Analysis of the Hospitality Industry

The Hospitality industry

The word ‘hospitality’ derives from the Latin word ‘hospes or hospitalitas’; meaning host or hospitable towards guests or strangers, with the host being expected to make sure the need of the guest is met. Historically hospitality involved welcoming strangers/travelers and offering them food, shelter, safety and maybe some form of entertainment in an establishment such as a guest house or an inn.

In the modern day this practice has mostly remained the same, however, the scope and size in this day and age have dramatically changed into a complex industry that covers a broad spectrum of organisations, locations, activities, and economic bracket.

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The hospitality industry is a multi-billion pound industry that mostly depends on the availability, leisure time and disposable income. A hospitality unit such as a restaurant or a hotel consists of many facets; such as facility maintenance, operations, human resources, and sales and marketing.

Hospitality industry sector classification

The hospitality industry is a diverse and highly competitive industry with significant overlaps in other sectors, its services and enterprises can range from food services to accommodation. It is divided into sectors including food services, accommodation and lodging, events, entertainment, recreation, and tourism services. There is 4 main classification of the hospitality industry. These are:

1. Food and drinks services

The food service industry is one the most important sectors of the hospitality

industry and also overlaps with other sectors within the industry.

Main areas of food services are to cater food and beverages to its clients, guests and

customers.

Organisations within the foodservice industry:

•     Restaurants

•     Takeaways

•     Catering services

•     Cafés

•     Pubs

•     Events planning and exhibitions

•     Motorway services

•     Retail stores

•     Licensed trade

•     Events and exhibitions

2. Accommodation and lodging

Accommodation is an absolute broad and the most important sector of the hospitality industry spanning the entire globe. Accommodation is provided by a number of establishment ranging from very basic lodging which includes shared or basic washing facilities to luxurious lodging which can include spas and state of the art gym facilities to Michelin star dining experience, this establishment ranges from:

•     Bed and breakfast

•     Hotels

•     Hostels

•     Floatels

•     Self-catering

•     Camping grounds, recreational vehicle parks, and trailer parks

•     Facilities offering lodging services

•    Holiday and other short-stay accommodation

3. Travel and tourism

The United Nations World Tourism Organisation defines tourism as:

“the activities of persons identified as visitors. A visitor is someone who is making a visit to a main destination outside his/her usual environment for less than a year for any main purpose [including] holidays, leisure and recreation, business, health, education or other purposes ….This scope is much wider than the traditional perception of tourists, which included only those travelling for leisure”. The travel and tourism industry is a vast sector of the hospitality industry which plays a pivotal role across the globe. In a nutshell, the travel and tourism industry is in the business of moving people from one destination to another. Like all other sectors-they are also customer service focused.

The travel and tourism sector include:

•     Trains

•     Cruise ships

•     Airlines

•     Cabin crews

•     Travel agents

•     Tour operators

•     Leisure centre

•    Visitor attractions

•     Botanical and zoological gardens and nature reserve activities

•     Museum activities and preservation of historical sites and building

4.Entertainment sector

The entertainment sector is a key category within the hospitality industry as it involves the most important aspect of the hospitality industry – that is to provide entertainment. Activities and entertainment that elevate experience are:

•     Sports and gaming – including Esports

•     Cruises

•     Nightclubs

•     Bars

•     Casinos

Another emerging sector of the hospitality industry is vacation ownership of a place or venue for a specific duration period during the year. Timeshare gives an option to acquire and enjoy facilities by either buying or hiring part of a facility, venue or subscribing to a membership plan. During this time period, the buyers or members can occupy the property or a venue for their own purpose. There are many places and venues which people can own for the time being, places and venues such as:

•     Convention Centres: Convention centres make the base of the hospitality

the industry as they offer a place where people can gather in bulks for seminars,

conventions, expos, and other similar activities.

•     Villas and Resorts: villas and resorts can be owned under the timeshare rule

for some time of the year so that it can be enjoyed with friends or family.

Operational and functional department in hotels

Full-service hotels have six specific functional departments and divisions, these form the foundations of all operations. These functional departments are further divided into two categories; Front house and back house, with the front house, having a high level of guest interaction and the back house having the least but more towards human resources, maintenance and payroll. Below is a diagram with the breakdown of functional departments by their divisions and a brief summary of each department:

diagram showing operational and functional departments in a hotel (Elen 2013)

Functions of Front of House Operations

Front of house refers to all actions and areas that a customer will be exposed to during their stay. Employees who work in front of house should be well presentable, have excellent hygiene and adopt a professional, welcoming demeanour at all times. This group consists of:

•     Room Division: “Everything Begins with the Rooms Division” (Ismail 2002, p.97). Room division is the primary receiver for the guests, their visit and source for guests information, as the main purpose for guests to visit a hotel is for lodging.

•     Sales & Marketing: This department exists to ensure the hotel maximises its revenue, to ensure they are continually filling rooms and making the most out of every available revenue source through marketing and sales pitch.

•     Food and Beverage: The main responsibilities for the food and beverage department are the kitchen(s), restaurant(s), lounge/bar(s) and room service within a hotel establishment. (Ismail 2002, p.101)

Functions of Back of House Operations

Front of house encompasses all the behind-the-scenes areas that guests will not see and has the least interaction with guests. It also serves as a place for employees and managers to do administrative work.

•     Human Resources are responsible for recruiting, screening, interviewing and placing workers. They may also handle employee relations, payroll, benefits, training, and career progression

•     Engineering: This department is responsible for the overall maintenance and improvement of the building structure, the ensure the safety of all staff and guests within the boundaries of the establishment. They will occasionally outsource certain functions to a third-party specialist and are responsible for all jobs taking place by them.

•    Accounting: Responsible for overseeing hotel budgets, staff payroll, and overall finances. They are detail-oriented employees and work with a high ethical standard. Their overall duties include:

•    Managing budget

•    Process payroll

•    Track expense

•    Financial reports

•    Financial auditing

The economic contribution of the Hospitality Industry

Hospitality is an important economic industry in most countries around the world. According to an article on hospitality.net, “World Travel & Tourism Council (WTTC) predicts that the hospitality industry will grow in value on average by 3.9% a year over the next 10 years to $11.5 trillion and UN’s World Tourism Organisation (UNWTO), international tourist arrivals are projected to increase by more than 3% a year to reach 1.8 billion by 2030”.

As stated in the book ”Travel & Tourism – Economic Impact 2018 World” by Rochelle Turner, it states that the Travel and Tourism industry supports one in every ten jobs on the planet. It has shown to account for 10.4% of global GDP and provides 313 million jobs around the world (9.9% total employment), which is 1 in 5 of global net jobs created in the last 10 years. The Hospitality industry is an engine for employment as it not only creates jobs for many but also drives exports for other sectors thus, creating an effect were more jobs are created.

In 2018 the hospitality industry accounted for 4.0% of global GDP compared to 3.2% in 2017 and is expected to rise by 3.8% year on year from 2018 to 2028. Total employment accounted for 4.2% for the hospitality industry in 2018 against 3.8% in 2017.

How does all this translate to the local and national level? The hospitality sector is one of the key drivers of the UK economy, and UK tourism, both in terms of employment as well as of direct contribution to the economy. Together with tourism, the hospitality industry in the UK is the 3rd largest employer in the UK and has grown GVA faster than any other industry. It has contributed to 3.2m jobs through direct employment in 2017, and a further 2.8m indirectly, this means 10 jobs that the UK hospitality industry creates directly, a further 4.5 are created elsewhere. As the hospitality industry grows, it creates more direct employment and GVA but also spends more along its supply chain. This generates a positive indirect economic impact, and the enlarged workforce will spend more on other items, generating a further positive induced impact.

References

• Elen Rozario. 2013. Blog 2 – Functions And Divisions In A Hotel And How They Relate To The Room Divisions.. [ONLINE] Available at: https://elenrozario.wordpress.com/blog-2-functions-and-divisions-in-a-hotel-and-how-they-relate-to-the-room-divisions/. [Accessed 9 January 2019].
• Ismail, A., (2002). Front office operations and management. United States of America: Thomson Delmar
• Net, H. (2018). The Future Business Model of Hospitality Brands | By David Samson – Hospitality Net. [online] Hospitality.net. Available at: https://www.hospitalitynet.org/opinion/4087556.html [Accessed 9 Nov. 2018]
• Uk Hospitality (2018) Economic Contribution of the UK Hospitality Industry, LONDON: Ignite Economics.

Bibliography

• British Hospitality Organisation (2011) Hospitality: driving local economies A Report by the British Hospitality Association, LONDON: British Hospitality Association.
• Hancock (2018). UK hospitality sector could be worth £100 billion by the end of 2018, despite closures and staff shortages. [online] Thedrinksbusiness.com. Available at: https://www.thedrinksbusiness.com/2018/06/uk-hospitality-sector-could-be-worth-100-billion-by-the-end-of-2018-despite-closures-and-staff-shortages/ [Accessed 6 Dec. 2018]
• Nicola Feuilherade. 2016. The role of the Maintenance Department in Hotels. [ONLINE] Available at: https://www.hotelschool.co.za/role-maintenance-department-hotels/. [Accessed 15 January 2019].
• Office for National Statistics. 2018. Tourism industry. [ONLINE] Available at: https://www.ons.gov.uk/businessindustryandtrade/tourismindustry. [Accessed 14 January 2019].
• Oxford Economics. 2017. Travel and Tourism. [ONLINE] Available at: https://www.oxfordeconomics.com/about-us/sectors-we-serve/travel. [Accessed 10 January 2019].
• Soeg Jobs. (2016). What are the 5 Different Sectors of Hospitality Industry?. [ONLINE] Available at: https://www.soegjobs.com/2016/09/07/different-sectors-hospitality-industry/. [Accessed 26 December 2018].
• Statista. 2019. Travel, Tourism & Hospitality | Statista. [ONLINE] Available at: https://www.statista.com/markets/420/travel-tourism-hospitality/. [Accessed 15 January 2019].
• Uk hospitality. 2019. Uk Hospitality reports. [ONLINE] Available at: https://www.ukhospitality.org.uk/page/Reports. [Accessed 14 January 2019].
• Uk Hospitality (2018) Economic Contribution of the UK Hospitality Industry, 10 BLOOMSBURY WAY, LONDON, WC1A 2SL: Ignite Economics.
• www.jobhero.com. 2019. Hotel Accountant Job Description. [ONLINE] Available at: https://www.jobhero.com/hotel-accountant-job-description/. [Accessed 9 January 2019].