of hotel services, the responsibility of managing the hotel canteen rests with these stakeholders, and in this case too, the stakeholders fulfil their responsibilities according to the customer relationship model.
ii. Analyse the impact that skills gaps have on hospitality businesses
Lack of soft skills in employees
In many cases it is seen that there is a great lack of soft skills among the employees, and as a result, employees behave badly with customers. Employees represent the hospitality company through their responsibility; therefore, the bad behaviour of the employees has a negative effect on the popularity and brand value of the company (Hajli et al., 2020).
Cross-cultural language issues
Cross-cultural issues are a big problem in the hospitality industry because in order to run this industry you have to provide domestic customer service as well as international customer service, and in this case, the employees face a lot of problems to work with the customer (Ribeiro et al., 2019).
Solutions:
Employees need to be well trained to solve soft skill-related problems, and in this industry, there is always a need to select skilled and experienced employees for employee selection (Ribeiro et al., 2019). By training the employees well, the Behaviour and Attitude Improvement of the Employees is required.
On the other hand, employees need to focus on educational knowledge and language skills to solve cross-communication issues. In this case, the employees can be given a lot of advanced training and there will be a lot of responsibility in human resource management. Human resource management will not be too much of a problem to solve this problem.
iii. Explain the interrelationships between the departments (Organisational chart)
In the case of organisational charts, Hilton's management team follows a functional organisational structure (hilton, 2021).
Functional organisational structure
(Source: Mrusek et al., 2021)
The CEO of the company informs the various management teams to follow the functional organisational structure, and the management team communicates with the employees and the strategy is implemented.
Virgin Holidays management team follows a flat organisational structure (virginatlantic, 2020).
Flat organisational structure
(Source: Varelas and Apostolopoulos, 2020)
In the case of flat organisational strategies or organisational charts, the company's CEO directly informs other stakeholders. As a result, it is much more convenient for the CEO of the company to understand the actual nature of the company.
C. Review the internal and external factors that impact the hospitality industry
i. SWOT analysis
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Strengths
? The hospitality industry is directly dependent on the government as a country's economy depends heavily on it. This helps increase the company's profit margin.
? The customer retention capability of this industry is much higher than that of other industries, so it is more likely to increase profit margins (Kim et al., 2019)
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Weaknesses
? Employees in this industry fear that the company will lose its popularity because its brand value depends on its behaviour.
? The structure of this industry is so flexible that one wrong policy can endanger this industry (Wang et al., 2019).
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Opportunities
? In this industry, company executives closely analyse all company situations, and because of this, the risk factor in this industry may be much lower in future.
? Due to the high employee satisfaction rate in this industry, this may strengthen the structure of the industry in the future (De Boni and Forleo, 2019).
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Threats
? Due to the fact that this industry is becoming more and more competitive at present, it is becoming more and more difficult to develop a stable policy.
? Training skilled employees and employers can be a big threat to the industry (Bayighomog et al., 2020).
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ii. PESTLE analysis
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Political factors: The hospitality industry is most affected by political factors. As suggested by Viglia and Abrate, (2019), due to the political factor, the government policy of different countries changes a lot, and as a result, there is a lot of negative impact on the international market, which is a big problem for this industry.
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Economical factors: The economic factor is another very important factor that has a profound effect on the industry. For example, if the financial position of a company is very weak then the industry cannot make much profit in those countries because the hotel and travel business is compared to the luxury business.
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Social factors: The issue of social economy also has a huge impact on the hospitality industry because the popularity and brand value of any of these industries depends on the socio-economic factor (Hajli et al., 2020). Therefore, this issue also has an effect on this sector both positively and negatively.
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Technological factors: With the hospitality business now becoming online-based, there are many benefits for companies to target international market customers. It can be said that due to this online-based business, this industry is getting much bigger, and this is one of the reasons why the industry is so successful and its revenue margins are soaring.
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Legal factors: This is also a very important issue for the hospitality industry because in this case to the industry has to depend on the government. In this case, an aggressive policy from the government can expose the pros and cons to the industry. Therefore, the hospitality industry has to develop its own strategic decision based on this.
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Environmental factors: Hospitality business is becoming more and more sustainable at the moment and this is helping to increase the company's revenue margin despite rising costs. As mentioned by Ribeiro et al., (2019), sustainable Business is increasing the corporate social responsibility of this industry which is a very good thing for the society.
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D. Analyse the current and potential trends affect the hospitality industry
Safety and hygiene
The hospitality industry is currently focusing on safety and hygiene. For example, Hilton's management team follows this issue closely, emphasising the health and safety of employees and customers (hilton, 2021). However, n this case, the company's sustainability is increasing, but the company's costs are increasing, which is a big negative.
Using technology
Technology is being used extensively in the hospitality industry today, which is enriching the industry. For example, chatbox is being used by Virgin Holidays' management team on their official website, and as a result, customers are having a lot of benefits in customer retention as they are interacting directly with this company (virginatlantic, 2020).
Conclusion
After discussing the above entire study, it can be concluded that the biggest issues for the hospitality industry are market conditions, demand, and any chemical factors. The study found that although Hilton and Virgin Holidays have different business policies, they try to control the business process in almost the same way. The most important issue for the hospitality industry is customer and employee retention which is well understood from this research. Globalisation has created a lot of opportunities for growth in the hospitality industry.
Reference list
Bayighomog Likoum, S. W., Shamout, M. D., Harazneh, I., and Abubakar, A. M. (2020). Market-sensing capability, innovativeness, brand management systems, market dynamism, competitive intensity, and performance: an integrative review. Journal of the Knowledge Economy, 11(2), 593-613. Accessed on 13.4.22
De Boni, A., and Forleo, M. B. (2019). Italian halal food market development: drivers and obstacles from experts’ opinions. Journal of Islamic Marketing. Accessed on 13.4.22
Hajli, N., Tajvidi, M., Gbadamosi, A., and Nadeem, W. (2020). Understanding market agility for new product success with big data analytics. Industrial Marketing Management, 86, 135-143. Accessed on 13.4.22
hilton (2021). Corporate report. Available at https://www.corporatereport.com/hilton/2021/ar/ Accessed on 13.4.22
Kim, Y. H., Barber, N., and Kim, D. K. (2019). Sustainability research in the hotel industry: Past, present, and future. Journal of Hospitality Marketing and Management, 28(5), 576-620. Accessed on 13.4.22
Mrusek, N., Ottenbacher, M. C., and Harrington, R. J. (2021). The impact of sustainability and leadership on the innovation management of Michelin-starred chefs. Sustainability, 14(1), 330. Accessed on 13.4.22
Rahman, S. (2018). Emerging built heritage commodification of boutique hotels in world heritage site: Evidence from George Town, Penang, Malaysia. Planning Malaysia, 16. Accessed on 13.4.22
Ribeiro, M. L., Vasconcelos, M. L., and Rocha, F. (2019). Monitoring performance indicators in the Portuguese hospitality sector. International Journal of Contemporary Hospitality Management. Accessed on 13.4.22
Varelas, S., and Apostolopoulos, N. (2020). The implementation of strategic management in greek hospitality businesses in times of crisis. Sustainability, 12(17), 7211. Accessed on 13.4.22
Viglia, G., and Abrate, G. (2019). Revenue and yield management: a perspective article. Tourism Review. Accessed on 13.4.22
virginatlantic (2020). Annual report. Available at https://corporate.virginatlantic.com/content/dam/corporate/Virgin%20Atlantic%20Annual%20Report%202020_final%20v1.pdf Accessed on 13.4.22
Wang, S., Hung, K., and Huang, W. J. (2019). Motivations for entrepreneurship in the tourism and hospitality sector: A social cognitive theory perspective. International Journal of Hospitality Management, 78, 78-88. Accessed on 13.4.22
